*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 1 of 567 **EO12866_Cooling Water Intakes_2040_ AE95_** **Final_Preamble +Rule** 

**_ 20140**  **5 19**  **ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts**  **122 and 125**  [EPA - HQ - OW - 2008 - 0667, FRL

– 9817 - 3 ] **RIN 2040 –** **AE95** National Pollutant Discharge Elimination Sy stem

—Final Regulations to Establish Requirements for Cooling Water Intake Structures at Existing Facilities and Amend Requirements at Phase I Facilitie s **AGENCY:** Environmental Protection Agency (EPA ). **ACTION:** Final rule. **SUMMARY:** The purpose of this action is to reduce impingement and entrainment of fish and other aquatic organisms at cooling water intake structures used by certain existing power generation and manufacturing facilities for the withdrawal of cooling water from waters of the United States . This rule establishes requirements under section 316(b) of the Clean Water Act (CWA) for existing power generating facilities and existing manufacturing and industrial facili ties that are designed to withdraw more than 2 million gallons per day

( mgd) of water from waters of the United S tates and use at least 25 percent of the water they withdraw exclusively

for cooling purposes. These national requirements , which will be implemented through National Pollutant Discharge Elimination System (NPDES) permits, apply to the location, design, construction, and capacity of cooling water intake structures (CWI S) at regulated facilities and provide*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 2 of 567 requirements that reflect the best technology available (BTA) for minimizing adverse environmental impact. On April 20, 2011, EPA published a proposed rule that included several options for addressing these impacts . Subsequently , EPA published two Notices of Data Availability

(NODA) , on June 11, 2012 and June 12, 2012, that further clarified EPA’s proposed approach. Th is final rule also responds to judicial remand of aspects of the previously

promulgated Phase II and Phase I II section 316(b) rule s . In addition, EPA is also responding to an earlier judicial decision by remov ing from the previously promulgated Phase I new facility rule a restoration - based compliance alternative and the associated monitoring and demonstration requirements. **DATES:** This regulation is effective [ **INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER**  ]. For judicial review purposes, this final r ule is promulgated as of 1 p.m. EDT (Eastern Daylight Time) on [ **INSERT DATE 14 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER** ] as provided in 40 CFR 23.2. **ADDRESSES:** EPA has established a docket for this action under Docket ID No. EPA HQ - OW - 2008 - 06 67. All documents in the docket are listed on the www.regulations.gov w eb site. Although listed in the index, some information is not publicly available, e.g., CBI (confidential business information) or other i nformation whose disclosure is restricted b y statute. Certain other material, such as copyrighted material, is not placed on the i nternet and will be publicly available only

in hardcopy

form. Publicly

available docket materials are available either electronically through www.regulations.gov or in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 3 of 567 hardcop y at the Water Docket in the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenu e, NW., Washington, DC . The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday , excluding legal holiday s. The telephone number for the Public Reading Room is 202

– 566

– 1744, and the telephone number for the Water Docket is 202

– 566

–2426. **FOR FURTHER INFORMATION CONTACT:** For additional biological information, contact Tom Born at 202 - 566 - 1001 ; e - mail: born.tom@epa.gov . For additional economic information, contact Wendy Hoffman at 202

– 56 4

– 8794 ; e - mail: hoffman.wendy@ epa.gov . For additional technical information, contact Paul Shriner at 20 2

– 566

– 1076 ; e - mail: shriner.paul @epa.gov . **SUPPLEMENTARY INFORMATION: What**  **Facilities Are Regulated By This Action?**  This final rule appl ies to existing facilities that use cooling water intake structures to withdraw water from waters of the United States and have or require an NPDES (National Pollutant Discharge Elimination Sy stem) permit issued under s ection 402 of the CWA ( Clean Water Act). Existing facilities subject to this regulation include those with a design intake flow (D IF ) greater than 2 mg d . If a facility meets these conditions, it is subject to today ’s final regulations. If a facility has or require s an NPDES permit but does not meet the 2 mgd intake flow threshold, it is subject to permit conditions implementing CWA section 316(b) , developed by the NPDES P ermit Director on a case - by- case basis using BPJ (best professional judgment) under 40 CFR 125.90(b) . This final rule defines the term cooling water intake structure to mean the total phy sical structure and any*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 4 of 567 associated constructed waterway s used to withdraw cooling water from waters of the United States . The cooling water intake structure extends from the point at which water is first withdrawn from water s of the United States source up to, and including, the intake pumps . Generall y, facilities that meet these criteria fall into two major groups: steam electric generating facilities and manufacturing facilities. The final rule also make s limited changes to the requirements for Phase I facilities (i.e., new facili ties). Exhibit 1 lists industry

sectors of facilities subject to this final rule . This table is not intended to be exhaustive ; facilities in other industries not listed in Exhibit 1 could also be regulated. The 4 - digit NAICS industry sectors may

include 6 - digit NAI CS industry sub - sectors with operations that are not dependent on cooling water.

**E xhibit**  **1. Industry Sectors with Facilities Subject to the Final Rule Category**  **4 -**  **Digit NAICS Industry**  **Sectors NAICS Definition**  Federal, State and Local Government Electric Power Industry 2211 Electric Power Generation, Transmission and

Distribution Industry Electric Power Industry 2211 Electric Power

Generation, Transmission and Distribution Industry Primary Manufacturing Industries 3112 Grain and Oilseed

Milling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 5 of 567 3113 Sugar and

Confectionery Product Manufacturing 3121 Beverage Manufacturing 3221 Pulp, Paper, and

Paperboard Mills 3222 Converted Paper

Product Manufacturing 3241 Petroleum and Coal

Products Manufacturing 3251 Basic Chemical Manufacturing

3252 Resin, Synthetic

Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing

3253 Pesticide, Fertilizer,

and Other Agricultural Chemical Manufacturing 3254 Pharmaceutical and

Medicine Manufacturing 3256 Soap, Cleaning

Compound, and Toilet Preparation Manufacturing 3259 Other Chemical

Product and Preparation Manufacturing 3311 Iron and Steel Mills

and Ferroalloy Manufacturing*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 6 of 567 3312 Steel Product Manufacturing from Purchased

Steel 3313 Alumina and

Aluminum Production and Processing Industry Other Industries 1119 Other Crop Farming 2122 Metal Ore Mining

3133 Textile and Fabric

Finishing and Fabric Coating Mills 3211 Sawmills and Wood

Preservation 3314 Nonferrous Metal

(except Aluminum) Production and Processing 3322 Cutlery and

Handtool Manufacturing 3329 Other Fabricated Metal Product Manufacturing 3364 Aerospace Product and Parts Manufacturing 3391 Medical Equipment and Supplies Manufacturing To determine whether a facility could be regulated by this action, o ne should carefully examine the applicability criteria in § 1 25.91 of the final rule . For information regarding the applicability of this action to a n entity , consult the person s listed for technical information in FOR FURTHER INFORMATION CONTACT.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 7 of 567 **Supporting Documentation 1.**  **Docket** EPA has established an off icial public docket for this action under Docket ID EPA - HQ - OW - 2008 - 0667 . The official public docket consists of the documents specificall y referenced in this action, any public comments received, and other information related to this action . Although a part of the official docket, the public docket does not include information claimed as Confidential Business Information ( CBI ) or other information , the disclosure of which , is restricted by statute . For information on how to access materials in the docket, s ee ADDRESSES above. To view docket materials, call ahead to schedule an appointment . Every user is entitled to copy

266 pages per day before incurring a charge . The Docket Center may charge $0. 15 for each page over the 266 - page limit , plus an administrativ e fee of $25.00. **2. Electronic Access**  You may access this Federal Register document and the docket electronically through the W eb site http://www.regulations.gov by searching for Docket ID EPA - HQ OW - 2008 - 0667 . For additional information about the public docket, visit the EPA Docket Center home page at http://www.epa.gov/epahome/dockets.htm . **3. Technical Support Documents**  The final regulation is supported by three major documents:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 8 of 567  Economic Anal ys is for the Final Section 316(b) Existing Facilities Rule (EPA 821 - R - 1 4 - 00 1 ), referred to as the EA throughout . This document presents the anal ys is of compliance costs, economic impacts , energy suppl y effects, and a summary of benefits associated with the final rule.

 Benefits Anal ys is for the Final Section 316(b) Existing Facilities Rule (EPA - 821 - R - 1 4 - 00 5 ), referred to as the BA throughout . This document examines cooling water intake structure imp acts and regulatory benefits at the regional and national level s .  Technical Development Document for the Final Section 316(b) Existing Facilities Rule (EPA - 821 - R - 1 4 - 00 2 ), referred to as the TDD throughout. This d ocument presents detailed information on the methods used to develop unit costs and describes the set of technologies that may be used to meet the final rule requirements. **Table of Contents** I. Executive Summary and Scope of Today ’s Rulemaking A. Executive Summary B. Scope of Today ’s Rulemaking C . General Applicability D . What is an “Existing Facility” for Purposes of the Final Rule ? E . What is “Cooling Water” and What is a “Cooling Water Intake Structure ?” F . Would My

Facility Be Covered Onl y If It Is a Point Source Discharger? G . Would My

Facility Be Covered If It Withdraws Water from Waters of the United States? What I f M y Facility Obtains Cooling Water from an Independent Supplier?*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 9 of 567 H . What Intake Flow Thresholds Result in an Existing Facility Being Sub ject to the Final Rule? I . What are the Requirements for Existing Offshore Oil and Gas Facilities, Offshore Seafood Processing Facilities or L NG Terminals BTA Requirements under the Final Rule ? J . What is a “New Unit” and How Are New Units Addressed Und er the Final Rule? K . Amendments Related to the Phase I Rule II. Legal Authority for and Background of the Final Regulation A. Legal Authority B. Purpose of the Regulation C. Background I II . Environmental Effects Associated with Cooling Water Intake Structures A. Introduction B. Major Anthropogenic Stressors in Aquatic Ecos ys tems C. Effects of CWIS on Aquatic Ecos ys tems D. Community

–level or Indirect Effects of CWI S E. Cumulative Effects of Multiple Facilities IV. Summary Description of the Final Rule A. BTA Standard for Impingement Mortality for Existing Units at Existing Facilities B. BTA Standard for Entrainment for Existing Units at Existing Facilities C. BTA Standard for Impingement Mortality and Entrainment for New Units at Existing Facilities D . Other Provisions V. Summary

of Data Updates and Revisions to the Proposed Rule A. Data Updates B. Regulatory

Approach and Compliance C. New Units VI . Basis for the Final Regulation A. EPA’s Approach to BTA B. Overview of Final Rule Requirements C . Technologies Considered to Minimize Impingement and Entrainment D . Technology

Basis for Today ’s Final Rule E. Option Selection F. Other Op tions Considered for Today ’s Final Regulation G. Final Rule BTA Performance Standards H . Economic and Benefit Analy sis for the Final Rule I . Site - Specific Consideration of Entrainment Controls*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 10 of 567 V I I. Response to Major Comments on the Proposed Rule and Noti ces of Data Availability

(NODA s ) A. Scope and Applicability B. Proposed Amendments Related to Phase I Rule C. Environmental Impact Associated with Cooling Water Intake Structures D. EPA’s Approach to BTA E. BTA Performance Standards F. Implementation G. Costs H. Monitoring and Reporting I . Endangered Species Act VIII . Implementation A. When Does the Final Rule Become Effective and How are the Requirements Sequenced in an Orderly

Way? B. How Does the Final Rule Reduce Biological Moni toring Requirements? C . What Information Will IBe Required to Submit to the Director When I Apply for My NPDES Permit? D . When Are Permit Application Studies Due? E . How Will the Director Determine the Best Technology Available for Minimizing Adverse Envi ronmental Impacts ? F. What are Example Permit Conditions and Compliance Monitoring for Impingement Mortality? G . What Monitoring is Required for Entrainment ? H . What Reports Am I Required To Submit? I . What Records Will I Be Required to Keep? J . What Are the Respective Federal, State, and Tribal Roles? K . Protection of Endangered and Threatened Species and Designated Critical Habitat L . Permits for Existing Facilities are Subject to Requirements under Other Federal Statutes IX. Cost Development and Economic Impact Analy sis A. Overview of Costs to Regulated Facilities and Federal and State Governments B. Development of Compliance Costs C. Social Cost s D. Economic Impact s E. Employ

ment Effects X. Benefits Anal ys is A. Introduction B. Regional Study

Design C. Phy sical Impacts of Impingement Mortality and Entrainment D. National Benefits of the Final Rule and Options Considered*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 11 of 567 XI . Related Acts of Congress, Executive Orders, an d Agency Initiatives A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory

Flexibility

Act (RFA) D. Unfunded Mandates Reform Act (UMRA) E. Exe cutive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions that S ignificantly Affect Energy Suppl y, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and L ow - Income Populations K. Executive Order 131 58: Marine Protected Areas L. Congressional Review Act **I. Executive Summary and**  **Scope of Today’s Rulemaking**  **A. Executive Summary**  1. Summary

of the Major Provisions of the Regulatory Action This rule establishes requirements under section 316(b) of the Clean Water Act (CWA) for existing power generating facilities and existing manufacturing and industrial facilities that withdraw more than 2 million gallons per day (mg d) of water from waters of the United S tates and use at least 25 percent of the water they withdraw exclusively

for cooling purposes. These national requirements, which will be implemented through National Pollutant Discharge Elimination Sy stem (NPDES) permits, appl y to the location, design, construction, and capacity of cooling water intake structures (CWI S) at regulated facilities by

setting requirements that reflect the best technology available*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 12 of 567 (BTA) for minimizing adverse environmental impact. 1 On April 20, 2011, EPA published a proposed rule that included several options for addressing these impacts . EPA published two Notices of Data Availability (NODA) , on June 11, 2012 and June 12, 2012, that further clarified EPA’s approach. Th is final rule constitutes EPA’s response to the remand of the Phase II and Phase III r ule s . In addition, EPA is also responding to the decision in Riverkeeper I to remove from the Phase I new facility rule the restoration based compliance alternative and the associated monitoring and demonstration requirements. 2. Need for the Rule Cooling water is withdrawn for the purpose of dissipating waste heat from industrial processes. Over half of all water withdrawn in the United States each ye ar is for cooling purposes. By

far, the largest industrial use of cooling water is for thermoelectric generation, but cooling water is also used in the manufacture of aluminum, chemicals and allied products, food and kindred products, pulp and paper, refined petroleum products, and steel, as well as in other industries. Although newer designs are more efficient , the long life of the capital equipment in these industries suggests that the adverse environmental impacts could continue for decades. Electric generators , for example, ty picall y convert 30 to 40 percent of the heat content of their fuel to electricity ,

1 As noted here, the term BTA means “best technology available for minimizing adverse environmental im pact.” In the interests of brevity, the acronym will frequently be used in the preamble to reflect the entire definition.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 13 of 567 depending on their fuel source, age of their facility , and capacity utilization (see TDD 5.1). The purpose of cooling water withdrawals is to dissipate that portion of the heat that is a by- product of industrial processes that facilities have not used and therefore view as waste heat. The withdrawal of cooling water b y existing facilities removes and kills hundreds of billions of aquatic organisms from waters of the United States each year, including plankton (small aquatic animals, including fish eggs and larvae), fish, crustaceans, shellfish, sea turtles, marine mammals, and many other forms of aquatic lif e. Most impacts are to earl y life stages of fish and s hellfish. Aquatic organisms drawn into CWI S are either impinged (I) on components of the intake structure or entrained (E) in the cooling water s ys tem itself. In CWA section 316(b) and in this rulemaking, these impact s are referred to as adverse environmental impact (AEI). Rates of I&E depend on species characteristics, the facility’s environmental setting, and the location, design, construction and capacity of the facility’s CWI S. In addition to direct losses of aquatic organisms from I&E, a number of indirect, ecosy stem - level effects may also occur, including (1) disruption of aquatic food webs re sulting from the loss of impinged and entrained organisms that provide food for other species, (2) disruption of nutrient cycling and other biochemical processes, (3) alteration of species composition and overall levels of biodiversity , and (4) degradation of the overall aquatic environment. In addition to the impacts of a single CWIS on currents and other local habitat features, environmental degradation can result from the cumulative impact of multiple intake structures operating in the same watershed or intakes located within an area where intake effects interact with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 14 of 567 other environmental stressors. Finall y, although it is difficult to measure, the compensatory

ability of an aquatic population, which is the capacity for a species to increase survival, growth, or reproduction rates in response to decreased population, is likely compromised b y I&E and the cumulative impact of other stressors in the environment over extended periods of time. The beneficiaries of fish protection at cooling water intakes include fisherman, both recreational and commercial, and people interested in well - functioning and healthy aquatic ecosy stems. While most people consume electricity , they consume electricity in differing amounts, and may not be uniforml y interested in, or willin g to pay for , fish protection. Thus, there is imperfect overlap between those who could be required to pay for fish protection and those who would benefit from fish protection. Those who desire more fish protection have extremely limited opportunities in which they can express their willingness to pay

for fish protection in market transactions that result in fish protection. In addition, deregulation in the electric industry has made it more difficult for merchant power producers to both remain competitive and pass along to consumers costs associated with fish protection, relative to rate - regulated electric utilities that are verticall y integrated. Fish protection at cooling water intakes is also variable, based on species and their migrations, waterbody , size of a cooling water intake, presence of multiple facilities on a waterbody , and many

more variables that are highly site specific . In addition, given the history of litigation around this section of the Clean Water Act, states have, in some*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 15 of 56 7 instances , administratively continued permits while awaiting final F ederal action, and thus fish protection has been delayed, in some instances for decades. Promulgation of today ’s final rule will complete EPA ’s regulations under s ection 316(b) of the Clean Water Act. This rule includes a national performance standard as the BTA to address impingement mortality (IM) at existing CWI S. This national standard for impingement reflects EPA’s assessment that impingement reduction technology is available, feasible and dem onstrated, and thus BTA for existing facilities. The impingement mortality standard is based on modified traveling screens with fish returns and includes a performance standard as one compliance alternative , but also offers six other compliance alternatives that are equivalent or better in performance. With regard to entrainment , this rule contains a national BTA standard that is a process for a site - specific determination of entrainment mitigation requirements at existing CWI S. Th e entrainment provision reflects EPA’s assessment that there is no single technology basis that is BTA for entrainment at existing facilities, but instead a number of factors that are best accounted for on a site - specific basis. Site - specific decision making may lead to a determination by

the NPDES permitting authority that entrainment requirements should be based on variable speed pumps, water reuse, fine mesh screens, a closed - cycle recirculating s ys tem, or some combination of technologies that constitutes BTA for the individual site. The site - specific decision - making may also lead to no additional technologies being required. In addition to the above provisions, which apply to existing units at existing facilities, the rule establishes a BTA standard , for both impingem ent mortality and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 16 of 567 entrainment, for new units at existing facilities. Under th is standard , n ew units at existing facilities will be subject to requirements similar to the section 316(b) requirements for new facilities subject to the previousl y promulgated Phase I rule . In addition, there is a need to regulate even those facilities that adopt the most effective technology . Closed - cycle cooling is a technology that recirculates cooling w ater, reducing withdrawals from surface waters. Closed - cycle cooling can reduce water withdrawals b y at least 95 percent, compared to once - through cooling, but is itself capital intensive. Facilities that retrofit to closed - cycle cooling with out also modifyingtheir condenser may

not be able to operate at full capacity during summer peak periods of electricity demand (replacing the condenser would require longer outages). O perators who retrofit closed - cycle cooling s ys tems have a financial incentive not to run their sy stem in closed - cycle mode during summer months. Thus, decision making at facilities that use cooling water may not take society’s preferences for fish protection into account in their actions. EPA notes that some facilities have installed, and some NPDES permits require, controls that protect aquatic organisms from impingement and entrainment. Facilities may have adopted controls as good stewards. D irectors may have required controls to meet state water quality

standards, particularl y with regard to temperature. Based on our evaluation of available evidence, these actions have not been widespread enough to discourage cooling water withdrawals from waters where they have the greatest impact on aquatic organisms .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 17 of 567 3. Costs and Benefits As presented in Exhibit I - 1, EPA assessed the expected costs to society for complying with the final rule , accounting for both the existing CWI S unit provis ion and the new unit provision , as $ 275 million and $ 297 million per year at the 3 percent and 7 percent discount rate s , respectively . These costs reflect permit applications, studies, recordkeeping, monitoring, and reporting required by the rule. T he costs also include costs of technologies for complying with the BTA for IM . The cost of additional technologies that may

be required to meet the site - specific BTA for entrainment are not included in this analy sis b ecause, as explained in S ection VII , EPA cannot estimate , with any level of certainty, what site - specific determinations will be made based on the anal ys e s that will be generated as a result of the national BTA standard for entrainment decision - making established by today ’s rule. EPA estimat es that today’s final rule

– including standards for both existing units and new units at existing facilities

– will achieve monetized benefits to society of $ 3 3 million and $ 29 million annually , again depending on the discount rate. This estimate of benefits omits important categories of benefits that EPA expects the rule will achieve, such as most of the benefits associated with fish other than commerciall y and recreationall y harvested fish. As a result, these estimates are likel y to understate substantially

the rule’s expected benefits to society . In estimating the benefits of today ’s rule , EPA did not rely

on the results of the stated preference survey conducted by the Agency and desc ribed in the June 12, 2012 N otice of D ata Availability (77 FR 34927*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 18 of 567 (June 1 2 , 2012 ) ) . Included in the monetized benefits is EPA’s estimate that the final rule will reduce greenhouse gas (GHG) emissions by 9.3 million tons of CO 2 - equivalent emissions over the 40 - ye ar compliance period for this analy sis. Based on this reduction in GHG emissions, EPA estimates benefits to society (based on social cost of carbon (DCN 2 12 - 4853 ) ) ranging from $ 12 million to $ 1 3 million annually ( see Section 9 of the BA ) , depending on the discount rate and other assumptions in the social cost of carbon anal ys is . **Exhibit I -**  **1. Total annualized social costs and benefits for the final rule (in millions, 2011 dollars)** Existing Units New Units Total Using 3 percent discount rate Social Costs $272.4 $2.5 $274.9 Social Benefits $33.0 - $0.2 $32.8 Using 7 percent discount rate Social Costs $295.3 $2.0 $297.3 Social Benefits $28.7 - $0.1 $28.6 EPA expects that the final rule will have relatively minor economic impacts on the regulated facilities, the entities that own them, and the overall electric power sector, which is the industry

most affected by

today ’s rule. Under the rule ’s existing unit provision s , EPA estimates that a substantial majority ( 8 6 percent) of e lectric g enerators will incur compliance costs of less than 1 percent of revenue, indicating the minor impact of the rule on these facilities.

2 DCN refers to a document control number. An index of DCNs can be found in the docket for this action.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 19 of 567 EPA also expects very

small impacts on the non - power sector compo nent of regulated facilities. EPA estimates that 504 out of 5 09 facilities will incur costs less than one percent of revenue, five will incur costs between one and three percent, and none will incur costs greater than 3 percent. In addition, EPA estimates that no m anufacturing facilities will close as a result of today ’s rule, and that only 12 facilities in the non - power sector component will experience moderate financial stress short of closure. These 12 facilities represent approxi mately 3 percent of the estimated total regulated facilities in the non - power sector component. At the level of the entities that own regulated facilities, EPA estimates that 91 to 94 percent of entities owning regulated facilities in the electric power sector will incur compliance costs of less than 1 percent of revenue under the rule’s existing unit provisions. L ikewise, for the non - power sector component of regulated facilities, EPA es timates that 9 0 to 95 percent of entities owning regulated facilities will incur compliance costs of less than 1 percent of revenue under the rule’s existing unit provisions. Finally , EPA estimates that today ’s rule will have a minor impact on the ov erall electric power sector and electricity consumers. EPA estimates that the rule will not affect national or regional electricity markets on a long - term basis. In addition, EPA expects there to be no effects of the final rule on the reliability of electricity

generation, transmission and distribution. In terms of consumer impacts, EPA estimates, on average, across the United States, that the final rule will increase electricity production costs by 0. 0 09 cents per kWh, cau sing an estimated 0.1 percent increase in average electricity*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 20 of 567 prices. The corresponding annual increase in electricity costs is approximately $1. 0 3 per household . **B .**  **Scope of Today’s Rulemaking** T oday's final rule represents the last stage in EPA’s efforts to implement section 316(b) of the CWA . In the course of their operations, electric power facilities and certain manufacturing facilities use large amounts of water either for cooling purposes or in their manufacturing proc esses. Such facilities ty pically remove water from nearby sources using “cooling water intake structures.” The structures associated with water removal pose a number of threats to the environment. Principally , aquatic organisms are squashed against intake screens – impingement

– or drawn into the cooling s ys tem

– entrainment. S ection 316(b) requires EPA to develop standards for cooling water intakes structures. Today ’s final rule establishes national requirements applicable to the location, design, construc tion, and capacity of cooling water intake structures at existing facilities that reflect the BTA for minimizing the adverse environmental impact s– impingement and entrainment

– associated with the use of these structures . It represents the culmination of EPA’s efforts to implement section 316(b) and, as such, fulfills EPA's o bligation under a settlement agreement entered in the United States District Court for the Southern District of New York in Riverkeeper Inc., et al. v. Jackson , No. 93 Civ. 0314 (AGS). (For a more detailed discussion of the settlement agreement , see Section II.C . )*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 21 of 567 Th is final rule establishes requirements for all existing facilities with a DIF (design intake flow) of more than 2 mg d . EPA estimates that a total of 1,065 facilities will be subject to the final rule, including 544 Electric Generators, 509 Manufacturers in six Primary

Manufacturing Industries, and 12 Manufacturers in Other Industries. The r ule also clarifies the definition and requirements for new units at existing facilities. The applicable requirements are summarized in Exhibits I - 2 and I - 3 . **Exhibit I -**  **2 . Applicability by phase of the 316(b) rules**  **Facility characteristic Applicable rule**  New power - generating or manufacturing facility Phase I rule New offshore oil and gas facility Phase III rule New unit at an existing power - generating or manufacturing facility This rule Existing power - generating or manufacturing facility This rule E xisting offshore oil and gas facility and offshore seafood processing facilities This rule ( site - specific , BPJ) **Exhibit I -**  **3 . Applicable requirements of today’s rule for existing facilities** 

**Facility characteristic Applicable requirements**  Existing facility with a DIF greater than 2 mgd and an AIF (actual intake flow) greater than 125 mgd Impingement mortality standard s at § 125.94( c ) and site - specific entrainment requirements under the entrainment standards at § 125.94( d ) ( Additional study requirements at § 122.21(r)(1)(ii)(B) ) Existing facility with a DIF greater than 2 mgd but AIF not greater than 125 mgd Impingement mortality standards at § 125.94( c ) and site - specific entrainment requirements under the entrainment standards at § 125.94( d ) New unit at an existing facility where the facility has a DIF greater than 2 mgd Impingement mortality and entrainment standard s for new units at § 125.94( e ) Other existing facility with a DIF of 2 mgd or smaller or that has an intake structure that withdraws less than 25 percent of the water for cooling purposes on an a ctual intake flow basis Case - by - case BPJ permitting per § 125.9 0 ( b)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 22 of 567 At an earl y stage in the development of section 316(b) requirements, EPA divided its rulemaking effort into three phases. The first addressed new facilities, the second , large existing electricity

utility facilities and the third , the remaining electric generating facilities not addressed in the earlie r phases as well as existing manufacturing operations . A s EPA’s anal ys is progressed, however, it became clear that it could address in one rulemaking cooling water intake structures at both existing steam electric generating and manufacturing facilities . F rom a biological perspective, the effect of intake structures on impingement and entrainment 3 does not differ depending on whether an intake structure is associated with a power plant or a manufacturer . In2009, following judicial challenge of the Phase II rule, EPA asked the U.S. Court of Appeals for the Second Circuit to remand the rule to the Agency for further action consistent with a decision by the U.S. Supreme Court in Entergy Corp. v. Riverkeeper, Inc. and the Second Circuit’s decision on the Phase II rule in Riverkeeper, Inc . v. EPA , 475 F.3d 83 (2d cir. 2007) . In2009, EPA also asked the U.S. Court of Appeals for the Fifth Circuit to remand certain aspects of EPA’s Phase III rule that were before it in a petition for review . Today ’s rule responds to these remands as well to the Second Circuit’s remand of limited aspects of the Phase I section 316(b) rule in Riverkeeper Inc. v. Johnson , 358 F.3d 174 (2nd Cir. 2004). EPA has here consolidat ed the universe of potentiall y regulate d facilities from the remanded

3 Throughout the preamble and support documents, the terms “entrainment” and “entrainment mortality” may be used interchangeably. As described below , E PA continues to assume that, in most instances, entrainment mortality is 100 percent, leaving little distinction between the two terms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 23 of 567 2004 Phase II rule with the existing facilities in the remanded 2006 Phase III rule for establishing requirements in a single proceeding . **C .**  **General Applicability** This rule appl ies to owners and operators of existing faciliti es 4 that meet all following criteria:

 The facility

is a point source that uses or , in the case of new unit s at an existing facility , proposes to use cooling water from one or more cooling water intake structures, including a cooling water intake stru cture operated b y an independent supplier not otherwise subject to 316(b) requirements that withdraws water from waters of the United States and provides cooling water to the facility by any sort of contract or other arrangement;

 The facility- wide DIF for all cooling water intake structures at the facility is greater than 2 mg d;

 The cooling water intake structure withdraw s cooling water from waters of the United States ; and

 At least 25 percent of the water actuall y withdrawn

– actual intake flow (AIF)

– is used exclusively

for cooling purposes .

4 Throughout the preamble, the terms “owner or operator of a facility” and “facility” may be used interchangeably. In cases where the preamble may state that a facility is required to do a given activity, it should be interpreted as the owner or operator of the facility is required to do the activity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 24 of 567 A facility may choose to demonstrate compliance with the final rule for the entire facility , or for each individual cooling water intake structure. EPA is adopting provisions that promote the reuse of water from certain sources for cooling and that ensure that the rule does not discourage the reuse of cooling water for other uses such as process water . For example, the final rule at § 1 25.91(c) specifies that obtaining cooling water from a public water sy stem , usi ng reclaimed water from wastewater treatment facilities or desalination plants, or recycling treated process wastewater effluent (such as wastewater treatment plant “gray” water) does not constitute use of a cooling water intake structure for purposes of this rule. In addition, the definition of cooling water at § 1 25.9 2 provides that c ooling water obtained from a public water sy stem, reclaimed water from wastewater treatment facilities or desalination plants, treated effluent from a manufacturing facility , or cooling water that is used in a manufacturing process either before or after it is used for cooling as process water is not considered cooling water for the purposes of calculating the percentage of a facility ’ s intake flow that is used for cooling purposes. Therefore, water used for both cooling and non - cooling purposes does not count toward the 25 percent threshold . Examples of water withdrawn for non - cooling purposes includes water withdrawn for warming by LN G ( liquefied natural gas ) facilities and water withdrawn for public water s ys tem s by desalinization facilities. Today ’s rule focuses on those facilities that are significant users of cooling water . The rule provides that only those facilities that use 25 percent or more of the water withdrawn exclusively for cooling purposes (on an a ctual intake flow basis) are subject to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 25 of 567 the rule . EPA previousl y considered a number of cut - points or approaches for focusing the applicability

of the rule (66 FR 28854 , May 25, 2001 and 66 FR 65288 , December 18, 2001 ). EPA used the 25 percent threshold in each of the Phase I, II, and III rules . For this rule, EPA did not receive any new data supporting a different threshold or identif y new approaches to the applicability of the rule. Consequently , EPA is adopting 25 percent as the threshold for the percent of flow used for cooling purpose s to ensure that a large majority of cooling water withdrawn from waters of the United States are subject to the rule’s re quirements for minimizing adverse environmental impact . B ecause power generating facilities ty

pically use far more than 25 percent of the water they withdraw exclusively

for cooling purposes, the 25 percent threshold will ensure that intake structures acco unting for nearl y all cooling water used by the power sector are addressed by today ’s rule requirements . While manufacturing facilities often withdraw water for more purposes than cooling, the majority of the water is withdrawn from a single intake structure. Once water passes through the intake, water can be apportioned to any desired use, including uses that are not related to cooling . However, as long as at least 25 percent of the water is used exclusively for cooling purposes, the intake is subject to the requirements of today ’s rule. EPA estimates that approximately 70 percent of manufacturers and 87 percent of power - generating facilities that meet the first three criteria for applicability outlined above also use 25 percent or more of intake water for cooling and thus are subject to today ’s rule . (See 66 FR 65288, December 18, 2001.) For facilities that are below any of the applicability thresholds in today’s rule

– for example , a facility

that withdraw s less than 25 percent of the intake flow for cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 26 of 567 purposes – the Director must s et appropriate requirements on a case - by- case basis, using BPJ , based on § 125.90(b) . Today ’s rule is not intended to constrain permit writers at the Federal, State, or Tribal level, from addressing such cooling water intake structures . Also, EPA decided to adopt for the final rule the proposed provision that requires the owners and operators for certain categories of facilities (existing offshore oil and gas facilities, existing offshore seafood processing facilities and offshore LNG terminals) to meet case by- case BTA impingement and entrainment requirements , establish ed b y the Director . Such facilities are subject to permit conditions imp lementing CWA section 316(b) if the facility is a point source that uses a cooling water intake structure and has, or is required to have, an NPDES permit. **D .**  **What is an “Existing Facility” for Purposes of the Final Rule?** In today ’s rule, EPA is defining the term “existing facility” to include any facility subject to section 316(b) that is not a “new facility” as defined in 40 CFR 125.83 (the Phase I rule) . A point source discharger would be subject to Phase I or today ’s rule even if the cooling water intake structure it uses is not located at the facility. 5 Inaddition, modifications or additions to the cooling water intake structure (or even the total replacement of an existing cooling water intake structure with a new o ne) does not convert an otherwise unchanged existing facility into a new facility , regardless of the

5 For example, a facility might purchase its cooling water from a nearby facility that owns and operates a cooling water intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 27 of 567 purpose of such changes (e.g., to comply with today ’s rule or to increase capacity) . Rather, the determination as to whether a facility is new (Phase I) or existing (today ’s rule) focuses on whether or not it is a greenfield or stand - alone facility whose processes are substantiall y independent of an existing facility , and whether or not there are changes to the cooling water intake . New facility does not i nclude new units that are added to a facility for purposes of the same general industrial operation. F or example, a new peaking unit at an existing electrical generating station is not a new facility (40 CFR 125.83). The distinction between an existing facility and a new facility

is separate from the distinction between an existing unit at an existing facility and a new unit at an existing facility , which is discussed at greater length in S ection J below. **E .**  **What is “Cooling Water” and What is a “Cooling Water Intake Structure?”**  EPA has slightly revised the definition of cooling water intake structure from proposal for today ’s rule . Intoday ’s final rule, a cooling water intake structure is defined as the total phy sical structure and any associated constructed waterway s used to withdraw cooling water from waters of the United States . Under the definition in today ’s rule, the cooling water intake structure extends from the point at which water is first withdrawn from Waters of the United States up to , and including , the intake pumps. The final rule at § 1 25.91(c) also specifies that obtaining cooling water from a public water sy stem , using reclaimed water from wastewater treatment facilities (such as wastewater treatment plant “gray” water) or desalination plants, or recycling treated process wastewater effluent does not constitute use of a cooling water intake structure for purposes of applicability of this rule . As a point of clarifi cation, facilities subject to to day ’s rule may choose to use*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 28 of 567 another entity’s treated wastewater as a source of cooling water, thereb y reducing cooling water withdrawals and associated impingement and entrainment. EPA notes that becau se the entity providing the wastewater for cooling has already treated it to meet any applicable discharge requirements (e.g., otherwise applicable effluent limitations guidelines and standards, water quality standards, etc.), EPA is not concerned that thi s provision will lead to pollutant discharges that would not have occurred if the treated effluent had been discharged b y the other entity . Today ’s rule adopts the new facility rule’s definition of cooling water as water used for contact or noncontact cool ing, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content . The definition specifies that the intended use of cooling water is to absorb waste heat [ not being efficientl y used or recaptured for production and thus ] rejected from the process or processes used or from auxiliary operations on the facility’s premises . The definition also indicates that c ooling water obtained from a public water s ys tem, reclaimed water from wastewater treatment facili ties or desalination plants, treated effluent from a manufacturing facility , or cooling water that is used in a manufacturing process either before or after it is used for cooling as process water would not be considered cooling water for the purposes of determining whether 25 percent or more of the a ctual i ntake f low is cooling water . This clarification is necessary because cooling water intake structures typicall y bring water into a facility for numerous purposes, including industrial process es; use as circulating water, service water, or evaporative cooling tower makeup water; dilution of effluent heat content; equipment cooling; and air conditioning. Note,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 29 of 567 however, that all intake water (including cooling and non - cooling process) is included in the determination as to whether the 2 mg d DIF threshold for covered intake structures is met. **F .**  **Would My Facility Be Covered Only If It Is a Point Source Discharger?** Today ’s rule appl ies only to facilities that have an NPDES permit or are required to obtain one . This is the same requirement EPA included in the Phase I new facility rule at § 1 25.81(a)(1) . Requirements for compl yi ng with CWA section 316(b) will continue to be applied through NPDES permits. On the basis of the Agency ’s review of potential existing facilities that employ cooling water intake structures, the Agency anticipates that most facilities will control the intake structure that supplies them with cooling water, and discharge some combination of their cooling water, wastewater, or sto rmwater to a water of the United States through a point source regulated by an NPDES permit . In such cases, the facility ’s NPDES permit must include the requirements for the cooling water intake structure . I f an existing facility ’s onl y NPDES permit is a g eneral permit for stormwater discharges, the Agency anticipates that the Director will write an individual NPDES permit containing requirements for the facility ’s cooling water intake structure . Alternativel y, requirements applicable to cooling water intake structures could be incorporated into general permits . If requirements are placed into a general permit, they must meet the requirements set out at 40 CFR 122.28. As EPA stated in the preamble to the final Phase I rule (66 FR 65256 , December 18, 2001), the Agency

encourages the Director to closely examine scenarios in which a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 30 of 567 facility withdraws significant amounts of cooling water from waters of the United States but is not required to obtain an NPDES permit . As appropriate, the Director must apply other legal requirements, where applicable, such as CWA section s 40 1 or 40 4 , the Coastal Zone Management Act, the National Environmental Policy Act, the Endangered Species Act, or similar State or Tribal authorities to address adverse environmental impact caused by

cooling water intake structures at those facilities. **G .**  **Would My Facility Be Covered If It Withdraws Water from Waters of the United States?**  **What If My Facility Obtains Cooling Water from an Independent Supplier?**  The requirements in today ’s rule appl y to cooling water intake structures that have the design capacity

to withdraw amounts of water greater than 2 mgd from waters of the United States . Waters of the United States include the broad range of surface waters that meet the regulatory

definition at 40 CFR 122.2 and 40 CFR 230.3 , which includes lakes, ponds, reservoirs, nontidal rivers or streams, tidal rivers, estuaries, fjords, oceans, bay s, and coves. These potential sources of cooling water can be adversel y a ffected by impingement and entrainment. Some facilities use an impoundment such as a man - made pond or reservoir as part of a cooling s ys tem . C ooling water is withdrawn from the pond or reservoir at one point and heated water is discharged to a different point, using mixing and evaporative processes. As explained above, section 316(b) and today ’s final rule apply only to withdrawals of co oling water from waters of the United States; accordingl y, to the extent a facility withdraws cooling water from a pond or reservoir that is not itself a water of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 31 of 567 United States and does not withdraw any make - up water from waters of the U.S. , the requirements of today ’s rule do not apply to such sy stems . Impoundments that are not constructed from a waters of the U.S. but do withdraw make - up water from waters of the U.S. can be closed - cycle recirculating s ys tems subject to the requirements of today ’s rule , provided that withdrawal for make - up water is minimized. Facilities that withdraw cooling water from impoundments that are in whole or in part waters of the United States and that meet the other criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are subject to today ’s rule. Intoday ’s rule , the agency is defining the term c los ed - cycle recirculating s ys tem to include , at § 125.92(c)(2), a sy stem with impoundments of waters of the U.S. where the impoundment was lawfull y created 6 for the purpose of serving as part of the cooling water sy stem. In determining whether an impoundment qualifies as a closed - cycle recirculating s ys tem, the Director will determine whether the make - up water withdrawals for such a s ystem have been minimized. Inmany cases, EPA expects that such make - up water withdrawals are commensurate with the flows of a closed - cycle cooling tower . Some of these impoundments may qualify for the waste treatment

6 The owner or operator of the facility would provide documentation such as the project purpose statement for the Clean Water Act section 404 permit obtained to construct the impoundment. If the impoundment wa s created prior to the CWA requirement to obtain a section 404 permit, the owner or operator would provide any other license or permit obtained to lawfully construc t the impoundment for the purposes of a cooling water system .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 32 of 567 exclusion found in the definition of a waste treatment sy ste m at 40 CFR 122.2 , and this rule does not affect the applicability of that exclusion . EPA does not intend for this rule to change the regulatory status of impoundments . Impoundments are addressed in the definition of waters of the United States at 40 CFR 122.2 and 40 CFR 230. 3 . The determination whether an impoundment is a water of the United States is to be made b y the Director on a site - specific basis. The EPA and the U.S. Arm y Corps of Engineers have jointly issued jurisdictional guidance concerning the term waters of the United States in light of the Supreme Court’s decision in Solid W

aste Agency of Northern Cook County v. U.S. Army Corps of Engineers , 531 U.S. 159 (2001) (SWANCC). A c opy of that guidance was published as an Appendix to an Advanced Notice of Proposed Rulemaking on the definition of the phrase waters of the United States , see 68 FR 1991, January 15, 2003, which is at http://www.epa.gov/owow/wetlands/pdf/ANPRM - FR.pdf . The agencies additionally published guidance in 2008 regarding the term waters of the United States in light of both the SW ANCC and subsequent Rapanos case ( Rapanos v. United States , 547 U.S. 7 15 (2006)). The EPA published a proposed revision to the definition of “Waters of the United States” under the Clean Water Act on April 21, 2014 (see 79 FR 22188). EPA recognizes that some impoundments may be man - made waterbodies that support artificiall y managed and stocked fish populations. As a result, EPA has included a provision in today ’s final rule to allow the Director to waive certain permit application requirements for such facilities. Note, h owever, that these facilities are still subject to the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 33 of 567 EPA acknowledges that the point of compliance for facilities located on impoundments may

also vary depending on where the facility withdraws from a water of the United States. Again, only cooling water s ys tems with withdrawals of cooling water from waters of the United States are covered b y s ection 316(b) and today ’s rule. Because a facility may withdraw cooling water from a water of the United States either directly or as mak eup water for a closed - cycle cooling sy stem , the Director may determine where within a facility ’s cooling water intake structure is or are the facility ’s point or points of compliance. The Agency

recognizes that some facilities that have or are required to have an NPDES permit might not own and operate the intake structure that supplies their facility with cooling water. In addressing facili ties that have or are required to have an NPDES permit that do not directly control the intake structure that supplies their facility with cooling water, § 1 25.91 provides (similar to the new facility rule) that facilities that obtain cooling water from a public water s ys tem, use reclaimed water from a wastewater treatment facility

or desalinization plant, or use treated effluent are not deemed to be using a cooling water intake structure for purposes of this rule. However, obtaining water from another enti ty

that is withdrawing water from a water of the United States will be counted as using a cooling water intake structure for purposes of determining whether an entity meets the threshold requirements of the rule. For example, facilities operated b y separat e entities might be located on the same, ad jacent, or nearb y property. O ne of these facilities might take in cooling water and then transfer it to other facilities that discharge to a water of the United States. Section 125.91(b) specifies that use of a co oling water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 34 of 567 intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier or suppliers withdraw water from waters of the United States but that is not itself a new or existing facility subject to CWA section 316(b), except if it is a public water s ys tem, a wastewater treatment facility

or desalination plant providing reclaimed water, or a facility providing treated effluent for reuse as cooling water pursuant to § 125.91(c) . As a practical matter, the existing facilities subject to this rule are the largest users of cooling water and therefore ty pically withdraw volumes of water for cooling that warrant owning the cooling water intake stru ctures. In some cases, such as at nuclear power plants or critical baseload facilities, the need for cooling water includes safety and reliability reasons that would likely preclude any i ndependent supplier arrangements. Therefore, EPA expect s this provisi on will have only limited applicability . EPA is nevertheless retaining the provision to prevent facilities from circumventing the requirements of today ’s rule by creating arrangements to receive cooling water from an entity that is not itself subject to to day ’s rule and that is not otherwise expli citly exempt from today ’s rule ( such as drinking water or treatment plant discharges reused as cooling water) . **H .**  **What Intake Flow Thresholds Result in an Existing Facility Being Subject to the Final Rule?**  EPA determines the cooling water flow at a facility in two way s . The first is based on the DIF, which reflects the maximum intake flow the facility is capable of withdrawing . While this normally is limited by

the capacity of the cooling water intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 35 of 567 pumps, other parts of the cooling water intake s ys tem could impose phy sical limitations on the maximum intake flow the facility is capable of withdrawing . The second method for determining cooling water flow is based on the AIF, which reflects the actual volume of water withdrawn b y the facility . EPA has defined AIF to be the average water withdrawn each ye ar over the preceding three years. 7 Both of these methods are used in today ’s rule. Today ’s final rule appl ies to facilities that have a total DIF of greater than 2 mgd (see § 1 25.91). 8 At a threshold of 2 mgd , today ’s rule covers 99. 8 percent of the total water withdrawals by

utilities and other industrial sources (if the other criteria for coverage are met), which includ es 70 percent of manufacturing facilities and 87 percent of electric generators . EPA also chose the greater than 2 mgd threshold because it was consistent with the applicability criteria in the Phase I rule. 10 There are substantial environmental benefits that will accrue with a threshold of 2 mgd. For example, EPA's analy sis indicates that greater than 82 percent of impinged fish mortality across all facilities would be prevented by this rule at this threshold. EPA also considered a threshold of 50 mgd. The record includes 38 studies documenting IM at more than 40 facilities with flows lower than 50 mgd. Further, the industry questionnaire

7 For permit terms subsequent to the first permit issued under today’s rule, the rule defines AIF as the average flows over the previous 5 years . 8 The 2004 Phase II r

ule would have applied to existing power - generating facilities with a design intake flow of 50 mgd or greater. Facilities potentially regulated by the Phase III rule had a DIF of greater than 2 mgd. 10 For more information, see 65 FR 49067 , August 10, 2000.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 36 of 567 demonstrates that such facilities are twice as likely to have no controls in place for impingement or entrainment than are facilities with intake flows greater than 50 mgd. In addition, lower intake flow facilities can have similar impacts to those of la rger flow facilities as sizable numbers of fish are impinged by lower flow facilities. Moreover, site specific impacts of lower flow facilities may be significant, particularly where threatened or endangered species are present. Although smaller flow facil ities (those less than 50 mgd) constitute a large proportion of the total number of the facilities regulated (476 of 1,065), the total compliance cost for these smaller facilities are only a small portion of the total compliance cost of the rule ($23 milli on of $275 million). Thus any perceived aggregate cost savings from setting the threshold higher than 2 mgd would be minimal. There is no appreciable difference in the cost effectiveness of the rule with a higher applicability

threshold. For example, the cost effectiveness of the rule with a threshold of 2 mgd is $0. 42 per age - one equivalent losses (A1E) . At a threshold of 50 mgd the cost effectiveness would be $0. 41 per A1E . Inaddition, the incremental c ost of the 2 mgd threshold relative to a 50 mgd thr eshold is negligible for the electric power industry at less than 0.1 percent of annual electricity sector revenue, which exceeds $126 billion. The facility- level impacts are negligible to zero at either 2 or 50 mgd threshold. At the 2 mgd threshold, only 5 (1 percent) of the manufacturing facilities have a cost - to revenue rati o exceeding 1 percent (but less than 3 percent). While this drops to zero facilities at the 50 mgd threshold, the difference of 5 facilities out of 509 faci lities is not significant . Costs for lower flow facilities are so small that the average annual household*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 37 of 567 utility bill would not measurably decrease by

changing the threshold from 2 to 50 mgd. While 58 percent of the small facilities affected b y the final rule are below 50 mgd, 40 percent of them already meet one of the compliance alternatives for impingement mortality of the rule and likely would not need to install any additional compliance technologies. And small businesses account for only 1 7 percent of facilities at or below 50 mgd, demonstrating that there would not be a disproportionate impact on small businesses at a 2 mgd threshold. Thus, EPA concluded that th e threshold of 2 mgd ensures that the users of cooling water causing the most adverse envi ronmental impact are subject to the rule. Raising the threshold for applicability of the rule’s impingement and entrainment requirements to 50 mgd as some commenters suggested was not supportable given the statistics and information described above. Raisi ng the applicability

threshold to 50 mgd would have meant that 476 facilities, almost half of the 1,065 facilities subject to the national standards set by today ’s rule, would not be subject to the rule. Ignoring so many facilities when setting national st andards fails to apply the common sense approaches set forth in this rule for minimizing adverse environmental impacts from cooling water intake structures. Excluding such a large number of facilities from this rule would create regulatory uncertainty for those facilities since they would remain subject to CWA permitting requirements, but without the benefits of the structure of this rule. Directors would have an obligation to establish controls on a case - by- case basis for these lower flow facilities using a BPJ analy sis instead of using the more straightforward and transparent provisions*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 38 of 567 of setting controls based on national standards contained in this rule . Such BPJ analy ses can be uncertain, and can be time consuming and complex to develop for both Directors and owners and operators of facilities. Case - by- case BPJ permits ( instead of permits based on the national standards in today ’s rule ) would likely increase the time and costs to states for such permits to be developed, further delaying the minimization of adverse environmental impacts called for b y CWA section 316(b). Maintaining an applicability threshold of 2 mgd DIF best combines the shared goals of minimizing adverse environmental impacts as required b y the CWA, and the predictability and flexibility contained in the rule . EPA acknowledges that there may be circumstances where flexibility in the application of the rule may be called for and the rule so provides. For example, some low flow facilities that withdraw a small proportion of the mean annual flow of a river may warrant special consideration by the Director . As an illustration , if a facility withdraws less than 50 mgd AIF, wi thdraws less than 5 percent of mean annual flow of the river on which it is located (if on a river or stream) , and is not co - located with other facilities with CWI Ss such that it contributes to a larger share of mean annual flow , the Director may determine that the facility is a candidate for consideration under the de minimis provisions contained at § 125.9 4 (c)(11). In the case of facilities on lakes and reservoirs, co - location would be better determined by multiple CWI S facilities on the same waterbody, rather than distance.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 39 of 567 In either case, the flexibilities contained in the rule for the Director to consider the site - specific characteristics of each intake structure within the national standard provide a useful mechanism for facilities with lower intake flows and low impacts to be considered. EPA is continuing to base applicability on DIF as opposed to AIF for several reasons . In contrast to AIF , DIF is a fixed value based on the design of the facility ’s operating s ys tem and the capacity of the circulati ng and other water intake pumps . This provides clarity because the DIF does not vary with facility

operations , except in limited circumstances, such as when a facility undergoes major modifications . On the other hand, actual flows can vary

significantly

ov er sometimes short periods . For example, a peaking power plant might have an AIF close to the DIF during times of full energy production, but an AIF of zero during lengthy periods of standby . Use of DIF provides clarity as to regulatory

status, is indicative of the po tential magnitude of environmental impact, and avoid s the need for monitoring to confirm a facility’s status . F or more information about these thresholds , see 69 FR 41611 , July 9, 2004. Under this rule, all facilities with a DIF of greater than 2 mgd , that meet the other three criteria for applicability of today ’s rule, must submit basic information describing the facility , S ource W ater P hy sical D ata, S ource W ater B iological C haracterization D ata , and C ooling W ater Intake S ys tem D ata . In addition, these facilities must submit additional facility- specific information including the selected impingement compliance*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 40 of 567 option , and operational status of each of the facility ’s units. 11 Certain facilities withdrawing the largest volumes of water for cooling purposes have additional information and study

requirements such as relevant biological survival studies and the entrainment s tudy as described below. The final rule uses AIF rather than DIF for purposes of determining which facilities must provide the information required in § 122.21(r)(9 ) through ( 13), re ferred to as the entrainment study . Thus, the rule provides that any facility subject to the rule with actual flows in excess of 125 mgd must provide an entrainment s tudy with its permit application (which includ es the Entrainment Characterization Study at § 122.21(r)(9) ) . 12 Adverse environmental impacts from entrainment result from actual water withdrawals, and not the maximum designed level of withdrawal. Further, using actual flow might encourage some facilities to adopt operational practices to reduce their flows below 125 mgd AIF to avoid collecting supplemental data and submitting the additional entrainment study . Furthermore, any facility that has DIF greater than 2 mgd , that meets the other three criteria for applicability of today ’s rule, is required to submit basic information that will allow the Director to verify its determination of whether it meets the 125 mgd AIF threshold.

11 The final rule allows the Director to waive certain information submission requirements for facilities that already employ closed - cycle cooling. 12 For impoundments constructed in uplands or not in waters of the United States, the point of compliance for measuring AIF to determine if it is greater than 125 mgd is the intake into the impoundment from the waters of the United States.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 41 of 567 EPA has selected an administrative threshold of 125 mgd AIF fo r submission of the entrainment s tudy because this threshold will capture 90 percent of the actual flows but will apply

to only 30 percent of existing facilities. Further, based on EPA’s data there are no closed - cycle recirculating s ys tems in use above this threshold. The 125 mgd AIF threshold will significantly limit facility burden at more than two - thirds of the potentially affected facilities while focus ing the Director on major cooling water withdrawals . Contrary to a number of public comments, however, EPA is not implying or concluding that the 125 mgd threshold is an indicator that facilities withdrawing less than 125 mgd are (1) not causing any advers e impacts or (2) automatically qualify as meeting BTA. In other words , the threshold, while justified on a technical basis, does not result in exemptions from the rule. In stead, EPA is making a policy decision as to which facilities must provide a certain level and ty pe of information. The Director , of course, will retain the discretion to require reasonable information to make informed decisions at the smaller facilities. The 125 mg d threshold focuses on the facil ities with the highest intake flows and the highest likelihood of causing adverse impacts; it is not an indicator that facilities under that threshold are no longer of concern in the final rule. In today ’s rule , EPA seeks to clarify that for some facilitie s, the DIF is not necessarily

the maximum flow associated with the intake pumps . For example, a power plant might have redundant circulating pumps, or might have pumps with a name plate rating that exceeds the maximum water throughput of the associated pip ing . EPA intends for the DIF to reflect the maximum rate at which a facility can ph ys ically withdraw water from a source waterbody (usually normalized to a daily

rate in mgd). This also means that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 42 of 567 a facility that has permanently taken a pump out of service should be able to consider such constraints when reporting its DIF , as the facility ’s capacity to withdraw water may have fundamentally

changed. Additionally , if a facility ’s flow is limited by constrictions in the piping or other ph ysical limit ations (e.g., a given portion of its cooling s ys tem that can onl y safely handle a given amount of flow) and that flow is lower than the DIF for the pumps, the facility should be able to consider such constraints when reporting its DIF , because it is not ca

pable of withdrawing its full pumping DIF without compromising the cooling s ys tem. **I .**  **What are the Requ ire**  **ments for Existing Offshore Oil and Gas Facilities,**  **Offshore Seafood Processing**  **Facilities or LNG Terminals BTA Requirements under**  **the Final Rule ?**  Und er today ’s rule , existing offshore oil and gas facilities, existing offshore seafood processing facilities and existing LN G terminals will be subject to section 316(b) requirements on a BPJ basis . Inthe Phase III rule, EPA studied offshore oil and gas facilities and offshore seafood processing facilities 13 and could not identify any technologies (beyond the protective screens already in use) that are technically feasible for reducing impingement or entrainment in such existing facilities. 14 As discussed in the

13 EPA studied naval vessels and cruise ships as part of its developing a general NPDES permit for discharges from oceangoing vessels. (For mo re information, see http://cfpub.epa.gov/npdes/home.cfm?program_id=350 .) EPA studied offshore seafood processing facilities and oil and gas exploration facilities in the 316(b) Phase III rule. 14 As discussed in today’s preamble, requirements for new offshore facilities that were set forth in the Phase III rule remain in effect.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 43 of 567 Phase III rule, known technologies that could further reduce impingement or entrainment would result in unacceptable changes in the envelope of existing platforms, drilling rigs, mobile offshore drilling units, offshore seafood processing facilities , and similar facilities as the technologies would project out from the hull, potentially decrease the seaworthiness, and potentially interfere with structural components of the hull . It is also EPA ’s view that for many of these facilities, the cooling wat er withdrawals are most substantial when the facilities are operating far out at sea and , therefore , not withdrawing from a water of the United States. EPA is aware that LN G facilities may withdraw hundreds of million gallons per day of seawater for warmin g (re - gasification). However, some existing L

NG facilities might still withdraw water where 25 percent or more of the water is used for cooling purposes on an a ctual intake flow basis . EPA has not identified a uniformly

applicable and available technology for minimizing impingement mortality and entrainment at these facilities. However, technologies might be available for some existing L NG facilities. LNG facilities that withdraw any volume of water for cooling purposes will be subject to site - specific , BPJ determinations of BTA . EPA has not identified any new data or approaches that would result in a different determination. Therefore, EPA has adopted the approach of the proposed rule and is requiring that NPDES P ermit D irectors , on a case - by- case basis using BPJ, determine BTA for existing offshore oi l and gas extraction facilities , existing offshore seafood processing facilities , and existing L NG terminals .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 44 of 567 **J .**  **What is a “New Unit” and How Are New Units Addressed Under the Final**  **Rule?** Today ’s rule establishes requirements for new units at an existing facility that are different than those applicable to existing units at an existing facility . The requirements for new units at existing facilities are modeled after the requirements for a new facility in the Phase I rule. Under t oday ’s rule , a new unit mean s a newl y built, stand - alone unit , whose construction begins after the effective date of the rule . EPA is also clarifying that while Phase I does not include units newly constructed at an existing facility for the same general industrial operation , such units do constitute a new unit at existing facilities and , as such, are subject to today ’s final rule. On the basis of the public comments received on how to define “new un it , ” EPA provide s a clear definition for this term in the final rule. The definition for a new unit at an existing facility establish es a clear regulatory framework for both affected facilities and Directors . This definition captures facilities that are undergoing major construction projects involving the construction of a new stand - alone unit , while not discouraging upgrades . For example, a nuclear facility conducting a measurement uncertainty capture or a stretch power uprate , or a fossil - fuel facility repowering an existing generating unit , would not be considered to result in the relevant unit becoming a new unit. As another example, under this definition placing an offshore facility or vessel into a dry dock for maintenance or repair does not result in either the offshore facility , vessel, or the dry dock as being defined as a new unit.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 45 of 567 Section VI discusses EPA’s rationale for establishing the definitions for new units at existing facilities described below. 1. Electric Generators The final rule defines a new unit at an existing facility as a newl y built, stand alone unit that is constructed at an existing facility and that does not meet the definition of a new fac ility . An existing unit that is repowered or undergoes significant modifications ( such as where the turbine and condenser are replaced) is not considered a new unit . Exhibit I - 4 below provide s several examples and whether these hy pothetical units will be defined as new or existing units. **Exhibit I -**  **4 . Examples of new and existing units**  **at existing**  **electric generat**  **ion facilities Examples of new units at an existing facility**  **Examples of existing units**  A unit that is constructed at a stand - alone location at an existing intake structure An existing unit is retired and demolished, with a new unit constructed in the former unit’s location as a replacement (regardles s of the change in generating capacity, the change in cooling water intake flow, or the use of an existing intake structure) A unit where a new boiler or fuel type is employed

2. Manufacturers At manufacturing facilities that generate electricity onsite, the previous discussion of how to define new units at existing electric generating facilities generally applie s . Some manufacturers employ different industrial processes than an electric generator and therefore have different industrial equipment (including cooling s ys tems) . In particular, manufacturers may

not use a steam condenser or steam turbine for their industrial*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 46 of 567 processes, making the definition for “repowering” above inappropriate for manufacturing facilities . However, manufacturers may have opportunities to reuse cooling water that power plants do not , and in site visits, EPA found many manufacturers have conducted energy and water audits resulting in significant reductions in water withdrawals. The final rule provides for manufacturers to receive credit for such reductions in fresh water withdrawals, It is not as eas y to identify a similar conceptual approach for defining new manufacturing units at existing manufacturing facilities because waste heat can be generated from a variety of sources including exothermic processes, product heating and cooling, and the processing, handling, treating, or disposal of feed streams, waste streams, b y- products, and recycled components. Sources may include direct cooling transferred across an inert material (e.g., heat exchanger, steam condenser), indirect cooling using a working fluid (e.g., chillers, refrigeration), or contact cooling where cooling water comes into direct contact with a product or process stream. 15 Unlike electric generating units where the majority of cooling water comes from a single process source (the steam condenser), manufacturing units may include many

separate non contact or contact cooling water sources dispersed throughout the production processes

15 Note th at EPA did not include the contact cooling category as part of its analysis of possible closed - cycle recirculating system requirements but contact cooling water does nonetheless fall within the definition of cooling water at § 125.92 .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 47 of 567 and the facility . Thus, a definition for manufacturing units must take into consideration a broader category

of cooling water sources. For power generators, the term “generating unit” is quite clear since there is only one product (electricity), the non - contact cooling water predominantly comes from one source, and the application of the term is well understood in the industry . But for some manufacturing facilities, it may be unclear what constitutes a “unit” since manufacturing processes can involve numerous verticall y integrated processes or production steps that may involve intermediate products. For example, a unit could encompass an entire series of production steps (start to finish) or simply the individual steps. Also, there may be ancillary support equipment that serves various functions and it is not clear whether this will be considered a unit or part of a unit. For example, a petroleum refiner will ty picall y include various processes such as distillation, cracking, hydrotreating, coking, reforming, and different ty

pes of various products. Various intermediate products from these processes may

be directly

transported (piped) from one process to another or stored and some may

be sold. And because various intermediate and final process products may be blended into different products, differentiating units on a product or intermediate product basis may not provide clear distinctions. For these reasons EPA has defined new unit to simply mean a new stand - alone unit . A new unit may

include one or more distinct production lines that are added to increase product output and operate parallel to and independentl y of existing production equipment. A new unit does not include the replacement or rebuilding of one or more distinct production lines or distinct processes involv ing the replacement of the majority of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 48 of 567 the waste heat producing equipment that serve s as sources of non - contact cooling water and the majority

of the heat exchanging equipment that contributes heat to the non contact cooling water. Such modifications alone do not render the unit a new unit. A unit undergoing such modifications would continue to be considered an existing unit and would be regulated under the existing unit provisions of this rule. This definition therefore does not impose any disincentives fo r the replacement/upgrade of individual components or ancillary

equipment alone. Exhibit I - 5 below provides several examples of whether these h ypothetical units are defined as new or existing units. As noted above, the Director has broad discretion to assess the scope of any modifications at the manufacturing facility and to determine whether the new construction comprise s a stand - alone unit . For the purposes of today ’s final rule, the Director does not need to address whether the stand - alone unit is for the same general industrial purposes, or whether the new unit is a replacement unit . The key factors in assessing whether a unit will be defined as new lies with whether the construction results in a stand - alone unit . **Exhibit I -**  **5 . Examples of new and existing units at manufacturers**  **Examples of new units at an existing facility Examples of existing units**  **at an existing facility** A unit that is constructed at a stand - alone location at an existing facility (either adjacent to existing units or on newly acquired or developed property) A unit where only the waste heat generating process equipment or the coolin g system equipment is replaced A unit that is constructed adjacent to an existing unit for the sam e industrial activity (such as expanding the production output by building a second unit as a stand - alone unit next to the existing unit) A unit where modifications are made to the waste heat generating process equipment or the cooling system (e.g., optimization, repairs, upgrades to operational elements ) An existing unit is retired before or after a new unit is Replacement or upgrade of ancillary equipment (e.g.,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 49 of 567 constructed as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure) pumps, motors, HVAC, etc.)

An existing unit is retired and demolished, with a new unit constructed in the former unit’s location as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure)

**K .**  **Am endments Related to the Phase I Rule**  EPA is making limited changes to the Phase I rule at 40 CFR Part 125 Subpart I . The changes fall into two categories . The first is deletin g the provision in the Phase I rule that would allow a facility to demonstrate compliance with the Phase I BTA requirements in whole or in part through restoration measures . Th is change responds to the decision of the U.S. Court of Appe als for the Second Circuit , which remanded these provisions to EPA because it concluded that the statute did not authorize restoration measures to comply with CWA section 316(b) requirements . The second category of changes reflects technical corrections or errors that do not change the substance of the Phase Irule . EPA has not reopen ed any other aspects of the Phase I rule other than the provisions specificall y noted here . 1 . Restoration Provisions Not Authorized The Phase I final rule established two compliance tracks . Track I requires facilities to restrict intake flow and velocity . Track II gives a facility the option of demonstrating to the Director that the control measures it employ s will reduce the level of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 50 of 567 adverse environmental impact to a comparable level to what would be achieved by meeting the Track I requirements . As part of this demonstration, Track II originall y allow ed a facility

to make use of restoration measures. The Comprehensive Demonstration Study

allowed a quantitative or qualitativ e demonstration that restoration measures would meet, in whole or in part, the performance levels of Track I . Similarl y, the Verification Monitoring Plan could be tailored to verify that the restoration measures would maintain the fish and shellfish in the waterbody at a substantially similar level to that which would be achieved under Track I. See 6 6 FR 65280

– 65281 , December 18, 2001 . Upon legal challenge, the Second Circuit Court concluded that EPA exceeded its authority by allowing new facilities to comp ly with CWA section 316(b) through restoration measures, and remanded that aspect of the rule to EPA. The Supreme Court did not grant the petitions for writ s of certiorari concerning restoration provisions . Today ’s final rule amend s Phase I to remove those provisions in § § 1 25.84(d) and 125.89(b)(1)(ii) authorizing restoration measures in conformance with the Second’s Circuit’s decision . T oday’s rule also specificall y delet es permit application requirements contained in the Comprehensive Demonstration Study at § 1 25.86(c)(2)(ii); evaluation of proposed restoration measures at § 1 25.86(c)(2)(iv)(C); and verification monitoring requirements at § 1 25.86(c)(2)(iv)(D)( 2 ) that are specific to restoration. EPA acknowledges these changes m ight reduce the alternatives available to some Phase I facilities . EPA notes , however, that the deletion of restoration measures does not otherwise alter the availability of Track II. In any event, EPA’s determination of BTA for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 51 of 567 Phase I did not presume relianc e on the restoration provisions, and the deletion of restoration measures in no way alters the Agency ’s BTA determination for Phase I facilities. 2. Corrections to Subpart I Today ’s final rule changes the applicability of the technical requirements at § 12 5.84 and permit application requirements at § 125.86 statement to match the applicability

statement at § 125.81(a)(3). The applicability in all three instances should specify DIF or withdrawals “greater” than the specified value of 2 mgd. See Basis for the Final Regulation at 66 FR 65270, December 18, 2001. Today ’s rule also correct s the source waterbody flow information submission requirements . Track I requirements at § 1 25.84(b)(3) apply to new facilities that withdraw equal to or greater than 1 0 mg d. Track I requirements at § 1 25.84(c)(2) appl y to facilities that withdraw less than 10 mgd. The s ource waterbody flow information under § 125.86(b)(3) requires a facility to demonstrate it has met the flow requirements of both § § 1 25.84(b)( 3) “ and ” 125.84(c)(2) . However, a facility cannot be subject to both § § 1 25.84(b)(3) and 125.84(c)(2) at the same time . Accordingl y, the word “and” should read as “or” in § 1 25.86(b)(3) . In addition, today ’s final rule correct s the permit application requirement for the Source Water Biological Characterization at § 1 22.21(r)(4). Accordingly , reference s to the Source Water Biological Characterization should read as (r)(4) . However, the reference s to the Source Water Biological Characterizati on at § 1 25.86(b)(4)(iii), at §*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 52 of 567 1 25.87(a), and at § 1 25.87(a)(2) incorrectl y refer to § 1 22.21(r)(3) and are thus being corrected . **II. Legal Authority**  **for and Background of**  **the Final Regulation**  **A. Legal Authority**  Today ’s final rule is issued under the authority of C lean W ater A ct sections 101, 301, 304, 308, 316, 401, 402, 501, and 510, 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and 1370. **B. Purpose of the Regulation**  The purpose of today ’s rule is to reduce impingement and entrainment of fish , shellfish and other aquatic organisms at cooling water intake structures. T oday ’s rule establishes national requirements for cooling water intake structures at existing facilities under section 316(b) of the CWA. That s ection provides that any stand ard established pursuant to CWA section s 301 or 306 and applicable to a point source must require that the location, design, construction, and capacity of cooling water intake structures reflect the BTA for minimizing adverse environmental impact . Today ’s rule establishes requirements applicable to all existing power - generating facilities and existing manufacturing and industrial facilities that are point sources, that have a DIF of greater than 2 mgd from waters of the United States , and use at l east 25 percent of the water they withdraw exclusively

for cooling purposes on an a ctual intake flow basis. In addition, EPA is today

also making minor changes to its earlier rule establishing section 316(b) requirements for new facilities. Specifically , EPA is remov ing a provision that would*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 53 of 567 have allowed a restoration - based alternative for complying with performance standards as well as the associated monitoring and other requirements for demonstrating compliance . **C. Background**  1. The Clean Water Act a. General The Federal Water Pollution Control Act, also known as the CWA , 33 U.S.C. 1251 et seq., seeks to “restore and maintain the chemical, phys ical, and biological integrity of the nation’s waters.” 33 U.S.C. 1251(a). Among the goals of the Act is, wherever attainable, an interim goal of water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation i n and on the water. 33 U.S.C. 1251(a)(2). In furtherance of these objective s, the CWA establishes a comprehensive regulatory

program, key

elements of which are (1) a prohibition on the discharge of pollutants from point sources to waters of the United States, except in compliance with the statute and (2) authority for EPA or auth orized States or Tribes to issue NPDES permits that authorize and regulate the discharge of pollutants . CWA section 402 authorizes EPA (or an authorized State or Tribe) to issue an NPDES permit to any

person discharging any pollutant or combination of pollutants from a point source into waters of the United States. Forty- s ix States and one U.S. territory are authorized under section 402(b) to administer the NPDES permitting program. NPDES permits restrict the types and amounts of pollutants, including heat, that may be discharged from various industrial, commercial, and other sources of wastewater. These*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 54 of 567 permits control the discharge of pollutants b y requiring dischargers to meet technologybased and possibl y water - quality- based effluent limitations . Under section 316(b), NPDES permits are required to contain conditions to imp lement the requirements of section 316(b). CWA section 510 provides that, except as provided in the CWA, nothing will preclude or deny the right of any State (or political subdivision thereof) to adopt or enforce any requirement respecting control or abatement of pollution; except that if a limitation, prohibition or standard of performance is in effect under the CWA, such State may not adopt any

other limitation, prohibition, or standard of performance which is less stringent than the limitation, prohibiti on, or standard of performance under the Act. EPA interprets this to reserve for the States authority to implement requirements that are more stringent than the Federal requirements under state law. PUD No. 1 of Jefferson County v. Washington Dep't of Ecology , 511 U.S. 700, 705 (1994). New York and California have enacted State requirements that are at least as stringent as those of the final rule, and therefore, EPA has anal yzed facilities in those States that are subject to those State requirements as already

complying with the final rule . 17 Those facilities still must comply with the administrative requirements of the final rule. CWA sections 301, 304, and 306 require that EPA develop technology- based effluent limitations guidelines and new source performance standards that are used as the

17 For example, California policy addressing 19 coastal power plants would not affect the compliance costs of inland facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 55 of 567 basis for discharge requirements in wastewater discharge permits. EPA develops these effluent limitations guidelines and standards for categories of industrial dischargers on the basis of the pollutants of concern discharged by the industry , the degree of control that can be attained using various levels of pollution control technology appropriate for each industrial process or subcategory , consideration of various economic tests implemented under the authority of the CWA for each level of control, and other factors identified in CWA sections 304 and 306 (such as non - water quality environmental impacts including energy impacts). EPA has promulgated regulations setting effluent limitations guidelines and standards under CWA sections 30 1, 304, and 306 for 57 industry categories . See 40 CFR parts 405 through 471. EPA has established effluent limitations guidelines and standards that appl y to the industry categories that are the largest users of cooling water (e.g., steam electric power generation, paper and allied products, petroleum refining, iron and steel manufacturing, and chemicals and allied products), as well as many other industrial categories that may include facilities subject to this final rule. b. Section 316(b) Section 316(b) states, in full , Any standard established pursuant to section 301 or section 306 of [the Clean Water] Act and applicable to a point source shall require that the location, design, construction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impact. 33 U.S.C. 1326(b). Th is provision is unique among CWA provisions because it addresses the adverse environmental impact cause d specifically by the intake of cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 56 of 567 water, i n contrast to other provisions of the Act that regulate the discharge of pollutants into waters of the United States. The CWA does not further define the substantive standard specified in s ection 316(b)

– “b est technology available for minimizing adverse environmental impact” (BTA) . 33 U.S.C . 1326(b). The standard that cooling water intake structures must achieve under section 316(b)

– BTA

– is a different standard from those prescribed under sections 301 and 306 of the Act. Riverkeeper, Inc. v. v. EPA , 358 F.3d 174 (2d Cir. 2004). Moreover, unlike s ections 304 and 306, s ection 316(b) does not set forth the specific factors that the EPA must consider in determining BTA. BTA is “the onl y substantive statutory requirement explicitly

applicable to the intake structure regulations.” Id. at 186. Unlike other provisions of the Act, section 316(b) standards are not subject to a “host” of other requirements or limitations. Ibid. There is no “elucidating language applicable to the BTA test.” Entergy Corp. v. Riverkeeper, Inc. , 556 U.S. 208, 221 (2009). 18 Section 316(b) does, however, cross - reference s ections 301 and 306 of the CWA by stating that any standards established pursuant to those sections also require that cooling water intake structures reflect BTA. Ibid. This cross reference, in the view of the Second Circuit, is an invitation, not a straitjacket. EPA “may” look to the referenced

18 Included in an appendix to the decision is a table comparing CWA statutory standards under 301, 306 and 316(b), the table. In the column headed “Statutorily Mandated Factors,” for section 316(b), the table states “N/A.”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 57 of 567 sections in discerning what factors Congress intended EPA to consider in determining BTA. Because section 316(b) refers to sections 301 and 306 but provides a different standard ("best technology available for minimizing adverse environmental impact" instead of, for example, "best available demonstrated control t echnology ") and does not explicitly provide that regulations pursuant to section 316(b ) are subject to the requirements of sections 301 and 306 , we think it is permissible for the EPA to look to those sections for guidance but to decide that not every statutory directive contained therein is applicable to the Rule. The terse statutory

description of BTA and the absence of any prescribed statutory factors for consideration in determining BTA suggest that Congress delegated EPA significant rulemaking discretion in this area. 19 As noted, in contrast to effluent limitations guidelines and standards , the CWA does not describe the factors to be considered in establishing section 316(b) substantive performance requirements that reflect the “best technology available for minimizing adverse environmental impact” nor does it require that EPA develop uniform nationally applicable performance requirements through rule making. The U. S. Supreme Court has, however, recent ly provided guidance , in Entergy Corp. v. Riverkeeper, Inc ., in interpreting section 316(b) and what factors EPA may

19 The Second Circuit has noted the limited legislative history for section 316(b) . “T his paucity of legislative history, when measured against the volumes of drafts and speeches devoted to other aspects of the 1972 amendments, and when combined with the brevity of the provision itself, coun sels against imputing much specific intent to Congress beyond the section's words themselves. To the extent the provision is silent on issues to which other sections speak, we hesitate to draw the negative inference that the brevity of section 316(b) refle cts an intention to limit the EPA's authority rather than a desire to delegate significant rulemaking authority to the Agency.” Id. at 187.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 58 of 567 consider in its standard - setting. That decision addressed the question of whether CWA s ection 316(b) authorizes EPA to compare costs and benefits of various technologies when setting national performance standards for cooling water intake structures under CWA s ection 316(b) . In overturning EPA’s earlier rule to establish section 316(b) requirements for existing facilities , the Second Circuit held that balancing costs and benefits was an impermissible factor for standard setting under section 316(b) . The Supreme Court reversed and remanded the Second Circuit ruling in a 6 - 3 opinion authored b y Justice Scalia. The Court held that it is permissible for EPA to consider a cost - benefit anal y sis in setting national performance standards for cooling water intake structures under s ection 316(b) . The Court held that EPA has the discretion to consider costs and benefits under s ection 316(b) but is not required to do so. 556 U.S. 208, 222 - 23 . The C ourt’s discussion of the language of section 316(b)

— section 316(b) is “unencumbered b y specified statutory factors”

—and its critique of the Second Circuit’s decision affirms EPA’s broad discretion to consider a number of factors in standard setting under s ection 316(b) . While the Supreme Court’s decision is limited to whether or not EPA may properl y consider one factor (cost/benefit anal ys is) under section 316(b), the language also indicates that EPA has wide discretion in considering other factors that it deems relevant to 316(b) standard setting . 556 U.S. 208, 222 (2009) (“It is eminently reasonable to conclude that § 1326b ’s silence is meant to convey nothing more than a refusal to tie the agency ’s hands as to whether cost - benefit analy sis should be used, and if so to what de gree .” ) .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 59 of 567 Regarding the other factors EPA may , but is not mandated to , consider, as noted above, section 316(b) cross references CWA sections 301 and 306 by requiring that any standards established pursuant to those sections also must require that the location, design, construction and capacity of intake structures reflect BTA. Following the decisions of the Second Circuit in reviewing both the Phase I and Phase II rules, EPA has interpreted the cross reference as authorizing consideration of the factors considered under those provisions to help guide section 316(b) rulemaking without determining that each of those factors i s applicab le to this rule . Thus, for example, section 306 directs EPA to establish performance standards for new sources based on the BADT (best available demonstrated control technology). 33 U.S.C. 1316(a)(1). In establishing B ADT, EPA “shall take into consideration the cost of achieving such effluent reduction, and any non water quality environmental impact and energy requirements.” 33 U.S .C. 1316(b)(2)(B). Similarly, CWA section 301 requires EPA , in establish ing standards known as effluent limitations guidelines , to consider specified factors. For a complete discussion of factors considered in establishing section 301 effluent limits, see 76 FR 22178 - 22179, April 20, 2011 . But, EPA in establishing section 316(b) standards is not constrained in what factors it considers o r bound by any statutorily

prescribed tests as is the case with sections 301 and 306. Consequently , while s ection 316(b) expressly refers to section 301 and 306 , and , while it shares some of the same words used in sections 301(b) and 306, its*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 60 of 567 language is different. 20 These differences in the statutory descriptions , coupled with the brevity of section 316(b) itself, prompt EPA to examine the factors described in section 301 , 306 and, ultimately, section 304 where relevant in EPA’s determination of the “best technology

available to minimize adverse environmental impact” of cooling water for intake structures for existing facilities. A s noted above , there are signific ant differences between section 316(b) and sections 301 , 304 and 306 . See Riverkeeper, Inc. v. United States Environmental Protection Agency (2nd Cir. Feb. 3, 2004) (“not every statutory directive contained [in sections 301 and 306] is applicable” to a sec tion 316(b) rulemaking). Moreover, as the Supreme Court recognized, while the provisions governing the discharge of toxic pollutants must require the elimination of discharges if technically and economically achievable, section 316(b) has the less ambitiou s goal of “minimizing adverse environmental impact.” 556 U.S. at 219. Incontrast to the effluent limitations provisions, the object of the best technology available is explicitly

articulated by

reference to the receiving water: to minimize adverse environmental impact in the waters from which cooling water is withdrawn. This difference is reflected in EPA’s past practices in

20 Com pare “best technology available for minimizing adverse environmental impacts” with “best practicable control technology currently available”( 301(b)(1)A)), “best conventional pollutant control technology (301(b)(2)(E)) “best available technology economically achievable” (301(b)(2)(A)), and best available demonstrated control technology, (306(b)(1)(B)) . Section 31 6(b), section 301(b)(1)(A)

—the BPT provision

— section 301(b)(2)(E)

– the BCT provision -- section 301(b)(1)(B)

—the BAT provision

— and section 306(b)(2)(E) . All include the terms “best , ” “technology , ” and “ available , ” but none also include the mo difying phr ase “for minimizing adverse environmental impacts,” found in section 316(b). See 33 U .S.C. 1311(b)(1)(A) and (2)(A).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 61 of 567 implementing sections 301, 304, as contrasted with 316(b). For example, EPA has established BAT effluent limitations guidelines and new source performance standards on the basis of the efficacy

of one or more technologies to reduce pollutants in wastewater in relation to their costs without necessaril y considering the impact on the receiving waters. This contrasts to 316(b) requirements which historically have been developed on a site specific basis, where EPA has considered the costs of technologies in relation to the benefits of minimizing adverse environmental impact in establishing 316(b) requirement s . In Re Public Service Co. of New Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1 EBAD 455 (Aug. 4, 1978); Seacoast Anti -Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). EPA concluded that, because both section 301 and 306 are expressly cross - referenced in section 316(b), EPA could reasonably

interpret section 316(b) as authorizing consideration , where appropriate, of the same factors, including costs . EPA stresses that it may therefore consider some of the same factors, even if it is not legally required to consider them in the same way . 2. Earl y Li tigation History On January

19, 1993, a group of individuals and environmental organizations 22 filed, under CWA section 505(a)(2), 33 U.S.C. 1365(a)(2), a complaint in Cronin, et. al.

22 The plaintiffs are the followin g: Riverkeeper, Inc.; Alex Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van Rossum, a/k/a The Delaware Riverkeeper; Terrance E. Backer, a/k/a The Soundkeeper; John Torgan, a/k/a The Narragansett BayKeeper; Joseph E. Payne, a/k/a The Casco BayKeeper; Leo O’Brien,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 62 of 567 v. Reilly , 93 Civ. 314 (LTS)(S.D.N.Y.). The plaintiffs alleged that EPA had failed to perform a nondiscretionary duty to issue regulations implementing CWA section 316(b), 33 U.S.C. 1326(b). In 1995 , EPA and the plaintiffs executed a consent decree in the case . As amended, it provided for EPA to implement CWA section 316(b) by prescribed dates in the three separate rule - making proceeding s. Phase I concerned cooling water intake structures at new facilities , Phase II existing power plants using large volumes of cooling water and Phase III for existing smaller - flow power plants and factories in at least four industrial sectors (pulp and paper making, petroleum and coal products manufacturing, chemical and allied manufacturing, and primary metal manufacturing) . EPA promulgated the Phase I rule in December, 2001, the Phase II rule in July, 2004 and the Phase III rule in June, 2006. On November 17, 2006, some of the same environmental organizations in the Cronin case filed a second complaint, amended on January 19, 2007, in Riverkeeper, et al. v. EPA , 06 Civ. 12987 (S.D.N.Y.) asserting that EPA ’s Phase III rule failed to discharge EPA’s duty under CWA section 316(b ). On August 14, 2008, EPA filed a motion to terminate the Cronin proceeding because it had discharged its obligations (to take final action) under the decree with respect to the 2004 Phase II and 2006 Phase III rulemakings. Subseque ntly , EPA entered

a/k/a the San Francisco BayKeeper; Sue Joerger, a/k/a The Puget Soundkeeper; Steven E. Fleischli, a/k/a The Santa Monica BayKeeper; Andrew Willner, a/k/a The New

York/New Jersey Baykeeper; The Long Island Soundkeeper Fund, Inc.; The New York C oastal Fishermen’s Association, Inc.; and The American Littoral Society, Inc.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 63 of 567 into a settlement with the plaintiffs in both lawsuits. Under the settlement agreement, EPA agreed to sign a notice of a proposed rulemaking implementing CWA section 316(b) at existing facilities no later than March 14, 2011, and to sign a notice taking final action on the proposed rule no later than July 27, 2012. Plaintiffs agreed to seek dismissal of both their suits, subject to a request to reopen the Cronin proceeding if EPA failed to meet the agreed deadlines. The district courts hav e now entered orders of dismissal. On March 11, 2011, the parties agreed to an amendment to the settlement agreement to extend the date f

or proposal to March 28, 2011. On July 17, 2012, the parties agreed to an amendment to the settlement agreement to extend the date for the final rule to June 27, 2013. On June 21, 2013, the parties agreed to extend the date to November 4, 2013, to accommodate completion of formal consultation under the Endangered Species Act. In part due to the government shutdown, on No vember 12 , 2013, the parties agreed to extend the date to January 14, 2014 . On February 10, 2014 , to continue progress on the Endangered Species Act ( ESA ) consultation process, the parties agreed to extend the date to April 17, 2014 . Finally, on April 23 2014, i n a conference with the cour t EPA informed the judge that the EPA and the Services would complete the ESA consultation, so that the EPA w ould sign the rule by May 16, 2014. The court entered an order provisionally

reinstating the case if EPA failed to inform the court by May 19 , 2014 that it had taken the contemplated action. On May 19, 2014, the Administrator signed this notice for publication in the Federal Register. 3. Prior EPA Actions to Address Cooling Water Intake Structures a. 1976 Rulemaki ng*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 64 of 567 In April 1976, EPA promulgated regulations under section 316(b) that addressed cooling water intake structures. 41 FR 17387 , April 26, 1976 . The rule added a new § 401.14 to 40 CFR Chapter I that reiterated the requirements of CWA section 316(b). It also added a new part 402, which included three sections: (1) § 402.10 (Applicability), (2) § 402.11 (Specialized definitions), and (3) § 402.12 (Best technology available for cooling water intake structures). Section 402.10 stated that the provisions of part 402 applied to “cooling water intake structures for point sources for which effluent limitations are established pursuant to section 301 or standards of performance are established pursuant to section 306 of the Act.” Section 402.11 defined the terms cooling water intake structure , location , design , construction , capacity , and Development Document . Section 402.12 included the following language:

“ The information contained in the Development Document shall be considered in determining whether the locati on, design, construction, and capacity of a cooling water intake structure of a point source subject to standards established under section 301 or 306 reflect the best technology available for minimizing adverse environmental impact. ” In 1977, electric utility

companies challenged those regulations, arguing that EPA had failed to compl y with the requirements of the Administrative Procedure Act in promulgating the rule. Specificall y, the utilities argued that EPA had violated the Administrative Procedure Act in promulgating regulations mandating consideration of the information in the Development Document in establishing 316(b) conditions in individual NPDES permits because EPA had neither published the Development Document in the Federal Register nor properly incorporated the document into the rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 65 of 567 by reference. The U.S. Court of Appeals for the Fourth Circuit agreed . The court determined that the information in the Development Document was part of the substance of a regulation imposing specific obligations in mandatory terms. As such, the information must either be published in the Federal Register in its entirety or to be reasonabl y available and properl y incorporated b y reference under Federal Register requirements. The court explained it did n ot object to site - specific implementation of the section 316(b) requirements (“[w]hile we emphasize we do not fault EPA for its point source b y point source application”), it did require EPA to “devise a less uncertain method of advising those affected of the conditions by which they

are to be bound.” Appalachian Power Co. v. Train, 566 F.2d 451 , 457 (4th Cir. 1977). W ithout reaching the merits of the regulations themselves, the court remanded the rule. EPA later withdrew part 402. (See 44 FR 32956, June 7 , 1979.) Section 402.10, however, now codified at § 401.14, remains in effect. Following the Fourth Circuit remand of EPA’s section 316(b) regulations in 1977, NPDES permit authorities have made decisions implementing CWA section 316(b) and § 401.14 without the direction of a national rule . EPA published draft guidance addressing section 316(b) implementation in 1977. See Draft Guidance for Evaluating the Adverse Impact of Cooling W

ater Intake Structures on the Aquatic Environment: Section 316(b) Pub. L. 92

–500 (U.S. EPA 1977). That draft guidance describes the studies recommended for evaluating the impact of cooling water intake structures on the aquatic environment and recommends a basis for determining the BTA for minimizing adverse environmental impact. The 1977 section 316(b) draft guidance states, “[t]he environmental - intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 66 of 567 interactions in question are highl y site - specific and the decision as to best technology available for intake design, location, construction, and capacity must be made on a case by- case basis” (Section 316(b) Draft Guidance, U.S. EPA 1977, p. 4). This site - specific approach was also consistent with the approach described in the 1976 Development Document referenced in the remanded regulation. (See DCN 1 - 1056 - TC from the Phase I docket .) The 1977 section 316(b) draft guidance suggested a general process for developing information needed to support section 316(b) decisions and presenting that information to the Director . The process involved developing a site - specific study of the environmental effects associated with each facility that uses one or more cooling water intake structures, and consideration of that study by the Director in determining whether the facility

must make any

changes for minimizing adverse environmental impact. Under this framework, the Director determined whether appropriate studies have been performed, whether a given facility has minimized adverse environmental impact, and what, if any, technologies may be required. b. Phase I

– New Facility Rule i. Ru lemaking On November 9, 2001, EPA took final action on regulations governing cooling water intake structures at new facilities. See 66 FR 65255, December 18, 2001. On December 26, 2002, EPA made minor changes to the Phase I regulations. 67 FR 78947. The fi nal Phase I new facility rule (40 CFR 125, Subpart I) establishes requirements applicable to the location, design, construction, and capacity of cooling water intake structures at new facilities that have a design capacity to withdraw greater than 2 mgd*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 67 of 567 an d use at least 25 percent of the water they withdraw solel y for cooling purposes on an a ctual intake flow basis . In the new facility

rule, EPA adopted a two - track approach. Under Track I, facilities that withdraw equal to or greater than 10 mgd were required to meet three requirements. First, the intake flow of the cooling water intake structure is restricted, at a minimum, to a level commensurate with that which could be attained b y use of a closed cycle, recirculating cooling s ys tem. Second, th e design through - screen intake velocity is restricted to 0.5 fps (foot per second) . Third, the total quantity of intake is restricted to a proportion of the mean annual flow of a freshwater river or stream, or to a level necessary to maintain the natural thermal stratification or turnover patterns (where present) of a lake or reservoir except in cases where the disruption is beneficial, or to a percentage of the tidal excursions of a tidal river or estuary . Further, i f there are, for example, endangered or threatened species stressed by a facility ’s intake structure, a facility that would otherwise meet the applicable performance requirements may have to s elect and implement additional design and construction or operational measures to address impingement mo rtality

and entrainment if these measures are inadequate to protect the species. Facilities with greater than 2 mgd but less than 10 mgd flows are not required to reduce intake flow to a level commensurate with a closed - cycle, recirculating cooling sy stem, but they

must still meet specific operational criteria. Under Track II, a facility ha d the opportunity to demonstrate to the NPDES permitting authority ( Director) that the technologies it employ s will reduce the level of adverse environmental impact to a comparable level to what would be achieved by*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 68 of 567 meeting the Track I requirements for restricting intake flow and velocity. In making this demonstration, the regulations allow a facility to rely on a combination of measures in addition to technology

contro ls for reducing impingement and entrainment to achieve results equivalent to the Track I intake flow and velocity requirements. Among these measures , the rule would have allowed restoration of the affected waterbody through efforts such as restoc king fish and improving the surrounding habitat to offset the adverse effects that would otherwise be caused b y operating the intake structures. The Second Circuit, in reviewing the new facility rule, determined that section 316(b) did not authorize the us e of restoration measures in complying with the EPA performance standard. (Note that EPA is removing the provision related to restoration measures from the CFR in this rulemaking but has included the above description of the Phase I rule for completeness. ) For more information, see S ection I above . In addition, under the Phase I rule, the Director may establish less stringent alternative requirements for a facility if compliance with the Phase I standards would result in compliance costs wholly out o f proportion to those EPA considered in establishing the Phase I requirements or would result in significant adverse impacts on local air quality, water resources, or local energy markets. EPA specificall y excluded new offshore oil and gas extraction facil ities from the Phase I new facility

rule but committed to consider establishing requirements for such facilities in the Phase III rulemaking. 66 FR 65338, December 18, 2001. ii. Subsequent L itigation*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 69 of 567 Various environmental and industry groups challenged the Phase I rule. In February 2004, the Second Circuit sustained the entire rule except for the restoration provision, ruling that restoration was not a technology as provided for in section 316(b). With respect to the other provisions of the rule, the court concluded the Phase I rule was based on a reasonable interpretation of the applicable statute and sufficiently supported by the record. Restoration provisions of the rule were remanded to EPA for further rulemaking consistent with the court’s decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd Cir., 2004). Today ’s rule removes the restoration provisions from the Phase I rule. For more details, see Chapter I of this preamble. c. Phase II

– Large Flow Existing Power Plants i. Rulemaking On February

16, 2004, EPA took final action on regulations governing cooling water intake structures at certain existing power- producing facilities. 69 FR 41576, July 9, 2004. The final 2004 Phase II rule applied to existing facilities that are point sources; that, as their primary

activity , both generate and transmit electric power or generate electric power for sale or transmission; that use or propose to use a cooling water intake structure with a total DIF of 50 mgd or more to withdraw water from waters of the United States; and that use at least 25 percent of the withdrawn water exclusively for cooling purposes on an a ctual intake flow basis . In addition, power producers fitting the description above were also subject to the final 2004 Phase II rule even if they obtain their cooling water from one or more independent suppliers of cooling water. Such facilities were subject to the rule if their supplier withdraws water from waters of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 70 of 567 United States even if the s upplier was not itself a 2004 Phase II existing facility . EPA included this provision to prevent circumvention of the 2004 Phase II rule requirements by a facility purchasing cooling water from entities not otherwise subject to section 316(b). The final 20 04 Phase II rule and preamble also clarified the definition of an existing power - producing facility . The 2004 Phase II rule defined an existing facility as “any facility that commenced construction as described in § 1 22.29(b)(4) on or before January 17, 20 02; and any

modification of, or addition of a unit at such a facility that does not meet the definition of a new facility at § 1 25.83.” Because the definition of the term existing facility was based in part on the Phase I definition of the term new facility , the preamble to the final 2004 Phase II rule also clarified and provided some examples of how the definition of existing facility might appl y to certain changes at power - producing facilities. Under the 2004 Phase II rule, EPA established BTA performance standards for the reduction of impingement mortality and, under certain circumstances, entrainment ( see 69 FR 41590 - 41593 , July 9, 2004). The performance standards consisted of ranges of reductions in impingement mortality and, if applicable, entrainment ( e.g. , reduce impingement mortality

by 80 to 95 percent and/or entrainment by 60 to 90 percent) relative to a calculation baseline that reflected the level of impingement mortality and entrainment that would occur absent specific controls. These performanc e standards were not based on a single technology but, rather, on consideration of a suite of technologies that EPA determined were commercially available and economically achievable for the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 71 of 567 industries affected as a whole (69 FR 41598 - 41610, July 9, 2004). EPA based the impingement mortality

and entrainment performance standards on a suite of technologies because it found no single technology to be effective at all affected facilities. For impingement standards, these technologies included the following: (1 ) fine - and wide mesh wedgewire screens, (2) barrier nets, (3) modified screens and fish return sy stems, (4) fish diversion s ys tems, and (5) fine - mesh traveling screens and fish return sy stems. With regard to entrainment reduction, these technologies include the following: (1) aquatic filter barrier sy stems, (2) fine - mesh wedgewire screens, and (3) fine - mesh traveling screens with fish return s ys tems. Because EPA based the performance standards on a combination of technologies and because of the uncertainty inherent in predicting the efficacy

of one or more of these technologies as applied to different facilities, EPA promulgated these standards as ranges. Furthermore, because the site - specific performance was based on a comparison to a once - through s ys tem w ithout any specific controls on the shoreline near the source waterbody (i.e., calculation baseline, for more details see S ection III.B.1 of the preamble to the proposed rule, 76 FR 22185, April 20, 2011), the rule also allowed facilities to receive credit toward meeting the performance standards for impingement and entrainment reduction associated with alternative locations of their intakes (e.g., deep water wher e fish and shellfish were less abundant). The ty pes of performance standard applicable to a facility ( i.e. , reductions in impingement mortality

only or both impingement mortality and entrainment) were based on several factors, including the facility ’s location ( i.e. , source waterbody), rate of use (capacity utilization rate), and the proportion of the waterbody withdrawn.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 72 of 567 The 2004 Phase II rule identified five compliance alternatives to meet the performance standards. A facility could de monstrate to the Director one of the following: (1) that it has already reduced its flow commensurate with a closed - cycle recirculating sy stem (to meet both impingement mortality and entrainment), or that it has already reduced its maximum through - screen v elocity to 0.5 fps or less (to meet the impingement performance standard only); (2) that its cooling water intake structure configuration meets the applicable performance standards; (3) that it has selected design and construction technologies, operational measures, and/or restoration measures that, in combination with any

existing design and construction technologies, operational measures, and/or restoration measures, meet the applicable performance standards; (4) that it meets the applicability criteria and has installed and is properl y operating and maintaining a rule - specified and/or approved State - specified design and construction technology

( i.e. , submerged cylindrical wedgewire screens) in accordance with § 1 25.99(a) or an alternative technology that meets the appropriate performance standards and is approved b y the Director in accordance with § 1 25.99(b); or (5) that its costs of compliance would be significantly greater than either the costs considered by the Administrator for a like facility to meet the applicable performance standards, or the benefits of meeting the applicable performance standards at the facility. Under the cost cost comparison alternative, a Director could determine that the cost of compliance for a facility would be significantly greater than the costs considered b y EPA in establishing the applicable impingement mortality and entrainment performance standards. Similarly, under the cost - benefit comparison alternative, a Director could determine that the cost of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 73 of 567 compliance for a fac ility

would be significantly

greater than the benefits of complying with the applicable performance standards. If either of these determinations were made, the Director would have to make a site - specific determination of BTA for minimizing adverse environm ental impact that came as close as practicable to meeting the applicable performance standards at a cost that did not significantly exceed either the costs EPA considered in establishing these standards or the site - specific benefits of meeting thes e standards. The final 2004 Phase II rule also provided that a facility that chooses specified compliance alternatives might request that compliance with the requirements of the rule be determined on the basis of implementing a Technology Installation and Operation Plan (TIOP) that would indicate how the facility would install and ensure the efficacy , to the extent practicable, of design and construction technologies, and/or operational measures, and/or a Restoration Plan. The rule also established requirements for deve loping and submitting a TIOP ( § 1 25.95(b)(4)(ii)) and provisions that specified how compliance could be determined on the basis of implementing a TIOP ( § 1 25.94(d)). Under these provisions, a TIOP could be requested in the first permit term, and continued use of a TI OP could be requested where a facility was in compliance with such plan and/or its Restoration Plan. ii. Subsequent L itigation*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 74 of 567 Industry , environmental stakeholders, and some States 23 challenged many aspects of the 2004 Phase II regulations. On January 25, 2007, the Second Circuit (Riverkeeper, Inc. v. EPA , 475 F.3d 83, (2d Cir., 2007)) upheld several provisions of the 2004 Phase II rule and remanded others to EPA for further rulemaking. As noted above, for the 2004 Phase II rule EPA did no t select closed - cycle cooling as BTA. Instead, EPA selected a suite of technologies to reflect BTA, including, for example, screens, aquatic filter barriers, and barrier nets. According to the chosen technologies, EPA established national performance standards for reducing impingement mortality and entrainment of fish and fish organisms but did not require the use of any specific technology . Among the aspects of the rule the Second Circuit remanded for further clarification was EPA’s decision to reject clos ed - cycle cooling as BTA and EPA’s determination of performance ranges as BTA. In addition, the Second Circuit found that, consistent with its Phase I decision, restoration was not authorized under the CWA as a technology

for BTA and that EPA’s cost - benefit site - specific compliance alternative was not in accord with the CWA. There are also several issues for which the court requested additional clarification and some instances where the court determined that EPA had failed to provide adequate notice and oppo rtunity to comment on certain provisions of the rule.

23 Rhode Island, Connecticut, Delaware, Massachusetts, New Jersey, and New York.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 75 of 567 iii. Suspension As a result of the decision in Riverkeeper, Inc. v. EPA , 475 F.3d 83, (2d Cir., 2007), EPA, on July

9, 2007 (72 FR 37107) suspended the requirements for cooling water intake structures at 2004 Phase II existing facilities, pending further rulemaking. Specificall y, EPA suspended the provisions in § 1 22.21(r)(1) (ii) and (r)(5), and part 125 Subpart J, with the exception of § 1 25.90(b). EPA explained that suspending the 2004 Phase II requirements was an appropriate response to the Second Circuit’s decision and that such action would allow it to consider how to res pond to the remand. In addition, suspending the 2004 Phase II rule was responsive to the concerns of the regulated community

and permitting agencies, both of whom sought guidance regarding how to proceed in light of the approaching deadline for compliance with the remanded rule. EPA’s suspension clarified that pending further rulemaking, permit requirements for cooling water intake structures at 2004 Phase II facilities should be established on a case by- case, BPJ basis (see § 1 25.90(b)). iv. Supreme Court Decision Following the decision in the Second Circuit, several industry group litigants petitioned the U.S. Supreme Court to hear an appeal regarding several issues in the case. Entergy Corp. v. Riverkeeper, Inc. et al., S. Ct. No. 07- 588, et al. On April 14, 2008, the Supreme Court granted the petitions for writs of certiorari submitted b y these 2004 Phase II litigants, but it limited its review to the issue of whether section 316(b) authorizes EPA to compare costs with benefits in determining BTA for cool ing water intake structures. The Supreme Court held oral arguments in this case on December 2, 2008, and issued a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 76 of 567 decision on April 1, 2009. As explained above, the Supreme Court held that it is permissible for EPA to rely on cost - benefit analy sis in decis ion making. The court indicated that the phrase “best technology available for minimizing adverse environmental impact” does not unambiguousl y preclude use of cost - benefit analy sis in decision making. 566 U.S. at 223(2009). The ruling supports EPA’s discre tion to consider costs and benefits, but it imposes no obligation on the Agency to do so. d. Phase III

– Existing Power Plants Below 50 mgd , Existing Manufacturing Facilities, and New Offshore Oil and Gas Facilities i. Rulemaking On June 16, 2006, EPA publ ished a final Phase III rule that established categorical regulations for new offshore oil and gas extraction facilities that have a DIF threshold of greater than 2 mgd and that withdraw at least 25 percent of the water exclusively

for cooling purposes on an a ctual intake flow basis . The rule establishes requirements that address intake velocity, proportionate flow for sensitive locations, design and construction technologies or operational measures, monitoring and recordkeeping, based on if a facility empl oy s a sea chest or not, and is fixed or not. Like the Phase I rule, this rule includes a Track II. In the Phase III rule, EPA declined to establish national standards for Phase III existing facilities. Instead it concluded that CWA section 316(b) requirements for electric generators with a DIF of less than 50 mgd and all existing manufacturing facilities would continue to be established on a case - bycase basis under the NPDES permit program using BPJ. (71 FR 35006, June 16, 2006). ii. Subsequ ent L itigation*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 77 of 567 Following promulgation of the rule, a number of parties filed petitions for review that were subsequently

consolidated for hearing in the U.S. Court of Appeals for the Fifth Circuit. In2009 , EPA petitioned the Fifth Circuit to remand to the Agency those p arts of the rule that applied to existing facilities. Specifically , EPA requested remand of those provisions in the Phase III rule that establish 316(b) requirements at electric generators with a DIF of less than 50 mgd, and the provision establishing requirements for existing manufacturing facilities on a case - by- case basis using BPJ. This request did not affect the Phase III rule requirements that establish categorical regulations for new offshore oil and gas extraction facilities that have a DIF threshol d of greater than 2 mgd and that withdraw at least 25 percent of the water exclusively for cooling purposes on an a ctual intake flow basis . On July 23, 2010, the U.S. Court of Appeals for the Fifth Circuit issued a decision affirming the parts of Phase III rule relating to new offshore oil and gas facilities. The court granted EPA’s motion to remand the rule with respect to existing facilities. In sustaining the requirements for new offshore oil and gas facilities, the Fifth Circuit upheld EPA’s decision no t to use cost benefit balancing in determining the requirements for these new facilities. **I II**  **. Environmental**  **Effects Associated with Cooling Water Intake Structures**  **A. Introduction**  Multiple ty

pes of adverse environmental effects may be associated with CWI S operations at regulated facilities. Many facilities employ

once - through cooling water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 78 of 567 sy stems that impinge fishes and other aquatic organisms on intake screens. Impinged organisms may

be killed, injured , or weakened. Inadditio n, earl y life stage fish or planktonic organisms can be entrained b y the CWIS and subjected to high velocity and pressure, increased temperature, and chemical anti - biofouling agents in the sy stem. These factors are highl y lethal in most cases , as e arl y lif e stages of larvae are highly sensitive and very unlikel y to survive entrainment. Even if an organism is entrained as an egg and survives, its chances of surviving beyond the larvae stage are dramatically lower than eggs that were never entrained . Thus, un less measures to protect larvae are in place, egg survival does not indicate that adverse environmental impacts have been avoided. Consistent with its treatment of entrainment in past 316(b) rules, EPA assumes for the purposes of a national rule that 100 p ercent of entrai ned organisms suffer mortality . The effects of CWI S on aquatic habitats and biota in the waterbody do not occur in isolation from other ongoing ph ys ical, chemical, and biological stressors . Anthropogenic stressors may include: degraded water and sediment quality, low dissolved oxygen (DO) levels , eutrophication, fishing, channel or shoreline (habitat) modification (intake structure and other flood or storm controls) , hydrologic regime changes and invasive species. For example, many aquatic o rganisms subject to IM &E ( impingement mortality and entrainment) reside in impaired (i.e., CWA 303(d) listed) waterbodies. The effect s of anthropogenic stressors on biota may contribute to or compound the impact of IM &E , depending on the influence of location - specific factors. In addition to stressors acting on biota near a single CWI S, multiple CWI Ss and facilities located in close proximity on the same waterbody may have additive or cumulative*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 79 of 567 effects on aquatic communities. And, although it is difficult to measure, the compensatory

ability of an aquatic population, which is the capacity for a species to increase survival, growth, or reproduction rates in response to decreased population, is likely compromised b y IM&E and the cumulative impact of other stressors in the environment over extended periods of time. **B. Major Anthropogenic Stressors in Aquatic Ecosystems**  All ecosy stems and their biota are subject to natural variability in environmental conditions (e.g., season al cycles, foliage presence) as well as periodic large - scale disturbances (e.g., drought, flood, fire). In contrast , anthropogenic stressors tend to be more chronic in nature and can often lead to long - term environmental degradation associated with decreas ed biodiversity , reduced primary and secondary

production, and a lowered ecos ys tem resiliency (i.e., ability

of the ecosy stem to recover to its original state from perturbations ). 24 Several of the more important anthropogenic stressors are discussed below, with CWI S - related impacts considered as a separate category of stress. 1. Habitat L oss Structural aquatic habitat is generall y recognized as the most significant determinant of the nature and composition of aquatic communities. Most 316(b) facilities have been built on shoreline locations where industrial buildings, roadway s, canals, impoundments, and other water storage or conveyance structures have been constructed

24 Rapport, D. J., & Whitford, W. G. (1999). How Ecosystems Respond to Stress. BioScienc e, 49(3), 193 - 203. See DCN 10 - 4871.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 80 of 567 at the cost of terrestrial, aquatic, and wetland habitats. The main impact s of aquatic habitat loss are a reduction in the number of fish in the environment, a concentration of fishery spawning and nursery

areas in fewer locations, shifts in species dominance ba sed on available habitat and local extirpation of historical fish species. Habitat loss in shoreline areas exacerbates the effect of CWI S losses because many fish species affected by IM&E rel y heavil y on coastal wetlands as nursery areas. 2. Water Quality and Impaired Waters Poor water quality is a major stressor of aquatic biota and habitats. Degraded surface water and sediment contaminants reflect both current and past industrial, agricultural and urban land use and disposal practices. Poor water quality can limit the number s, composition, and distribution of fish and invertebrates; reduce spawning effort and growth rates; select for pollution - tolerant species; cause periodic fishkills; or result in adverse bioaccumulative e ffects to piscivorous wildlife. EPA has determined that the majority of surveyed facilities, including 71 percent of electric generators and 79 percent of sampled manufacturing facilities, are within two miles of an impaired (i.e., CWA s ection 303(d) - listed) waterbody . 25 These impairments are caused b y a variety of chemical, ph ys ical, and biological factors . These factors includ e biolo gical stressors, nutrients, organic enrichment/loading, bioaccumulation, toxics, unknown causes, and other forms of anthropogenic sources of pollution (e.g.,

25 Abt Associates, Inc. (20 10 ). Source Water Body Comparisons (Under Work Assignment 2 - 09, Task 4) (pp. 13) . Cambridge, MA . See DCN 10 - 4504.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 81 of 567 atmospheric deposition of mercury leading to fish advisories) . The combined impacts of impaired water quality

may result in highl y degraded or altered aquatic communities that are further impaired b y IM&E associated with the ope ration of regulated facilities. 3. Overharvesting Overharvesting is a general term describ ing the exploitation of an aquatic p opulation beyond a level that is sustainable, sometimes to the point of significantly reducing the population relative to historic levels . Given that many fisheries regulated b y the National Marine Fisheries Service (NMFS) are overfished on a continual bas is, overharvesting is a particular problem for stocks also subject to IM &E. 4. Invasive Species Non - indigenous invasive species (NI S) are a significant and increasingl y prevalent stressor in both freshwater and marine environments. Approximately 300 NI S have become established in marine and estuarine habitats of the continental U.S., and the number of NIS continues to increase. Many NIS are nuisance species with undesirable effects on local communities. 26 For example, interactions between NIS and other anthropogenic stressors can affect the colonization and distribution of native s pecies subject to CWI S impacts.

26 Ruiz, G. M., Fofonoff, P. W., Carlton, J. T., Wonham, M. J., & Hines, A. H. (2 000). Invasion of Coastal Marine Communities in North America: Apparent Patterns, Processes, and Biases. Annual Review of Ecology & Systematics, 31, 481 - 531. See DCN 10 - 4880.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 82 of 567 **C. Effects**  **of CWIS on Aquatic Ecosystems** The magnitude and regional importance of IM&E is a function of operational CWI S intake volumes and characteristics of the aquatic community in the region. Thus, for example, IM&E can contribute to impacts on threatened and endangered ( T&E ) species and reduc e populations of ecologicall y critical aquatic organisms , including important organisms in an ecos ys tem’s food web . In addition, IM &E may diminish the compensatory

reserves of populations and reduc e indigenous species populations, commercial fisheries, and recreational fisheries . Further, IM&E may stress overall communities and ecos ys tems, as evidenced b y reductions in diversity or other changes in ecos ys tem structure or function. The direct and indirect impacts of CWI S may reduce other valuable ecos ys tem goods and services, including nutrient cycling and ecos ys tem stability . 1. Losses of Fish f

rom Impingement Mortality and Entrainment The most visible direct impact s of IM&E are the loss es of large numbers of aquatic organisms, distributed non - uniformly among fish, benthic invertebrates, phy t oplankton, zooplankton, and other susceptible aquatic taxa (e.g., sea turtles). These losses have immediate and direct effects on the population size and age distribution of affected species, and may cascade through food webs. In some cases, IM&E has been shown to be a significant source of anthropogenic mortality of depleted stocks of commercially targeted species. For example , approximately 5.4 percent of the estimated A1E population of the Southern New England/Massachusetts stock of winter flounder (Pseudopleuronectes americanus ) is lost*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 83 of 567 to IM &E . 27 Inaddition to its effect on stocks of marine commercial fish species, IM&E increases the pressure on native freshwater species, such as lake whitefish ( Coregonus clupeaformi) an d yellow perch ( Perca flavescens ), whose populations have seen dramatic declines in recent years. 28 IM &E is also likel y to contribute to reduced population sizes of species targeted by commercial and recreational fishers, particularly for stocks that are be ing harvested at unsustainable levels and/or undergoing rebuilding. Thus, reducing IM&E may lead to more rapid stock recovery , a long - term increase in commercial fish catches, increased population stability

following periods of poor recruitment and, as a c onsequence of increased resource utilization, an increased ability to minimize the invasion of exotic species. 29 2. IM &E Effects on Threatened and Endangered S pecies Populations of T&E (threatened and endangered) species may suffer increased mortality as di rect or indirect consequences of IM&E. T&E species are vulnerable to future extinction or at risk of extinction in the near future and IM &E losses could either

27 N ortheast Fisheries Science Center (NEFSC) of the NOAA National Marine Fisheries Service. (2011). 52nd Northeast Regional Stock Assessment Workshop (52nd SAW): Assessment Summary Report. DCN 12 - 4940 . 28 U.S. Department of the Interior (USDOI). (200 4 ). Fisheries: Aquatic and Endangered Reso urces from http://www.glsc.usgs.gov/main.php?content=research_risk&title=Species%20at%20Risk0&menu=research [ Retrieved June 23, 2004 ]; Wisconsin Department of Natural Resources (Wisconsin DNR). (2003). Adrift on the sea of life. Wisconsin Natural Resources , June, 17 - 21 . See DCN 10 - 4914. 29 Stachowicz, J. J., & Byrnes, J. E. (2006). Species Diversity, invasion success, and ecosystem functioning: disentangling the influence of resource competition, facilitation, and extrinsic factors. Marine Ecology - Progress Series, 311, 251 - 262. See DCN 10 - 4892.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 84 of 567 lengthen population recovery time, hast en the demise of these species, or counteract the effects of other conservation efforts . For this reason, the population - level and societal values of T&E losses are likely to be considered more important than the absolute number of losses that occur. Due to low population sizes, I&E mortality from CWI Ss may repr esent a substantial portion of the annu al reproduction of T&E species. 3. Thermal Effects One b yproduct of once - through cooling water s ys tems is a discharge of a heated effluent. Concerns about the impacts of heated effluents are addressed b y state water quality standards addressing temperature , rather than a national rule. Section 316(a) of the Clean Water Act provides a mechanism for variances from controls that could be imposed due to thermal effects . Based on a limited review of NPDES permits , to the extent that facilities have controls on cooling water intake structures, these controls have been required to meet water quality standards related to temperature. 30 Thermal pollution has long been recognized as having multiple effects upon the structure and function of ecos ys tems. 31 Numerous studies have shown that thermal discharges may

substantially

alter the structure of the aquatic community by modifying

30 Abt Associates, Inc. (2010 ). Source Water Body Comparisons (Under Work Assignment 2 - 09, Task 4) (pp. 13) . Cambridge, MA . See DCN 10 - 4504. 31 Abt Associates, Inc. (2009). Summary of Ecological Effects of Thermal Disc harge (pp. 28). Cambridge, MA. See DCN 10 - 4505.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 85 of 567 photosy nthetic, metabolic, and growth rates 32 and reducing levels of DO. Thermal pollution may

also alter the location and timing of fish behavior s including spawning , aggregation, and migration, and may result in thermal shock - induced mortality for some species. 33 Adverse temperature effects are likel y to be more pronounced in aquatic ecos ys tems that are already subject to other environmental stressors such a s high biochemical ox ygen demand (BOD) levels, sediment contamination, and pathogens . Reduced waterbody volume due to the effects of climate change and/or lengthy droughts could exacerbate these effects . 4. Chemical Effects The release of chemicals in the discharge of once - through cooling waters is another environmental effect associated with industrial facility operations . These chemicals include metals from internal corrosion of pipes, valves and pumps (e.g., chromium, copper, iron, nickel, and zinc), additives (anti - corrosion and anti - scaling agents) and their b yp roducts, and materials from boiler blowdown and cleaning cycles. In addition to these pollutants, facilities also discharge anti - fouling biocide agents. A review of the effects of chem ical treatment and discharge into the environment suggests that direct ecotoxicity in discharge plumes is rarel y observed beyond the point

32 Martinez - Arroyo, A., Abundes, S., González, M. E., & Rosas, I. (2000). On the Influence of Hot - Water Discharges on Phytoplankton Communities from a Coastal Zone of the Gulf of Mexico. Water, Air & Soi l Pollution, 119(1 - 4), 209 - 230 . See DCN 10 - 4820. 33 Smythe, A. G., & Sawyko, P. M. (2000). Field and laboratory evaluations of the effects of 'cold shock' on fish resident in and around a thermal discharge: an overview. Environmental Science & Policy, 3( S 1), 225 - 232. See DCN 10 - 4887.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 86 of 567 of discharge or in a mixing zone near the pipe outlet. 34 However, the presence of these chemicals in the receiving wat er may be additive to low - level chronic adverse effects from other anthropogenic stressors identified above. 5. Effects of Flow Alteration The operation of CWI Ss and discharge returns significantly alter patterns of flow within receiving waters both in the immediate area of the CWI S intake and discharge pipe, and in mainstream waterbodies, particularl y in inland riverine settings. In ecos ys tems with strongl y delineated boundaries (i.e., rivers, lakes, enclosed bays, etc.), CWI Ss may

withdraw and subsequentl y return a substantial proportion of wat er available to the ecos ys tem. Even in situations when the volume of water downstream of regulated facilities changes relatively little, the flow characteristics of the waterbody, including turbulence and water velocity , may be si gnificantly altered. Altered flow velocities and turbulence may lead to several changes in the phy sical environment . These changes can includ e sediment deposition, sediment transport, and turbidity, each of which play s a role in th e ph ys ical structuring of ecosy stems. 35 F low velocity and turbulence are controlling b iological factors in aquatic ecos ys tem health , and

34 Taylor, C. J. L. (2006). The effects of biological fouling control at coastal and estuarine power stations. Marine Pollution Bulletin, 53(1 - 4), 30 - 48 . See DCN 10 - 4901. 35 Hoyal , , D. C. J. D., Atkinson, J. F., Depinto, J. V., & Taylor, S. W. (1995). The effect of turbulence on sediment deposition. Journal of Hydraulic Research, 33(3), 349 - 360 . See DCN 10 - 4797.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 87 of 567 hav e been shown to alter feeding rates, settlement and recruitment, bioturbation, growth and population dy

namics. 36 Climate change is predicted to have variable effects on future river flow in different regions of the United States . S ome rivers are expected to have large increases in flood flows while other basins will experience stress from low water levels . Thus, the adver se effects of flow alteration may increase or decrease over longer periods for larger rivers, depending on their location. **D. Community** **– level or Indirect Effects of CWIS**  In addition to the direct effects of CWI Ss, IM&E may alter a wide range of aquatic eco sy stem functions and se rvices at the community level. Many of these effects on aquatic community

function and service are poorly characterized, given the limited scope of IM &E studies and an incomplete knowledge of baseline or pre - operational conditions within affected waters. The operation of CWI Ss by facilities can lead to localized areas of depressed fish and shellfish abundance. Industrial facilities (and the intake volume they represent) are located in a non - uniform manner alon g coastlines and rivers . They may be clustered, such that the populations affect ed by IM&E are geographically heterogeneous. This can result in a highl y localized and patch y distribution of aquatic organisms in regional areas.

36 Sanford, E. B., Bertness, D., & M. D. Gaines, S. D. (1994). Flow , food supply and acorn barnacle population dynamics. Marine Ecolo gy Progress Series, 104, 49 - 62. See DCN 10 - 4882.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 88 of 567 IM &E may

directl y reduce species populations through the death of individual organisms, or may

indirectly

affect species populations by altering established predator prey relationships and thereb y disrupting ecological niches and food webs. For example, the loss of young - of

- ye ar p redators, such as striped bass, or loss of important forage fish, such as menhaden and bay anchov y, may affect trophic relationships and alter food webs . IM &E may

lead to reductions in local community biodiversity

or in a loss of genetic diversity in indiv idual fish populations. Because IM&E represents a selective pressure on earl y life stages, it may reduce the genetic diversity of resident fish and prevent the recovery of depleted stocks. 37 Also, b ecause many stocks are differentiated by oceanic region and

/or timing of migratory

movements, IM&E could alter the seasonal migration and life cycle events of fish populations, which could have rami fications for predator species. IM &E may

also alter the pace of nutrient cycling and energy transfer through food web s. Fish species have been shown to have substantial effects on nitrogen, phosphorous, and carbon cycling due to storage and translocation effects. 38 These alterations in nutrient cycling could lead to redirection of nutrient flows to other components of the ecosystem including water column phy toplankton, benthic macroalgae

37 Swain, D. P., Sinclair, A. F., & Mark Hanson, J. (2007). Evolutionary response to size - selective mortality in an exploited fish population. Proceedings of the Royal Society B: Biological Scienc es, 274(1613), 1015 - 1022 . See DCN 10 - 4900. 38 Vanni, M. J., Layne, C. D., & Arnott, S. E. (1997). "Top - down" trophic interactions in lakes: effects of fish on nutrient dynamics. Ecology, 78(1), 1 - 20. See DCN 12 - 5047 .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 89 of 567 an d attached epiph yt es, with subsequent changes to the condition of critical ecosy stem habitats, such as submerge d aquatic vegetation. The effect of long - term or chronic IM&E may lead to a decrease in ecos ys tem resistance and resilience 39 (i.e., ability to re sist and recover from disturbance , including invasive species). That is, IM&E is likel y to reduce the ability of ecos ys tems to withstand and recover from these ecosy stem damages , whether those impacts are due to anthropogenic effects or natural variability . **E. Cumulative**  **Effects of Multiple Facilities**  Cumulative effects of CWI Ss are likel y to occur if multiple facilities are located in close proximity and impinge or entrain aquatic organisms within the same source waterbody, watershed system, or along a migratory pathway of a specific species (e.g., striped bass in the Hudson River). EPA anal ys es show more than 20 percent of all facilities on inland waters withdraw more than 5 percent of the m e an annual flow . 40 See TDD Chapter 4.1.3 for detailed discussion. This impact is compounded because more than half of all regulated facilities are located on waterbodies with multiple CWI Ss . An inspection of the geographic locations of regulated facilities (approximated by CWI S

39 Folke, C., Carpenter, S., Walker, B., Scheffer, M., Elmqvist, T., Gunderson, L., & Holling, C. S. (2004). Regime Shifts, Resilience, and Biodiversity in Ecosystem Management. . . Annual Review of Ecology, Evolution, & S ystematics, 35(1), 557 - 581 . See DCN 10 - 4770. 40 As described in the Phase I proposed rule (65 FR 49060) and the Phase II NODA (66 FR 28853), absent any other controls, withdrawal of a unit volume of water from a waterbody will result in the entrainment of an equivalent unit of aquatic life (such as eggs and larval organisms) suspe nded in that volume of the water column. Thus, facilities withdrawing greater than 5 percent of the mean annual flow from freshwater rivers and streams may entrain equal proportions of aquatic organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 90 of 567 latitude and longitude) shows that facilities in inland settings are more likely to be located in close proximity to other facilities (upstream or downstream) than are facilities in marine and estuarine environments. The cumulative impact of clustered facilities may be significant, due to the concentrated IM&E, combined intake flows, and the potential for other impacts such as thermal discharges. **I V.**  **Summary Description of the Final Rule**  Under today ’s final rule, the owners or operators of existing facilities and new units at existing facilities are subject to BTA standards for impingement mortality and entrainment that are expected to substantially reduce the adverse environmental impacts of cooling water intake structures . Earlier, in Section I , the preamble describes what facilities are subject to the rule. The discussion below presents an overview of the substantive requirements of the rule. **A. BTA Standard for Impingement Mortality**  **for Existing Units at Existing**  **Facil iti**  **es** The final rule requires that existing facilities subject to this rule must comply with one of the following seven alter natives identified in the n ational BTA standard for impingement mortality

at § 125.94(c) (hereafter, impingement mortality standard s ) : (1) operate a closed - cycle recirculating s ys tem as defined at § 125.92 ; ( 2) operate a cooling water intake structure that has a maximum through - screen design intake velocity of 0.5 fps ;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 91 of 567 (3) operate a cooling water intake structure that has a maximum through - screen intake velocity of 0.5 fps ; (4) operate an offshore velocity cap a s defined at § 125.92 that is installed before **[ INSERT**  **effective date of rule]** ; (5) operate a modified traveling screen 41 that the Director determines meets the definition at § 125.9 2 (s) and that the Director determines is the best technology availab le for impingement reduction ; (6) operate any other combination of technologies, management practices and operational measures that the Director determines is the best technology available for impingement reduction; or (7) achieve the specified impingement mortality performance standard. Options (1) , (2) and (4) above are essentiall y pre - approved technologies requiring no demonstration or only a minimal demonstration that the flow reduction and control measures are functioning as EPA envisioned. Options (3 ), (5) and (6) require more detailed information be submitted to the Director before the Director may specify it as the requirement to control impingement mortality .

41 EPA is aware that innovative screen designs are c urrently being tested that are expected to provide similar or better performance than modified Ristroph traveling screems . T herefore EPA has defined mo dified traveling screen at 40 CFR 125.92 to mean any traveling water screen that incorporates the specifi ed measures that are protective of fish and shellfish. In this preamble, modified traveling water screen with a fish handling and return system is often referred to more simply a modified traveling screen.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 92 of 567 In the case of Option (3), which EPA considers to be a streamlined alternative, the fac ility

must submit information to the Director that demonstrates that the maximum intake velocity as water passes through the structural components of a screen measured perpendicular to the screen mesh does not exceed 0.5 feet per second. In the case of Op tion (5), the facility must submit a site - specific impingement technology

performance optimization study that must include two years of biological sampling demonstrating that the operation of the modified traveling screens has been optimized to minimize impingement mortality . As discussed below, if the facility does not already have this technology installed and choose s this option, the Director may postpone this study

till the screens are installed (see VI.G.1.d below). In the case of Option (6), the faci lity must submit a site - specific impingement study including two ye ars of biological data collection demonstrating that the operation of the sy stem of technologies, operational measures and best management practices has been optimized to minimize impingement mortality . If this demonstration relies in part on a credit for reductions in the rate of impingement already achieved b y measures taken at the facility , an estimate of those reductions and any relevant supporting documentation must be submitt ed. The estimated reductions in rate of impingement must be based on a comparison of the sy stem to a once - through cooling s ys tem with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source water body . The impingement mortality performance standard in (7) requires that a facility must achieve a 12 - month impingement mortality performance of all life stages of fish and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 93 of 567 shellfish of no more than 24 percent mortality , including latent mortality , for all non fragile species that are collected or retained in a sieve with maximum opening dimension of 0.56 inches 42 and kept for a holding period of 18 to 96 hours. The Director may , however, prescribe an alternative holding period . The 1 2 - month average of impingement mortality is calculated as the sum of total impingement mortality for the previous 12 months divided by

the sum of total impingement for the previous 12 months . A facility must choose to demonstrate compliance with this requirement for the entire facility, or for each individual cooling water intake structure . Biological monitoring must be completed at a minimum frequency of monthly . The owner or operator of an existing facility must meet the impingement mortality requirements as soon as practica b l e after issuance of a final permit establishing the entrainment requirements under § 125.94(d). Today ’s final rule also allows the Director, based on review of site - specific data , to conclude that a de minimis rate of impingement exists and therefore no additional controls are warranted to meet the BTA impingement mortality standard. In addition, today ’s final rule allows the D irector flexibility in determining appropriate site - sp ecific controls that may

be less stringent than those found at § 125.94(c)(1) to (7) for existing units at existing facilities operating with a capacity utilization of less than 8 percent

42 Though less common, the EPA recognizes that 1⁄2 b y 1⁄4 inch mesh are used in some instances and perform comparably to the 3/8 inch square mesh. Therefore, today’s rule allows for facilities to apply a 1⁄2 by 1⁄4 inch sieve (diagonal opening of 0.56 inches) or a 3/8 inch sieve (diagonal opening of 0.53 inches) when discerning between impinged and entrained organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 94 of 567 averaged over a 24 - month block contiguous period . This provision can be found at § 125.94(c)( 12 ). EPA no tes that these provisions for impingement mortality would not apply to entrainment because, as discussed in the next section, the requirements for entrainment are established by the Director on a site - specific basis. **B. BTA Standard for Entrainment**  **for Existing Units at Existing Facilities**  The final rule establishes the n ational BTA standard for entrainment at existing units at existing facilities at § 125.94(d) (hereafter, entrainment standard s ) . For such units , the rule does not prescribe a single nationally applicable entrainment performance standard but instead requires that the Director must establish the BTA entrainment requirement for a facility on a site - specific basis. The requirements must reflect the Director’s determination of the maximum reduction in entrainment warranted after consideration of all factors relevant to the BTA determination at the site and must include consideration of the specific factors spelled out in § 125.98 (f ) (2 ) . Facilities that withdraw greater than 125 mgd AIF must develop and submit an Entrainment Characterization Study (§ 122.21(r)(9 ) ) , as well as provide other information re quired at § 122.21(r)(7) and (10), ( 11), ( 12 ) and (13) that must include specified data pertinent to consideration of several of the factors identified in § 125.98(f). **C. BTA Standards for Impingement**  **Mortality and Entrainment for New Units**  **at Existing Facilities** The owner or operator of a new unit at an existing facility must achieve one of two compliance alternative s under the national BTA standards for impingement mortality and entrainment for new units at e xisting facilities at § 125.94(e) (hereafter,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 95 of 567 new unit standard s) . 43 Under the new unit standard s , the owner or operator of a facility must reduce AIF at the new unit, at a minimum, to a level commensurate with that which can be attained b y the use of a closed - cycle recirculating s ys tem as defined at § 125.92(c)(1) . The owner or operator of a facility with a cooling water intake structure that supplies coolin g water exclusively for operation of a wet or dry cooling tower(s) and that meets the definition of closed - cycle recirculating sy stem at § 125.92 (c)(1) meets this new unit standard. Under the alternative new unit st andard, the owner or operator of a facility must demonstrate to the Director that it has installed, and will operate and maintain, technologi cal or other control measures that reduce the level of adverse environmental impact from any cooling water intake structure used to supply cooling water to the new unit to a comparable level to that which would be achieved through flow reductions commensurate with the use of a closed - cycle recirculating s ys tem . Under this alternative , the owner or operator of a facility must demonstrate entrainment mortality reductions that are equivalent to 90 percent or greater of the reduction that could be achieved through compliance with the first alternative entrainment standard for new units. The new unit entrainment standards do not apply to certain water withdr awals including (1) cooling water used b y manufacturing facilities for contact cool ing purposes; ( 2 ) portions of those water withdrawals for auxiliary cooling uses totaling less th an 2

43 EPA expects that all ne w units will comply with these requirements through the installation of a closed cycle cooling system, which is one of the mo st effective technologies for reducing impingement and im pingement mo rtality. Therefore, the IM requirements for new units are already addressed by the new unit requirements by virtue of the first compliance alternative of the IM performance standard.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 96 of 567 mgd; ( 3 ) any

volume of cooling water withdrawals used exclusively for make - up water at existing closed - cycle recirculating s ys tems; 44 and ( 4 ) any quantity of emergency

back - up water flows. Furthermore, as is the case for existing units, obtaining cooling water from a public water s ys tem, using reclaimed water from wastewater treatment plants, or desalination plants, or using recycled process wastewater effluent as cooling water does not constitute use of a cooling water intake structure. The new unit requirements apply only to the volume of cooling water used b y the new unit, or to the cooling water intake structures used b y the new unit. The new uni t requirements do not apply to the rest of the existing facility . In addition, the Director may establish alternative entrainment requirements for new units when compliance with the new unit entrainment standards would result in compliance costs wholl y out of proportion to the costs EPA considered in establishing the requirements at issue or will result in significant adverse impacts on local air quality , significant adverse impacts on local water resources other than impingem ent or entrainment, adverse impacts on threatened and endangered species, or significant adverse impacts on local energy markets. Any

Director - specified alternative must achieve a level of performance as close as practicable to the requirements of § 125.94 ( e )(1) or (2).

44 For facilities with a combination of closed - cycle recirculating systems and other cooling water systems , the entrainment mortality standard does not apply to that portion of cooling water withdrawn as make - up water for the closed - cycle recirculating system*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 97 of 567 **D .**  **Other Provisions** The final rule contains a number of other provisions related to the BTA impingement and entrainment reduction requirements. For example, the rule also provides that the Director may establish more stringent requirements as BTA if the Director determines that the facility owner or operator’s compliance with the requirements otherwise established under the final rule would not meet the requirements of applicable State and Tribal law, including water quality standards . 40 CFR § 1 25.9 4(i) . Today ’s rule also requires the owner or operator of a facility subject to this subpart to submit and retain permit application and supporting information as specif ied in § 125.95; monitor for compliance as specified in § 125.96; and report information and data and keep records as specified in § 125.97. Director requirements are specified in § 125.98. Th e rule further provides that, in the case of a nuclear facility or a facility constructing or conducting maintenance on nuclear powered vessels of the Armed Services , if the owner or operator of the f acility demonstrates to the Director, upon the Director’s consultation with the Nuclear Regulatory Commission , the Department of Energy or the Naval Nuclear Propulsion Program , that compliance with this subpart would result in a conflict with a safety requirement established by the se entities , the Director must establish BTA requirements that would not result in a conflict with the Commission’s , the Department’s or the Naval Nuclear Propulsion Program’s safety requirement.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 98 of 567 **V. Summary of**  **Data Updates and Revisions to the Proposed Rule**  This description of revisions to the proposed rule is organized in three sections: data updates, regulatory

approach and compliance, and new units. EPA published two NODAs (N otice of D ata Availability) (77 FR 34315, June 11, 2012 and 77 FR 34927, June 12, 2012) based on some comments received on the proposed rule and additional anal ys es. EPA also took public comment on the information in these notices. **A. Data Updates**  On the basis of comments received, additional information made available, and further anal ys es, EPA revised a number of assumptions used in its assessments for the final rule. These included revisions to the engineering costs of options considered in development of the final rule , the information collection costs, the economic anal ys es, and the benefits anal ys es. The revised anal ys es, along with an explanation of how they affected decision making for this final rule , are discussed below . 1. Impingement Data and Performance Standard Since publishing the proposal, EPA received a substantial number of comments stating the amount of data to develop the proposed impingement mortality performance standard was too limited . EPA received more than 80 additional documents containing impingement and entrainment data . EPA reviewed these materials and found that m any documents did not provide useful data. For example, i n some cases, a document did not provide useful information because the only data available were the facility name and raw sampling data for a number of different species of fish or shellfish , or both. Ino ther case s , the documents focused on source water characterization data alone . However,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 99 of 567 after review, EPA identified more than 40 distinct sets of additional impingement sampling and performance data. EPA also reevaluated and revised the criteria it used for including impingement mortality study data in the impingement mortality performance standard calculations . In calculating the impingement mortality performance standard of § 125.94( c )( 7 ), EPA applied these revised criteria for acceptable data to both the new data and the earlier data used for proposal. EPA ’s approach for the final rule is similar to that of the proposal. In order to include data in EPA’s calculation, for the proposal, EPA applied the following four criteria. First, the data must be specific to the technology under consideration . Second, i mpingement mortality must have been reported as an absolute number or a percentage of impinged fish that were killed . Third, the data must reflect that the installed technolo gy

was operated under conditions that are representative of actual conditions at a facility , and fourth, the reported values must be actual measurements. EPA based the proposed performance standard on the performance of modified traveling screens with a fi sh return s ys tem using a limited definition of th e control technology . In its reevaluation and based on comments , EPA decided to revise some of the criteria and add two new ones. In some cases, the effect of these changes is to relax the criteria and in others, to impose more restricti ve criteria . First, all impingement data must be for non - fragile species (including shellfish) . Second, the data must be representative of annual mortality

data for purposes of deriving an annual performance standard . EPA notes that in contrast to the proposed rule, the permit application does not require submission of the proposed list of “species of concern.” EPA found that the term “species*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 100 of 567 of concern” was similar to term s used in the context of T&E (threatened and endangered) species, and may

further cause confusion over existing Services or State requirements for such species. Further, despite EPA’s efforts to distinguish between species of concern and RI S (representative indicator species) in the NODA (77 FR 34325 , June 11, 2012 ), EPA found that many

commenters were still confused by the language. Instead, EPA is adopting the term “fragile species” and using the term exactly as it is used with the impingement mortality

data and criteria used in calculating the impin gement mortality performance standard of the rule. EPA included a definition for “fragile species” at § 125.92 (m) , as a species of fish or shellfish that has an impingement survival rate of less than 30 percent. EPA took this approach to ensure that a fac ility ’s performance in reducing impingement mortality as demonstrated by collecting biological data would reflect only

the effects of its improvements to the CWI S technology , and not be confounded b y effects of data collection that are not caused by impingement. EPA also relaxed the holding time criteria as a result of reevaluating the range of acceptable impingement mortality holding times, which at proposal was limited to 24 to 48 hours. After evaluating the data, EPA concluded that a range of holding times of 18 to 96 hours was acceptable for inclusion in the development of a performance standard because commenters had provided documentation showing that the actual time period ty picall y had little effect on IM rates. At proposal, EPA counted all fish that died at any time during the holding period . For the final rule being promulgated today , EPA excludes those that were dead at time zero because such counts measured immediate deaths and not those organisms that were mortally harmed as a result of impingement. The se counts*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 101 of 567 also might reflect already injured, nearl y dead, or already dead fish (“naturally moribund”) that were impinged b y the screen . As a consequence of relaxing the holding times and other requirements, EPA based the performance standard on a larger set of data, with broader geographic representation. (For more information, see DCN 12 - 6703 .) The ratio nale for these revisions to the data acceptance criteria are described in further detail in the TDD , Chapter 11. Using the revised criteria, EPA reviewed the data in each of the impingement mortality studies for potential inclusion in EPA’s evaluation of an impingement mortality performance standard . These changes resulted in an increase in the number of facility

data sets acceptable for determining the impingement mortality performance standard, from four data sets at three facilities at proposal to 26 dat a sets at 17 facilities today . As a result, the 12 - month average impingement mortality performance standard of all life stages of fish and shellfish was revised from no more than 12 percent to no more than 24 percent mortality, including latent mortality , for each non - fragile species that is collected or retained in a sieve with maximum opening dimension of 0.56 inches and kept for a holding period of 18 to 96 hours. The revised performance standard and data evaluation criteria are discussed in d etail in S ection V I and Chapter 11 of the TDD. EPA also reevaluated its approach to compliance monitoring for the impingement mortality performance standard . In particular, EPA considered the costs and burden of frequent biological monitoring for those technologies that, according to EPA’s record, perform equal to or better than the IM performance standard . As proposed, all facilities would have conducted weekl y biological monitoring in perpetuity irrespective of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 102 of 567 compliance approach or technologies selected. EPA a grees with comments that this may be unnecessaril y burdensome and of limited value for those technologies for which the potential performance is well documented. As such, today ’s final rule includes seven compliance alternatives, only one of which requir es biological compliance monitoring . EPA notes, however, that a facility rel yi ng in part on a credit for reductions in impingement mortality

already obtained at the facility

( § 125.94(c)(6 )) must gather biological data at a minimum frequency of monthly

for a period of two years in order to calculate their 12 - month average impingement mortality . Further, a facility choosing to comply using the impingement mortality performance standard ( § 125.94(c)(7)), must conduct biological monitoring at a frequency of at least monthly

in order to calculate it s 12 - month average impingement mortality . The 12 - month average is calculated as the sum of total impingement mortality for the previous 12 months divided by the sum of total impingement for the previous 12 months. EPA is requiring that a facility cho ose to either demonstrate compliance with this requirement for the entire facility , or for each individual cooling water intake structure. The EPA expects that as the performance of the technology

is demonstrated by

the facility , the Director could reduce the frequency of biological compliance monitoring. Further, prior to a subsequent permit application, a facility could collect sufficient performance data to demonstrate to the satisfaction of the Director that its “s ys tems of technologies” compliance alternative is BTA at that facility . 2. Technology

Costs Since publishing the proposal, EPA received a number of public comments from industry stating that EPA had underestimated the costs of modified traveling screens with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 103 of 567 fish returns. EPA used new information to revise the compliance cost estimates (including the methodology used for technology

assignment) and the capital costs for several compliance technologies, including those used as the primary basis for the final rule. Those changes include the following:

 In response to comments challenging EPA’s assumpt ion that modified traveling screens were available at most facilities, EPA changed the assignment of the modified traveling cost module 45 so as to apply this only where the existing intake for the model facility

intake employed traveling screens. As a resul t, a number of intakes, such as those that use passive screens (e.g., fixed screens), were assigned higher cost technologies such as larger intakes or wedgewire screens with through - screen design velocities of 0.5 fps.

 Because EPA has clarified that properl y operated closed - cycle recirculating sy stems is one of the compliance alternatives for impingement mortality , those intakes with existing closed - cycle cooling no longer receive additional impingement technology

costs.  At proposal, the design of the larger intake module was based on a through - screen velocity of 1.0 fps and, therefore, was not consistent with the low velocity compliance alternatives . To ensure that this technology wil l be consistent at all

45 EPA used a model facility approach to develop compliance technology costs where different sets of compliance technology cost algorithms called modules were assigned to individual model facility intakes on the basis of site - specific conditions. For a more detailed discussion, see the TDD Chapter 8.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 104 of 567 locations, the through - screen design velocity for the larger intake was changed to a maximum of 0.5 fps, resulting in a substantial increase in capital and operational and maintenance costs.

 EPA received a number of comments noting that fish returns might be difficult to install at some intakes. EPA reviewed the fish return cost component of the modified traveling screen module and concluded that EPA’s costs represented an “eas y” installation rather than an average of both easy and mo re difficult installation cost s. To account for a wider range of fish return costs that includes those with higher costs, EPA increased the capital costs of the fish return component and included additional costs for those with particularl y difficult circumstances such as very long intake canals and submerged offshore intakes. For a detailed discussion, see Chapter 8 of the TDD.

 EPA received a number of comments stating that it had underestimated capital costs for modified traveling screens. During site vis its to several facilities, EPA obtained actual traveling screen replacement costs. EPA compared its estimates to actual reported replacement costs and vendor - supplied data and concluded that the capital costs were underestimated by about 20 percent. Theref ore, EPA increased the capital costs of modified traveling screens b y 20 percent. These changes to the engineering costs result in a 24 percent increase in capital and O&M costs. The revised costing assumptions are discussed in further detail in Chapter 8 of the TDD.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 105 of 567 3. Monitoring Costs f or Impingement Mortality Many commenters expressed concern that requirements for monitoring for the impingement mortality

performance standard were excessive. Of particular concern were the long - term costs for impingement mortality monitoring at facilities that would be relying on either closed - cycle cooling or an intake velocity less than or equal to 0 .5 fps through - screen design velocity . The final rule includes seven compliance alternatives for the impingement standard. One of these alternative provides for reduced monitoring requirements for facilities employing modified traveling screens. This alternative is available if the facility

has demonstrated the technology is optimized to minimize impingement mortality

of all non - fragile species . Under this approach, EPA requires the facility to provide site - specific performance data to identify the operational conditions that will ensure that the technolo gy is being operated optimally . Once these operational conditions have been identified, the Director must include in the permit those operational measures and best management practices identified in the study and deemed as necessary by the Director to ensure proper operation of the modified traveling screens. EPA also clarified in the rule that compliance monitoring and reporting requirements for facilities that comply

with the impingement mortality standard by employing one of the pre approved or streamlined IM compliance alternative s w ill be largel y limited to information that ensures proper operation of the installed control technology . EPA estimates that this alternative approach will reduce annual monitoring and reporting costs from approximately

$47 million under the proposed rule to approximately $27 million under the final rule .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 106 of 567 4. Benefits and Willingness to Pay Survey EPA received a number of comments on the proposed rule and NODA addressing the use of stated preference survey s to determine the public’s willingness - to - pay for benefits associated with the rule . EPA conducted a stated preference survey to calculate benefi ts associated with minimizing adverse impacts to aquatic ecos ys tems from cooling water intakes . For some commenters, the use of stated preference survey s to evaluate benefits remains controversial, and they objected to using such survey s . Other commenters acknowledge the decades of technical development and improvement of these methods and support using stated preference survey s . Based on consideration of public comment, EPA decided not to employ the survey

results for purposes of decision making in this rule , or include them in assessing the total benefits of the rule . The rule does not require S tate Directors to require facility owners or operators to conduct or submit a willingness to pay survey to assess benefits. **B. Regulatory Approach**  **and Compliance** 1. Regulatory

Approach EPA has largel y adopted the regulatory approach of the proposed rule with several changes regarding compliance, particularly with respect to the impingement mortality requirements . These changes clarify elements of the rule (as discussed in the NODAs) about which commenters expressed uncertainty and provide additional flexibility to regulated facilities in meeting the rule’s impingement mortality standard. EPA received some comments questioning whether specific provisions apply to the entire facility

or to individual intakes. To clarif y this issue, EPA modified the rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 107 of 567 language s o as to state clearl y that a facility with multiple intakes must decide whether it will adopt a single compliance strategy for impingement mortality for the entire facility or adopt an intake - specific compliance strategy at each cooling water intake. Thus, facilities may select different compliance strategies for different intakes, providing flexibility at facilities with multiple intakes . Regardless of which imping e ment compliance approach a facility chooses (single strategy

for entire facility

or different strategies for different intakes), if the facil i ty chooses to comply with the impingement standard by

operating at a maxi mum through - screen velocity of 0.5 feet per second, the facility must measure and comply with the low velocity compliance alternative of 0 .5 fps on an individual intake basis . a. Impingement Mortality Standards EPA received a substantial number of comments requesting greater flexibility and clarification regarding compliance with the impingement mortality standards , including suggestions that (1) impingement requirements be addressed on a site - specific basis; (2) certain technologies should be pre - approved; (3) credit should be given for existing technologies and operating conditions; and (4) combinations of technologies be allowed. EPA has concluded that low - cost technologies for impingement mortality reduction are effective, widel y available, feasible, and demonstrated for facilities natio nally and thus, a completely site - specific approach is not appropriate . However, recognizing that for some sites technologies other than modified traveling sc reens may allow a facility

to achieve the same level of performance , EPA has included compliance options that provide for more flexibility

and allow consideration of the performance of combinations of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 108 of 567 technologies and operating conditions. Some of the more significant changes include the following:

 Compliant technologies

—EPA has concluded that employing certain technologies will meet or exceed the requirement of the impingement mortality standard, provided they

meet certain d esign and operational criteria. These pre - approved and streamlined technologies include a closed - cycle recirculating s ys tem , existing offshore velocity

cap, and maximum design intake velocity of 0.5 fps . Associated with these compliance options are reduced monitoring requirements. o Closed

- Cycle Cooling

—EPA has concluded that a fully closed - cycle recirculating s ys tem as defined at § 125.92 (c) (and that is properly operated and maintained) achieve s the impingement mortality performance standard . Even after retrofitting a facility to be closed - cycle, it may still be possible to withdraw and discharge cooling water at rates associated with once - through cooling. Existing facilities that re trofit to closed - cycle cooling often do so without modifying or replacing their condenser to optimize it for closed - cycle operation. In such cases, the facility has an incentive to operate its sy stem in a once - through cooling mode , to minimize chemical cos ts or avoid a turbine backpressure constraint. EPA has conclud ed that it is not appropriate to add conditions to the definition of closed - cycle cooling because water may be withdrawn for purposes of replenishing losses to a closed - cycle recirculating s ys tem other than those due to blowdown, drift, and evaporation from the cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 109 of 567 sy stem . However, the final rule provides the Director the discretion to determine whether the operation of a cooling s ys tem minimizes th e make up and blowdown flows withdrawn, consistent with the definition of a closed - cycle recirculating s ys tem (40 CFR 125.92(c)). o Existing Offshore Velocity Caps

—The record indicates that an existing offshore velocity

cap as defined at § 125.92 (v) also achieves the necessary reductions in impingement mortality and thus meets the IM standard . Data in the record concerning existing velocity caps show that a velocity cap alone is insufficient, but data on existing offshore velocity caps shows th at a velocity cap in combination with their current offshore locations meet EPA’s BTA standard for impingement mortality . EPA has determined that new offshore velocity caps could comply using the combination of technolo gi es approach in § 125.94(c)(6). The offshore component likel y makes the velocity cap technology unavailable except to facilities in marine waters and certain Great Lakes locations; therefore, the technology alone is not BTA. o Through - Screen Velocity

—EPA has clarified that co mpliance with a 0.5 fps intake velocity achieves the IM standards . EPA’s record shows an intake velocity of 0.5 fps or lower provides similar or greater reductions in impingement, and therefore impingement mortality , than modified traveling screens

– the technology forming the basis for the numeric impingement mortality performance standard that is the goal for all*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 110 of 567 facilities. There are two way s to demonstrate compliance using intake velocity . First, an intake with a maximum design intake velocity less than or equal to 0.5 fps is pre - approved BTA for impingement mortality and does not require f

urther monitoring. Alternativel y , under a stream lined option , the facility

may demonstrate to the Director that the facility meets the velocity

requirement through monitoring of the actual intake ve locity . Screen velocity

can be monitored by

direct measure ment or b y calculation using the volumetric actual intake flow and source water surface elevation.

 Modified Traveling Screens

— A facility must operate modified traveling screens 46 that the Director determines meets the definition at § 125.92 (s) . Facilities will demonstrate that they

have optimized performance of their traveling screen to minimize IM .  Systems of Technologies to Meet the IM Standard

—EPA received a substantial number of comments asking whether previously installed technologies or various combinations of technologies and operating conditions could also meet the BTA standard for impingement mortality . For example, some technologies, such as louvers, reduce the rate of impingement, but the effect on overall impingement mortality reduc tion cannot easily

be measured and would not appear in biological

46 While rotary screens are technically not modified traveling screens, the regulation at § 125.92 (s) defines mo dified traveling screens to include traveling water screens that incorporate measures protective of fish and shellfish. EPA has thus provided the flexibility for other ty pes of active screens that achieve the same or better performance than modified traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 111 of 567 sampling of the technology . In EPA’s view, th e Director should take into account the reduction in impingement

– for example, that associated with such technologies as louvers or behavioral deterrents, or due to intake location

– when determining permit conditions to include in the facility ’s permit in order for a combination of technologies to achieve the required impingement mortality standard s . Thus, the facility should obtain credit toward the impingement mortality standard for such reductions in the rate of impingement . A number of the flexibilities above were described in the June 11, 2012 NODA, and EPA has include d a provision to allow additional flexibility in achieving compliance through the use of a combination of technologies and operating conditions. A facility may use a s ys tem of technologies, management practices and operational measures to achieve the imping ement mortality standard, including, for example, flow reductions, seasonal operation, unit closures, credit for intake location, behavioral deterrent sy stems, and other technologies and operational measures. The Director must determine , based on a demonstration by the facility

to the Director , that the s ys tem of technologies or operational measures, in combination, have been optimized to minimize impingement mortality of all non - fragile species. The Director may require additional operational measures, bes t management practices, and monitoring as part of the demonstration. In addition, the facility ’s permit must include conditions to ensure that the facility operates its cooling water intake structures in a manner consistent with the conditions and measures identified in its demonstration to the Director.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 112 of 567  Numeric IM Performance Standard

— As a practical matter, EPA expects that very few facilities will choose to comply with the numeric impingement mortality performance standard. Those facilities that c hoose to comply in this way

will need to demonstrate to the Director how the technolog y the facility is implementing enables the facility

to meet the impingement mortality standard . The numeric standard provides a pathway to compliance for innovative technologies that may be developed in the future . EPA also received many comments stating that barrier nets were both unnecessary

and might be unavailable in many locations. Because EPA’s revised impingement data set had sufficient data to characterize shellfish impingement, EPA has eliminated the barrier net requirement in the final rule. See S ection VI for more information. b. Definition of Closed - Cycle Cooling Sy stem In the final rule, EPA revised the defini tion of a closed - cycle recirculating sy stem to provide additional flexibility for the Director in determining which closed - cycle cooling s ys tems compl y with the IM standards. The proposed rule ’s definition of “ closed cycle recirculating sy stems ” included, as elements of a properly operated closed - cycle sy stem performance, requirements generally expressed in terms of cycles of concentration (COC) or percentage flow reduction relative to a once - through cooling sy stem. Cycles of concentratio n represents the accumulation of dissolved minerals in the recirculated cooling water. Discharge of a portion of the water (called “blowdown”) is used to control the buildup of these minerals. COC is a measure of how concentrated are*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 113 of 567 chlorides in recirculated water relative to make - up water, and thus how well a sy stem recycles intake water before replacing it with new withdrawals. This is not to be confused with cycles of flow, as some commenters appeared to do . Cycles of concentration can be measured as the ratio of chloride levels in the recirculate d water or blowdown relative to the chloride levels in the source water , or makeup water . Some commenters stated that , while they have been operating as closed cycle units for many

years, they were con cerned that their facilities would not be “closed cycle recirculating s ys tems” under the proposed definition because they would not achieve the required COC. EPA has found the concentration cycles in the majority of cooling towers usually

range from 3 to 6 at power plants, and can often exceed 9 at manufacturing facilities. However, EPA recognizes that many manufacturers have complex water balances, and calculating a specific flow reduction attributable to cooling water use could be difficult and time consuming. In such cases, many manufacturers could far more readily

calculate the cycles of concentration of particular unit operations, and could therefore show those unit operations that use cooling water meet the conditions for closed - cycle cooling. EPA foun d in site visits many complex manufacturing facilities already have this capability , and have achieved very high COC. Li kewise, power plants may find it much easier to measure flow than cycles of concentration. Accordingl y, EPA’s proposed rule attempted t o recognize performance using either metric . EPA expects most power generators would use percentage flow reduction to demonstrate they are closed - cycle, and expects most manufacturing facilities would use COC for those units that utilize water for cooling purposes. Increasing the amount of minerals present in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 114 of 567 the water b y cycling can make water less aggressive to piping; however, EPA is also aware that excessive levels of minerals (such as found in certain source waters, most notably those with higher salin ity) can cause scaling problems , leading to different levels of both metrics for freshwater and saltwater facilities . EPA carefully

considered these issues and concluded that the most important aspect of the def

inition of a properly

operated closed - c ycl e cooling s ys tem is that the makeup flow be minimized. Thus EPA has removed the numeric levels of the metrics as a threshold, while retaining the minimized makeup flow aspect of the definition. As an example, in the case of a facility that uses make - up water from a freshwater source, a Director may

determine that a closed - cycle recirculating sy stem can generally be deemed to minimize make - up and blowdown flows if it reduces actual intake flows (AIF) by 97.5 percent as compared to a once - through cooling s ys tem or if its cooli ng tower is operated at a minimum cycles of concentration of 3.0. And likewise, i n the case of a facility that uses make - up water from a saltwater, brackish, or other source with a salinity of greater than 0.5 parts per thousand, a D irector may determine that a closed - cycle recirculating sy stem can generall y be deemed to minimize make - up and blowdown flows if it reduces actual intake flows (AIF) by 94.9 percent as compared to a once - through cooling s ys tem or if its cooling tower is operated at a minimum cycles of concentration of 1.5. These reductions and cycles of concentration are illustrative. A D irector may determine that other levels near these numbers could also constitute a closed - cycle reci rculating s ys tem . The final rule further recognizes that in certain unavoidable circumstances , these levels for COC or percent flow reduction might not be achievable at all facilities . Such*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 115 of 567 circumstances could include situations where water quality- based discharge limits might limit the concentration of a pollutant that is not readily treatable in the cooling tower blowdown or situations where varying source water quality could lead to unavoidable problems concerning scale formati on, solids buildup, corrosion, or media fouling. Such facilities should demonstrate these circumstances to their Dire ctor and indicate the measures they

have taken to minimize makeup flows . The Director will retain the discretion to conclude that the particular facility employ s a closed - cycle recirculating sy stem when the benchmarks are not met. In cases where the Director will make a determination as to whether the facility ’s cooling s ys tem meets the definition of a closed - cycle recirculating sy stem , EPA’s intent is that the withdrawal of small amounts of service water (for uses such as fire suppression, potable water, screenwash water, vehicle wash water, and such) do not preclude consideration of the sy stem as closed - cycle. To avoid misuse of this provision, the Director wi ll make the final determination. Finally , EPA data show more than 50 facilities have cooling s ys tems that include impoundments . In some cases, the cooling s ys tems that include impoundments were created in the waters of the U.S ., in whole or in part, or were created in uplands but withdraw make - up water from waters of the U.S . These cooling s ys tems may perform like a closed - cycle recirculating s ys tem. EPA has clarified at 40 CFR 125.92(c)(2) that a cooling s ys tem that includes an impoundment lawfully created in the waters of the U.S for the purpose of cooling may be considered a closed - cycle recirculating sy stem. As with other closed - cycle recirculating s ys tems, the Director will determine whether the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 116 of 567 impoundment minimizes the withdraw al of water for cooling purposes and therefore meets the definition of a closed - cyc le recirculating s ys tem. See S ection VI for further discussion. c. Entrapment The proposed rule included a prohibition on trapping organisms in an intake structure with no viable escape route. Many commenters expressed concern that the entrapment requirements were not well defined and would require costly technologies not considered in EPA’s cost estimates . Moreover, in the commenters’ view, the requirements could be difficult to comply with, particularl y where cooling systems employ impoundments or basins downstream of the initial intake structure. EPA agrees that in some cases, such as where a canal or basin for maintaining consistent water levels is located behind the CWIS, th at the proposed entrapment requirement could require additional controls such as additional fish returns that are not, in all cases, feasible. For example, EPA found in site visits that the forebay may be located more than a mile from the CWI S, and a fish return in that situation would not have been feasible. The final rule deleted the requirement that prohibited entrapment. In the final rule, facilities would account for all impinged fish and s hellfish when conducting their two ye ar performance study . To the extent entrapment of shellfish poses a concern, the Director may establish additional measures, such as seasonal deploy ment of barrier nets, under § 125.94(c)(8). d. Requirements for Threatened and Endangered Species EPA consulted with the Fish and Wildl ife Service and National Marine Fisheries Service and EPA made a number of adjustments to the rule to protect threatened and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 117 of 567 endangered species and designated critical habitat as a result of the consultation; the protections were included to insure that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modification of designated critical habitat . To be clear, the ESA provisions of the rule extend to all listed T&E species, not just fish and shellfish. See Section VIII.K for a summary of these provisions. 2. Compliance Timelines for Impingement Mortality and Entrainment Requirements At proposal, compliance deadlines for impingement mortality and entrainment requirements were set separate ly . Facilities would have been required to meet impingement mortality

reduction requirements as soon as possible , but no more than eight ye ars after the effective date of the rule. Compliance with entrainment reduction requirements would have been set b y the Director. Many commenters expressed concern that the compliance timeline for the impingement mortality and entrainment requirements should be harmonized to prevent a facility from having to install a technology to compl y with impingement mortality requirements, only to be required at a later date to install an entrainment reduction technology that effectively renders the investment in the impingement mort ality

te chnology

obsolete or worthless. EPA agrees that f

acilities required to install both impingement and entrainment compliance technologies will benefit from reduced compliance costs if the compliance scheduling is coordinated . EPA also agrees that requiring more timel y decisions on entrainment requirements than anticipated at proposal will facilitate these cost savings without sacrificing fish protection . In some cases, impingement compliance can be*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 118 of 567 attained with entrainment technologies. For example, the Director may determine that the installation of modified fine - mesh traveling screens and narrow - slot wedgewire screens will achieve the impingement mortality stan dard and further, that this same equipment represents, on a site - specific basis, BTA entrainment control. If the compliance schedule is not harmonized , it is possible that a facility could install (at significant cost) coarse mesh traveling screens that it might have to later retrofit with fine - mesh panels. It is also possible that a facility

could make modifications necessary to attain a 0.5 - fps through screen velocity to meet the IM standards and later have closed - cycle cooling identified as BTA for entrainment, thereby making the intake modifications for i mpingement control unnecessary . To address this issue in the final rule , EPA revised the compliance requirements so that the Director is required first to establish entrainment requirements under § 125.9 4(b)(1) in the final permit. The facility will then be required to comply with the impingement mortality

standard in § 125.94(c) as soon as practica b l e thereafter . See S ection VI I I on i mplementation for more detailed discussion . Because an entrainment requirement could require controls that take many ye ars to design, finance and construct, the Director may establish interim milestones related to meeting the final requirements to ensure that th e facility is making progress. **C. New Units**  EPA has revised the definition of new units to mean a stand - alone unit at an existing facility the construction of which is commenced after the effective date of today ’s final rule; consists of only a stand - alone unit constructed at an existing facility ;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 119 of 567 and that does not otherwise meet the definition of a new facility at § 125.83. A stand alone unit is a new, separate unit that is constructed at an existing facility . New unit includes stand - alone units that are added to a facility for purposes of the same general industrial operation as the existing facility . A new unit may have its own dedicated cooling water intake structure , or may use an existing or modified cooling water intake structure. **VI. Basis for the Final Regulation**  In response to the Suprem e Court’s decision in Entergy Corp. v. Riverkeeper, Inc. et al. in April 2009, EPA has reevaluated the requirements for existing facilities under CWA section 316(b). As discussed above, EPA collected additional data and information to update its assessment of the efficacy of various technological measures for reducing IM &E and anal ys es prepared for the earlier rule - making efforts. EPA’s additional technical rigor provided a strengthened anal ys is of different technologies for reducing IM and their effectiveness . As a result of its revised assessments and further consideration of the factors affecting the availability of different technology in a wide range of settings , EPA has decided not to re - promulgate requirements for existing facilities that mirror those of the final Phase II rule . Further , EPA is adopting, for the reasons explained in detail below , a new framework. In addition, as previously noted, EPA decided to address all existing facilities subject to section 316(b) in this rule (i.e., both those subject to the Phase II rule and some of those subject to the Phase III rule ). For a brief description of the final rule, see Section IV.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 120 of 567 **A. EPA’s Approach to BTA**  CWA section 316(b) requires EPA to establish standards for cooling water intake structures that reflect the “best technology available for minimizing adverse environmental impact.” As explained above, the statute is silent with respect to the factors that EPA should consider in determining BTA, but courts have held that section 316(b)’s reference to CWA sections 301 and 306 is an invitation for EPA to look to the factors 47 considered in those sections in establishin g standards for section 316(b). But EPA , when considering such factors, is not bound to evaluate the se in precisel y the same way it considers them in establishing effluent limitations guidelines under CWA section 304. As the Supreme Court noted , given the absence of any factors specified in section 316(b), EPA has much more discretion in its standard setting under section 316(b) than under the effluent guidelines provisions. Therefore, the statute vests EPA with broad discretion in determining what is the “best” technology that is

“ available ” for minimizin g adverse environmental impact. As the Supreme Court has further explained , under section 316(b), the “best” technology “available” may reflect a consideration of a number of factors and “best” does not necessarily mean the technology that achieves the greatest reduction in environmental harm that the regulated universe can

47 The factors specifically delineated in CWA sections 301 and 306 include cost of the technology, taking into account the age of the e quipment and facilities, process employed, engineering aspects associated with a particular technology, process changes and non - water quality environmental impact (including energy requirements).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 121 of 567 afford. Rather, the “best” (or “most advantageous,” in the court’s words) technology may represent a technology

th at most efficientl y produces the reductions in harm. EPA interpret s section 316(b) to require the Agency to establish a standard that will best minimize impingement and entrainment

—the main adverse effects of cooling water intake structures not otherwise addressed by the other sections of the CWA (e.g., thermal discharges ) . In EPA’s view, several important considerations underpin its decision. First, its BTA determination should be consistent with, and reflective of, the goals of CWA section 101: “to resto re and maintain the phy sical, chemical, and biological integrity of the Nation’s waters,” with the interim goal of “water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the w ater.” Second, E.O. 13563 directs EPA and other Federal agencies to identify and use the best, most innovative and least burdensome tools for achieving regulatory ends. In its regulatory

actions, agencies “ must take into account benefits and cost, both quantitative and qualitative, ” and to the extent permitted by law, only promulgate regulations that are based on “ a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify)” (see s ectio n 1(b)(1)). In selecting a regulatory

approach, agencies must tailor regulations to impose the least burden on society and, in choosing among regulatory alternatives, select “those approaches that maximize net benefits (in cluding potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity)” to the extent permitted by law . 76 F R 3821 ( January 21, 2011). B ecause the Supreme Court has concluded that the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 122 of 567 CWA authorizes EPA to consider costs and benefits in its BTA determination, EPA has consequentl y considered costs and benefits in this final rule as directed b y the President . In accord with E.O. 13563, EPA h as concluded that the benefits of the final rule justify its costs. For additional discussion, see S ection VI below. Con sideration of benefits is complicated by the debate about the tools and data that would permit a complete express ion of ecological benefits in monetized terms . EPA has, however, used the best available science regarding widely accepted tools and data to mo netize the benefits of the various options in four major categories: recreational fishing, commercial fishing, nonuse benefits, and benefits to threatened and endangered species (see S ection X below). EPA has concluded that the benefits estimated for the first two categories are generally complete, while the benefits estimated for the latter two categories are far from being complete for a number of reasons. For example, the nonuse benefits transfer was based on a species that represents less than one percent of adverse environmental impacts. EPA is continuing to refine its tools to develop a more complete anal ys is concerning benefits for future application. In selecting the “best” technology available for minimizing adverse environmental impact , EPA looked at a number of factors. As discussed previously , EPA’s initial approach to 316(b) standard setting wa s similar to one it follows in considering a technology - based rule under sections 301, 304, and 306. EPA first considered the availability and feasibility of various technologies , and then evaluated costs associated with these technologies (including potential costs to facilities and households), and the ir economic impacts . EPA also revi ewed the effectiveness of these*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 123 of 567 technologies in reducing impingement mortality and entrainment. Further, EPA also considered additional factors set out in CWA section 304(b), including location, age, size, and ty pe of facility . In addition, EPA considered the non - water quality environmental impacts of different technologies on energy production and avail ability , electricity reliability , and potential adverse environmental effects that could arise from the use of the different technologies evaluated. As a result of this thorough evaluation, in the case of the BTA s tandard for impingement mortality , EPA based the standard on performance of well - operated modified traveling screens with a fish handling and return s ys tem as defined more specificall y b y the rule . Under the BTA IM standard, a facility has a number of options for compliance . In the case of the BTA standard for entrainment, on the other hand, EPA could not identify

one technology

that represented BTA for existing facilities on a national basis . **B. Overview**  **of Final**  **Rule Requirements**  As noted, EPA concluded that the best technology available for minimizing impingement mortality

was “modified traveling screens,” as more specifically defined in the rule. The BTA Impingement Mortality Standard includes seven technology options for compl yi ng with the standard whose performance is equivalent to, or better performing than modified traveling screens. F irst, the rule identifies four technologies ( closed - cycle recirculating s ys tems , reduced design intake velocity , reduced actual intake velocity, and existing offshore velocity caps ) that reduce impingement mortality as well or better than*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 124 of 567 modified traveling screens , and therefore will generally comply with the BTA Impingement Mortality

Standard of today ’s final rule. The rule also provides that, if the Director determines that modified traveling screens are insufficient to protect shellfish, the Director may establish additional measures under § 125.94(c)(8) such as seasonal deploy ment of barri er nets, or if modified traveling screens 48 are insufficient to protect other species, the Director may establish additional protective measures under § 125.94(c)(9). In addition, the rule provides in 125.94(g) that the Director may establish additional control measures and monitoring or reporting requirements in the permit in order to protect Federall y- listed threatened and endangered species and designated critical habitat. The Director may include such conditions that are designed to minimize incidental t ake, reduce or remove more than minor detrimental effects to Federally- listed species and designated critical habitat or avoid jeopardizing Federally- listed species and or destroying or adversel y modifying designated critical habitat (e.g., prey base). Nex t, the final rule provides an option that allows a facility to demonstrate to its permitting authority that it has installed modified traveling screens – the technology EPA identified as the basis for the BTA impingement mortality standard

– and to provide data on the performance of its screens. The facility must demonstrate that its modified traveling screens are consistent with EPA’s definition and demonstrate through an

48 Or any of the IM compliance alternatives.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 125 of 567 impingement technology

performance optimization study that its screens have been optimized to minimize impingement mortality. After consideration of the information provide d , the permitting authority will determine whether the technology is the best technology

available for impingement mortality reduction at the site and include permit conditions to ensure optimal performance of the screens. In other words, the owner or operator of a facility

will comply with the BTA standard for IM at § 125.94(c)(5) if that facility uses modified trav eling screens as defined at § 125.92 (s) , and operates in accordance with the permit conditions established by the Director that ensure the technology

will perform as demonstrated. As noted above, in certain circumstances, under § 125.94(c)(8), (9) and 125.94(g), the Director may require additional protective measures . As stated in the June 11, 201 2 NODA , EPA does not intend for facilities to install closed - cycle cooling solely for the purpose of meeting the IM requirements. In fact, EPA expects all facilities could comply with IM requirements without relying on retrofitting to closed - cycle cooling (see Exhibit VIII - 1 , showing expected compliance alternative based on technologies in place today). If a facility chooses to comply

with the BTA IM standard by installing and operating traveling screens, the screen s must meet the definition of modified traveling screens provided at § 125.92 (s) . These may include, for example , modified Ristroph screens with a fish handling and return s ys tem, dual flow screens with smooth mesh, and rotary

screens with fish returns such as vacuum pump s . EPA based th e regulatory definition on the commonly found features of modified traveling screens used in developing the BTA impingement mortality standard.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 126 of 567 In addition, the final rule also provides a compliance option that would allow facilities the option of demonstrating to the Director on a site - specific basis , similar to the showing for modified traveling screens, that a system or combinati on of technical and operational measures will achieve the BTA standard for impingement mortality at a particular site . Using a combination of technical and operational measures as the basis for demonstrating compliance allows facilitie s the opportunity to take credit for intake location, flow reduction, or other measures already emplo yed to reduce the rate of impingement. Further, the combination of technical and operational measures provides the flexibility

to use a s ystem of approache s to reducing impingement and impingement mortality . This may

include technologies that were not found to reduce impingement consistently

or in all circumstances, but that on a site - specific basis have been demonstrated to provide a h igh level of performance. For example, a facility might employ light and sound to induce an avoidance response from certain species. This might not alone address impingement mortality for all non - fragile species at the intake, therefore additional measures (intake location, barrier nets, etc.) would also be applied, to minimize the rate of impingement or impingement mortality . For both the screens and sy stem of technologies, a two year study must be completed in which biological data collection i s used to make site - specific adjustments to screens or the combination of technologies in order to optimize performance at that facility . Those optimal operating parameters then become permit conditions. For facilities that have already installed traveling screens or the technologies associated with the sy stem approach, EPA has combined the two year biological study with the other permit*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 127 of 567 application and rule requirements for biological data collection , including the S ource W ater B aseline B iological Characterization Data . In this manner, EPA is establishing a consistent set of biological study requirements, with an overall reduction in the burden of the required level of biol ogical monitoring. Lastl y, a facility may choose to comply with the numerical impingement mortality performance standard that was established based on the BTA technology . If a facility chooses this compliance option, it must conduct periodic monitoring to demonstrate compliance. Under this la st compliance option , a facility could implement innovative technologies to address impingement mortality and subsequently demonstrat e that their performance is as good as, or better than, a modified traveling screen with fish handling and return s ys tem. EPA envisions that after a sufficient demonstration period of a technology ’s performance, the facility will be able to qualify its operation under the previous option. For entrainment, on the other hand, EPA could no t identify one technology

that represented BTA for existing facilities on a national basis , for the reasons explained in detail below. Instead, the national BTA entrainment standard s for existing facilities establishes a detailed regulatory framework for the determination of BTA entrainment requirements b y the permitting authority on a site - specific basis. While site - specific permit requirements are not new, what is different about this approach from the cur

rent requirement for permits to include 316(b) conditions is that for the first time, EPA is establishing a detailed specific framework for determining BTA entrainment control requirement s. Thus, the rule identifies what information must be*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 128 of 567 submitted in th e permit application, prescribes procedures that the Director must follow in decision making and factors that must be considered in determin ing what entrainment controls and associated requirements are BTA on a site - specific basi s. As previously

noted, EPA looked at a number of factors in considering what national entrainment standard it should adopt. As discussed in detail in the following section, EPA identified only o ne high performing technology as a potential BTA candidate for entrainment: closed - c ycle recirculating s ys tems as defined at § 125.92(c)(1) . While there are other technologies for entrainment that are available or demonstrated, they

are not uniformly high performing technologies. See TDD Chapter 6 for more information regarding the lack of intermediate performing technologies for entrainment. EPA has identified the following specific factors as the key elements in its decision not to prescribe this technology as the basis for a national BTA standard for entrainment : land availability, air emissions , and remaining useful plant life. How these factors dictated EPA’s decision is discussed below. For new units at existing facil ities, EPA has established BTA requirements to minimize impingement mortality and entrainment, based on flow reduction commensurate with closed - cycle cooling. The rest of this section describes in detail the above considerations. **C .**  **Technologies Considered to Minimize Impingement and Entrainment**  As described in Chapter 4 of the TDD, power plants and manufacturers withdraw large volumes of cooling water dail y. Cooling water withdrawals are responsible for over half of surface water withdrawals for all uses in the United States, including agriculture*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 129 of 567 and municipal uses. The purpose of cooling water withdrawals is to dissipate that portion of the heat that is a by- product of industrial processes that facilities have not harnessed to a productive end and therefore view as waste heat. The majority

of environmental impacts associated with intake structures are caused b y water withdrawals that ultimately result in the loss of aquatic organisms. These losses might be from impingement, entrainment, or both. Impingement occurs when organisms are trapped against the outer part of a screening device of an intake structure. 49 The force of the intake water traps the organisms against the screen and they are unable to escape. Not all organisms in the incoming water are impinged, however. Some might pass through the screening device and travel through the entire cooling s ys tem, including the pumps, condenser or heat exchanger tubes, and discharge pipes. This is referred to as entrainment. Various factors lead t o the susceptibility of an organism to impingement or entrainment. For more detailed discussion of impingement and entrainment and the associated mortality and other effects, see S ection I II above. For purposes of this rule, EPA is adopting the foll owing conventions for defining impingement and entrainment and mortality :  Impingement: Occurs when any life stage of fish and shellfish are pinned against the outer part of an intake structure or against a screening device d uring intake

49 Ty pically, cooling water intake structures use various screening devices to prevent objects (e.g., debris, trash) from being drawn in with the cooling water and ultimately clogging or damaging the cooling water system, especially the condenser or heat exc hanger components.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 130 of 567 water w ithdrawal. Impingement may also occur when an organism is near a screen but unable to swim away from the intake structure because of the water velocity at the intake.

 Entrainment: Occurs when any life stage s of fish and shellfish are drawn into the intake water flow entering and passing through a cooling water intake structure and into a cooling s ys tem.  Impingement Mortality : The death of fish or shellfish due to impingement. Itmay also include organisms removed from their natural ecos ys tem and lacking the ability to escape the cooling water intake s ys tem and thus subject to mortality . Note that impingement mortality need not occur immediately . Impingement may cause harm to the organism which results in mortality at some time after impingement . For purposes of this rule , EPA has defined impingement mortality as the death of those organisms collected or retained by a sieve with a maximum opening of 0.56 inches; this includes both the 3/8 - inch sieve and a 1⁄2 - inch by 1⁄4 - inch mesh . 50

 Entrainment Mortality : The death of fish or shellfish due to entrainment. This is ty picall y associated with mortality related to small organisms that pass the entire way through a facility

and are killed as a result of thermal, phy sical, or chemical stress es. This term also includes the death of those fish and shellfish that may

50 Mesh sizes of 3/8” are commonly referred to as coarse mesh; this refers to the size of the screen opening (in contrast to fine mesh) and not the roughness of the mesh material.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 131 of 567 occur on fine mesh screens or other technologies used to exclude the organisms from entrainment. For purposes of this rule, EPA defined entrainment mortality as the death of those o rganisms passing through a sieve with a maximum opening of 0.56 inches . Impingement mortality

is ty picall y less than 100 percent of the impinged organisms if a fish return or backwash s ys tem is employed . Impingeable organisms are generall y not very small fish o r earl y life stages ( e.g., those that can pass through 3/8 inch mesh screens ) , but ty

pically are fish with fully

formed scales and skeletal structures and well - developed survival traits such as behavioral responses to avoid danger. EPA’s data demon strate that, under the proper conditions, many impinged organisms can survive. Entrainable organisms generall y consist of eggs and earl y life stage larvae. Earl y larvae generally

do not have skeletal structures, have not yet developed scales, and in many c ases are incapable of swimming for several day s after hatching . EPA has found that entrainable organisms that are collected after interaction with the CWIS show poor survival in the case of most eggs, and essentiall y no survival of larvae. Consequently , on the basis of the record information it has reviewed , EPA concluded for purposes of this rule that all entrained organisms die , i.e., no entrained organisms survive. (See, for example, 76 FR 22188 [April 20, 2011] and 69 FR 41620 [July 9, 2004].) Therefore , without entrainment control, entrainment is assumed to lead to entrainment mortality . Also see Chapter A7 of the Phase II Regional Studies Document (DCN 6 - 0003; EPA HQ - OW - 2002 - 0049 - 1490 ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 132 of 567 Whether an organism near a cooling water intake structure is impin ged or entrained is a fun ction of the screen mesh size. Holding the number and size distribution of organisms at the intake constant, a larger screen mesh size will result in relativel y more entrainment, while a smaller mesh size will result in relatively more impingement. Historically , traveling screens deployed b y power plants used a 3/8 - inch mesh size. For this reason, most studies and reports referring to impingement are in fact referring to those organisms impinged on a 3/8 - inch mesh screen. Similarly , entrainable organisms are those organisms fitting through a mesh of less than or equal to 3/8 of an inch. This also means the majority of entrainable organisms are composed of eggs, larvae, and smaller juveniles. More recent studies, particularly those th at evaluate mesh sizes smaller than 3/8 of an inch, continue to refer to impingement as any organism caught on the screen. This can cause some confusion because many organisms that would have been entrained with a 3/8 - inch mesh instead become impinged by the finer mesh. These are referred to as impinged entrainables or “converts.” EPA has also found that most studies of entrainment are biased toward the larger (older) larvae with higher survival rates and do not analyze survival of smaller larvae. This bias implies a focus on larvae body lengths sufficient to have be gun scale and bone development, and it generally reflects the more motile earl y life stages. EPA found that these study findings cannot be applied to smaller and less motile life stages, which are incapable of avoidance responses. It is also important to n ote that preventing entrainment b y s ome exclusion technologies might result in very

high entrainment reductions by converting entrainment to impingement, but these impinged organisms may have an even lower likelihood of surviving impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 133 of 567 than larger po tentially

impinged organisms. Therefore, while entrainment refers specificall y to passage through the cooling water intake system, entrainment mortality also includes those smaller organisms killed b y exclusion from the cooling water intake sy stem. Today ’s rule uses the 3/8 - inch mesh size as part of the definition of impingement mortality and entrainment mortality as a means of clearl y differentiating those organisms that might be susceptible to impingement or entrainment, and thereb y avoids any confusion o ver the status of impinged entrainables or “converts.” Generally , two basic approaches can be used to reduce impingement mortality and entrainment. The first approach is flow reduction, where the facility installs a technology or operates in a manner to re duce or eliminate the quantity of water being withdrawn. Reduced volumes of cooling water produce a corresponding reduction in impingement and entrainment and, therefore, reduced impingement mortality and entrainment mortality . It should be noted that, at electric generators, flow reduction could be achieved, perhaps most effectivel y, b y installing more energy efficient production, thereb y requiring less cooling per unit of electricity generated. The second way to reduce impingement and entrainment is to in stall technologies or operate in a manner that either (1) gentl y excludes organisms or (2) collects and returns organisms without harm. Exclusion technologies or practices divert those organisms that would have been subject to impingement and entrainment a way from the intake. Collection and return technologies are installed to collect and return organisms to the source water, allowing impingement to occur but possibly preventing impingement mortality.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 134 of 567 Although not available to all facilities, two other approaches to reducing impingement and entrainment are (1) relocating the facility’s intake to a less biologicall y rich area in a waterbody , and (2) reducing the intake velocity. Relocating an intake farther from shore or at greater depths can be eff ective at entrainment reduction but is not available to many inland facilities because the distance or depths required to reach less biologicall y- productive waters are not generall y available . Further, while a far offshore intake may

exhibit a lo wer density of organisms, the species found will change as a function of distance from the shoreline as well as depth in the water column. Therefore, it may not alway s be desirable to relocate an intake structure. A reduced intake velocity provides motile organisms the opportunity to swim away

from the intake structure . T his approach can be very

effective in reducing impingement but has no effect on entrainment. S ection s 1 and 2 below further describes flow - reduction and exclusion technologies. 1 . Flow Reduction Flow reduction is commonly used to reduce impingement and entrainment. For purposes of this rulemaking, EPA assumes that entrainment and impingement (and associated mortality) at a site are proportional to source water intake volume. Thus, if a facility reduces its intake flow, it similarly reduces the amount of organisms subject to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 135 of 567 impingement and entrainment. 51 Some common flow reduction technologies are variable frequency drives and variable speed pumps, seasonal operation or seasonal flo w reductions, unit retirements, use of alternate cooling water sources, water reuse, and closed - cycle cooling s ys tems. For additional detailed information on these technologies as well as others, see Chapter 6 of the TDD, “California’s Coastal Power Plants : Alternative Cooling S ys tem Anal ys is” (DCN 10 - 6964), and EPRI’s “Fish Protection at Cooling Water Intake Structures: A Technical Reference Manual” (DCN 10 - 6813). a. Variable Frequency Drives and Variable Speed Pumps A facility with variable speed drives o r pumps operating at their design maximum can withdraw the same volume of water as a conventional circulating water pump. However, unlike a conventional circulating water pump, variable speed drives and pumps allow a facility

to reduce the volume of water being withdrawn for certain periods. The pump speed can be adjusted to reduce water withdrawals when cooling water needs are reduced, such as when ambient water temperatures are colder (and therefore capable of dissipating more heat), when fewer generating units are operating or when fuel is more

51 Impingement rates are related to intake flow, intake vel ocity, and the swimming ability of the fish subject to impingement. Entrainment is generally considered to be proportional to flow and therefore a reduction in flow results in a proportional reduction in entrainment, as EPA assumes for purposes of national rulemaking that entrainable organisms are uniformly distributed throughout the source water. EPA has consistently applied this assumption throughout the 316(b) rulemaking process (for a discussion of proportional flow

requirements in the Phase I and II rules see, e.g., 66 FR 65276 and 69 FR 41599; also see EPA’s 1977 draft guidance manual for 316(b), available at DCN 1 - 5045 - PR from the Phase I docket) and continues to assume that it is broadly applicable on a national scale and is an appropriate assumption for a national rulemaking. EPA recognizes that this assumption does not necessarily apply when relocating or varying the time pattern of withdrawals, such that these may be effective strategies to reduce impingement and entrainment in some locations.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 1 36 of 567 efficientl y burned. In site visits, EPA found that variable drives and pumps were typically used at units operating below capacity , such as load - following units. EPA estimates that facilities with intermittent wat er withdrawals could achieve a 5 to 10 percent reduction in flow. 52 For this reason, many baseload generating units and continuously operated manufacturing processes will obtain limited reductions in flow from using these technologies. EPA is further aware that some facilities may need to withdraw water for cooling even while the facility is not in production, such as facilities on standby status, or nuclear facilities where the heat energy generated by

fission must still be dissipated while the facility

is out of service . As a result, EPA determined that variable frequency drives and variable speed pumps , while useful in specific setting and circumstances, are not BTA candidates because the flow reduction technologies have limited application and availability , and are not a high performing technology as an entrainment control measure . b. Seasonal Operation or Seasonal Flow Reductions Seasonal operation or seasonal flow reduction refers to the reduction or elimination of a quantity

of water withdrawn either during periods of low demand for electricity output, or to coincide with certain biologically important periods. Most facilities that currently

employ seasonal flow reductio ns do so to limit thermal impacts or to reduce entrainment, because entrainment often has a peak season, particularly during a

52 Wi thdrawals of colder water could allow facilities to reduce their intake flow using variable drives and pum ps, but EPA does not have data on the efficacy or availability of this approach.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 137 of 567 local spawning season . Freshwater drum, for example, perform broadcast spawning during earl y summer wh en water temperatures reach about 65 degrees Fahrenheit . During specific peak entrainment period s , a facility could scale back its operation (or perhaps not operate at all), thereb y reducing or eliminating the volume of cooling water withdrawn. This could be accomplished through a combination of variable speed pumps or shutting down some portion of the pumping s ys tem. Seasonal flow reduction could also consist of operating a closed - cycle recirculating sy stem as defined at § 125.92(c)(1) as once - through during part of the ye ar and as a closed - cycle sy stem during the peak entrainment season. (E PA notes that closed - cycle cooling has been rejected as noted in the previous section , and discussed in more detail below .) Facilities could also choose to schedule regular maintenance to occur during these high entrainment periods . These maintenance activ ities often require the facility to reduce or cease operations and can be timed to coincide with the most biologically productive periods. Through site visits, EPA gathered information on species present at facilities and has identified some sites where entrainment appears to be significant all year long, and other sites where peak entrainment occurs in as few as three to four months of the year. 53 However, if all power generating facilities in a local area were to stop operating at the same time, there coul d be difficulty in suppl yi ng electricity to the area . Therefore, EPA concluded that seasonal

53 See DCN 10 - 6702 and its attachments for examples of spawning “seaso ns.”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 138 of 567 operations have limited nationwide application for controlling entrainment and are thus not widely available entrainment reduction technology . Impingement is generall y more sporadic , less predictable, and more difficult to address with seasonal operation . For example, clupeid species , such as gizzard shad, experience impingement episodes sporadically throughout the winter and spring during periods of especially

cold water temperatures, or sporadicall y throughout the summer and fall during periods of low dissolved oxygen.

c. Unit Retirements Some power plants units have been retired and others have essentiall y ceased all operations but have not been formally retired or decommissioned. The reasons for their inactivity vary , 54 but the end result is the facility no longer needs cooling water withdrawals for these units. Similarly , manufacturers may retire processing units as market demand changes, process lines are moved to other sites, or production technologies change. Unit closures provide clear reductions in flow, but the demand for elec tricity (or other products) might dictate that production be increased at the facility in question or at another facility altogether; there is usually no guarantee that the intake flow will be permanentl y retired. EPA expects flow reductions due to unit cl osures could be

54 Note that some generating units are retired by the owner ( i.e. , the unit is no longer considered sufficiently profitable to operate) or is rarely dispatched by its independent system operator for market - driven reasons (i.e., the unit cannot deliver at a competitive price except during limited peak seasons; see also § 125.94(c)(12)). They may also be mothballed, placed on cold storage, or maintained in various other states of operational readiness.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 139 of 567 reasonabl y included as part of a facility’s impingement mortality and entrainment reductions strategy . Given the number of variables involved in the decision to retire a unit and the likelihood of a facility having a unit that is ready to r etire at promulgation of the final rule, unit retirements are not a nationally available entrainment reduction measure . See S ection VII I for further discussion of how a facility can take credit for flow reductions attributable to unit closures. d. Use of Alternate Cooling Water Sources While not reducing the overall usage of water at a facility , using an alternate source of cooling water can reduce impingement and entrainment if the alternate source substitutes for withdrawals from surface waters. An examp le is using “gray” water as a source of cooling water , such as a facility that reaches an agreement with a nearb y wastewater treatment plant to accept the wastewater treatment plant’s effluent as a source of cooling water. 55 Such alternate sources are limit ed by available capacity and consistency

of flow . Increasing competition for these sources of water may make this a more challenging approach for existing facilities than for new facilities that are not yet fixed in location . Inprinciple, alternate source s could be used to fulfill either a fraction or all of a fac ility ’s cooling water demands. In practice, the location of alternate sources, the costs of moving water from the alternate source to the facility , and whether the facility

55 See, for example, EPA’s site visit report for PSE G’s Linden Generating Station (DCN 10 - 6557), which has a capacity of 1230 MW, 35 percent CUR, and uses 7 - 8 mgd of gray water as the sole source of makeup water for its cooling towers.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 140 of 567 uses a once - through or closed - cycle recirculating sy stem a s defined at § 125.92(c) will determine whether the alternate source can meet all or a portion of the f acility ’s cooling water needs. All these factors limit the widespread availability of alternate cooling water s ources as an entrainment reduction measure , however use of alternative sources of cooling water such as wastewater treatment effluent could be attractive for certain facilities where the cost of retrofitting or other site - specific circumstances are favorab le . 56 e. Water Reuse Ty pically associated with manufacturing facilities, water reuse (defined as using water for multiple processes) can reduce the volume of water needed for cooling, process, or other uses. For example, a facility might withdraw water for non - contact cooling water and then reuse the heated effluent as part of an industrial process. In effect, the facility has eliminated the need to withdraw additional water for the latter process. EPA has observed significant water reuse at manufacturing facilities but has not developed national level data for such reuse because of the range of different manufacturing sectors and the significant variability in manufacturing processes appropriate for reuse. For example, during site visits, EPA observed that it may be difficult t o quantify specific water reuse at complex facilities . (S ee , for example, the site visit report for ArcelorMittal ,

56 For maps showing which electric generators are near a source of avail able reuse water for cooling, see Tidwell, V., J. Macknick, K. Zemlick, J. Sanchez, and T. Woldeyesus. 2013. “Transitioning to Zero Freshwater Withdrawal for Thermoelectric Generation in the United States.” (submitted). See also the accompanying presentati on given at the American Geophysical Union Fall 2012 Meeting available at http://www.nrel.gov/docs/fy13osti/57444.pdf .).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 141 of 567 a steel mill at DCN 10 - 6551 . ) For additional detail on water usage in specific industrial sectors, s ee Chapters 4 and 8 of the TDD.

In creas ingl y, electric utilities are adopting water reuse to meet a portion or all of their cooling water demands. Water reuse can enhance the reliability of power generation in water- limited environments. Given the complex use (and reuse) patterns for some faci lities and the lack of reuse at other facilities, water reuse cannot be considered as a widel y available entrainment reduction option . f. Closed - Cycle Cooling Systems Closed - cycle cooling s ys tems allow a facility to transfer its waste heat to the environment using significantly smaller quantities of water relative to once - through cooling , and in some cases no water . The main types of closed - cycle cooling s ys tems are wet cooling , dry

cooling , hy

brid cooling, and impoundments . Each is described below. i. Wet C ooling Systems In a wet cooling s ys tem, cooling water that has absorbed waste heat transfers that heat through evaporation of some of the heated water into the surrounding air and recirculates the now cooled water to continue the cooling process. 57 This process enables a facility to reuse the remaining water, thereb y reducing the quantity of water that must be withdrawn from a waterbody . Because the heat is transferred through evaporation, the amount of water withdrawn from the water sourc e is greatly reduced, though not

57 In addition, a smaller portion of the heat is also removed through direct contact between the warm w ater and the cooler surroundings; this is known as sensible heat.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 142 of 567 eliminated completely , because make - up water is required to replace that lost through evaporation and blowdown. 58 The two main ty pes of wet cooling s ys tems are natural draft and mechanical. While wet cooling s ys tems reduce w ithdrawals significantly relative to once - through sy stems, they can increase the consumptive use of water because they rel y on evaporation (which is not returned to the waterbody) for heat dissipation. When once - through cooling is used and withdrawals are a significant portion of the source waterbody , the return of heated water might contribute to greater evaporation from the waterbody relative to the waterbody ’s nor mal evaporation rate. EPA does not have conclusive data on the relative magnitude of these effects, but the data do suggest that the relative difference in evaporation is not so great that it will play a major role in determining a cooling s ystem ty pe in most watersheds. EPA examined available information on evaporation losses in DCN 12 - 6673 , including a comparison to evaporative losses from the downstream effluent plume of once - through cooling s ys tems. While EPA recognizes that evaporative losses from closed - cycle sy stems are greater, EPA ’s anal ys i s does not suggest that the difference is substantial enough to outweigh the significant reduction in adverse environmental impacts to aquatic organisms . However,

58 Cooling towers must replace water lost to evaporation; this is referred to as makeup water. Additionally, as water evaporates, dissolved solids and other materia ls gradually increase in concentration in the circulating water and can cause operational difficulties. To minimize these issues, cooling tower operators continually discharge a small portion of the circulating flow and replace it with makeup water; this i s referred to as blowdown.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 143 of 567 the relative loss of water through evaporation for closed - cycle and once - through s ys tems is s ite - specific, depending on the exact design of the systems. There are two common de signs for wet cooling s ystems. A natural draft cooling tower can be as tall as 500 feet and has a hyperbolic shape. The height of these towers creates a temperature differential between the top and bottom of the tower, which creates a natural chimney

effect that transfers heat as heated water contacts rising air. In contrast, mechanical cooling towers rel y on motorized fans to draw air through the tower and into contact with the heated water. 59 These towers are much shorter than natural draft cooling towers (typicall y 30 to 75 feet tall) and can be built in groups . Mechanical cooling towers may require more land area than natural draft cooling towers for an equivalent amount of cooling. Both ty

pes of towers require electricity for pumps, but mechanical draft towers also require electricity to operate the fans. In both cases, the electricity need of the tower s reduces an electric generating facility ’s net generating output. Thus, the monetary and environmental costs of this reduction in energy efficiency

must be considered. These environmental costs include human health and welfare effects from increased air emissions (from burning additional fuel to make up for the power that cannot be sold) and the global climate change effects of increased greenhouse gas output at fossil - fueled facilities (these costs are now explicitly considered in the benefit - cost analy sis; see

59 Modular cooling tower units provide an additional cooling tower alternative . Modular cooling towers resemble mechanical cooling towers, but are portable, typically rented for short - term periods and quickly assembled.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 144 of 567 Section X below) . Both natural draft and mechanic al cooling towers can operate in freshwater or saltwater environments. Saltwater applications ty picall y require more make - up water than freshwater applications, making them less efficient in reducing water withdrawals. Optimized cooling towers can achieve flow reductions of 97.5 and 94.9 percent or better for freshwater and saltwater sources, respectively . ii. Dry

Cooling Sy stems Dry cooling sy stems virtually eliminate the need for cooling water withdrawals. 60 Unlike wet cooling sy stems, waste heat in dry coolin g s ys tems is transferred completely through convection and radiation, rather than evaporation. Direct dry cooling is much like a car radiator; turbine exhaust steam passes through tubes or fins for cooling, and the condensate is returned to the boiler to b e reheated into steam to propel the turbine. The sy stem is completel y closed to the atmosphere, and there is no contact between the outside air and the steam or the resulting condensate. Because of the heavy reliance of dry cooling on ambient air temperatures and the lower efficiency of heat transfer through convection and radiation, dry cooling s ys tems are much larger and therefore more expensive 61 than wet cooling s ys tems for a given cooling load. While dry cooling systems

60 Dry cool ing systems blow down some of the circulating water in the cooling system to prevent the buildup of materials in the condenser. However, the volume of makeup water is extremely low

—a dry cooling system typically reduces intake flows by 98

– 99 percent over a com parable once - through cooling system. 61 The construction and capital costs for dry cooling towers have been reported as four to 10 times more expensive as wet cooling towers, and the auxiliary power consumption for dry cooling is higher than for wet cooling. See DCN 10 - 6679. EPA recognizes that costs for dry cooling may have decreased since this*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 145 of 567 are not uncommon in the U.S. (see DCN 10 - 6943), they have typicall y been built at smaller generating units or in areas where limited water supplies might make uncertain the availability

of either once - through cooling or wet cooling make - up water, such as the arid southwestern United State s. Dry cooling has not been used for circulating water cooling at nuclear facilities. iii. Hy

brid Cooling Sy stems In certain applications, a facility could choose a hy

brid cooling s ys tem design that incorporates elements of both wet and dry cooling. Ty

pically , the base of the tower functions as a wet cooling s ys tem and the upper portion as a dry cooling s ystem . The most common reason for this design is to reduce the visible plume of water vapor, which is accomplished b y recapturing some of the water vapor evaporated in the wet portion of the tower. This design is also usually much shorter than natural draft wet towers and can also include plume abatement controls. Another version of the hybrid cooling s ys tem also includes both wet and dry cooling sections, but th e dry section functions to directly cool a portion of the turbine exhaust steam. The benefits of such a tower may include substantial water savings as well as reduction in power plant efficiency losses associated with just dry cooling. iv. Impoundments document was written, but costs for dry cooling are still markedly higher than those for wet cooling. The other challenges associated with dry cooling remain unchanged.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 146 of 567 Impoun dments are surface waterbodies that serve as both a source of cooling water and a heat sink . As with cooling towers, impoundments rely on evaporative cooling to dissipate the waste heat ; a facility withdraws water from one part of the impoundment and then discharges the heated effluent back to the impo undment , usually in another location to allow the heated water time to cool. Depending on local hydrology , impoundments may

also require makeup water from another waterbody . Impoundments can be man - made or natural, and can be offset from other water bodies or as part of a “run of the river” s ys tem (the latter are sometimes referred to as cooling lakes). 2. Exclusion and Collection Technologies Over the last several decades, numerous technologies in addition to specific flow reduction measures such as velocity controls and closed - cycle cooling have been developed in an effort to minimi ze impingement mortality and entrainment associated with cooling water intake sy stems. The following section summarizes the most widely used technologies and the most effective and best - performing technologies, such as screens, barrier nets, aquatic filter barriers, and collection and return s ys tems. For additional detailed information on these technologies and others, also see Chapter 6 of the TDD, “California’s Coastal Power Plants” report (DCN 10 - 6964) or EPRI’s “Fish Protection at Cooling Water Intake S tructures” report (DCN 10 - 6813) . a. Screens There are several ty

pes of screens that offer protection that are discussed below, including traveling screens and cylindrical wedgewire screens. Not described in this*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 147 of 567 section are fixed screens that are used simpl y for the purpose of debris exclusion but do not offer protection to fish, larvae, and eggs. i. Traveling Screens Traveling screens are a technology in place as part of most cooling water intake structures. These screens originall y were designed to prevent debris from entering the cooling water s ys tem, but they also prevent some fish and shellfish from entering the cooling water s ys tem. Traveling screens have been installed in a wide variety of operating and environmental conditions: salt water, brackish water, freshwater, and icy water, as well as river, lake and tidal applications. On the basis of the technical survey , EPA found 93 percent of electric generators and 73 percent of manufacturers employ traveling water screens or other intake screens. Many typ es of traveling water screens (e.g., through flow, dual flow, center flow) are used. The most common design in the United States is the through flow s ys tem. The screens are installed behind bar racks (trash racks) b ut in front of the water circulation pumps. The screens rotate up and , while out of the water , debris and impinged organisms are removed from the screen surface by a high pressure spray

wash. Screen wash cycles are triggered either manuall y or by a certain level of head loss across the screen (indicating clogging). By definition, this technology works by collecting (i.e., impinging) fish and shellfish on the screen. Ideally , traveling screens would be used with a fish handling and return sy stem, as discusse d below . The return s ys tem should be regularl y maintained to prevent biofouling or other blockages that may affect survival. ii. Cylindrical Wedgewire Screens*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 148 of 567 Unlike traveling screens, cylindrical wedgewire screens are a passive intake sy stem. Wedgewire screens, also called “V” screens or profile screens, consist of triangular - shaped wires arrayed on a cylindrical framing s ys tem, with long slots between the wire s, lengthwise along the screen. Slot sizes for conventional traveling screens ty picall y refer to a square opening (3/8 inch by 3/8 inch) that is punched, molded, or woven into the screen face. Wedgewire screens are constructed differentl y, however, with th e slot size referring to the distance between longitudinally adjacent wires. These screens are designed to have a low through - slot velocity (less than 0.5 fps or 0.15 meter per second) and typicall y have smaller slot sizes than a coarse mesh traveling scre en. The entire wedgewire structure is submerged in the source waterbody . (See Chapter 6 of the TDD for an illustration of these screens.) When necessary

conditions regarding placement in the waterbody are met, these screens exploit phys ical and hydraulic exclusion mechanisms to achieve consistently high impingement reductions, and as a result, impingement mortality reductions. Wedgewire screens require an ambient crossflow current to maximize the sweeping velocity provided by the waterbody . The screen orientation allows the crossflow to carry organisms away from the screen allowing them to avoid or escape the intake. Lower intake velocities also allow fish to escape from the screen face. Entrainment reductions can also be observ ed when the screen slot size is small enough and intake velocity is low enough to exclude*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 149 of 567 egg and larval life stages. 62 Li mited evidence also suggests that extremel y low intake velocities can allow some egg and larval life stages to avoid the intake because of hydrodyn amic influences of the crossflow. Therefore, performance is dictated largel y b y local conditions that are further dependent on the source waterbody ’s biological composition. Costs of wedgewire screens increase significantl y as slot size and design intake velocity decrease because the cumulative size of the screen (or number of screens) must grow in order to accommodate the same flow of cooling water. Wedgewire screens can also emplo y cleaning and deicing s ys tems such as air - burst sparging to help maintain open intake structures and low intake velocities. According to data from the industry questionnaire, EPA’s site visits, and industry documents, dozens of facilities across the United States employ cylindrical wedgewire screens. Howev er, wedgewire screens are not feasible for all facilities, particularl y where intakes are in shallow water or have limited shoreline frontage. Also, wedgewire screens might not be feasible where the size and number of wedgewire screens would interfere with navigation of vessels. As described above, locations also need to have an adequate source water sweeping velocity . Most of the performance data for wedgewire screens is based on coarse mesh slot sizes with an intake velocity of 0.5 fps. Because it is extremely difficult to measure impingement and entrainment reductions in the field, most

62 Note that this is entrainment exclusion and not necessarily related to the survival of entrainable organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 150 of 567 performance data for wedgewire screens is based on barge and lab studies. 63 EPA does not have data on the performance of fine mesh wedgewire screens on entrainment survival . Consequently , EPA has considered wedgewire screens onl y for impingement mortality . For additional discussion of the specific design and operation of cylindrical wedgewire screens, see Chapter 6 of the TDD. The following section discusses the importance o f mesh size to impingement mortality and entrainment reductions. iii. Screen Mesh Size Considerations Coarse Mesh Coarse mesh traveling screens are the typical traveling screen fitted on the majority of cooling water intakes. A large number of facilities h ave intake screens with 3/8 - inch ( 9.5 mm) mesh panels . 64 This size mesh is common because, as a general rule, the maximum screen slot size is never larger than one - half of the condenser tube diameter (the condenser tubing is the narrowest point in the cooling water s ys tem and, as such, is most susceptible to clogging from debris), and this tubing is ty pically 3/4 or 7/8 inch in diameter. Mesh of 3/8 - inch (roughl y 9.5 mm) size does not prevent entrainment and without any

other precautions can lead to high mortality of impinged fish. Coarse mesh traveling screens have been in use b y both power plants and manufacturers for more than

63 EPA expects that properly designed wedgewire screens have a design intake velocity of 0.5 fps, therefore intakes with wedge wire sc reens will meet the impingement standard at § 125.94(c)(2) and there is no need to separately pre - approve this technology as in the remanded 2004 Phase II rule. 64 In today’s rule the EPA recognizes that 1⁄2 by 1⁄4 inch mesh is used in some instances and perform comparably to the 3/8 inch square mesh.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 151 of 567 75 years and represent the baseline technology . Similarly , the majority of successful wedgewire installations are coarse mesh. Fine Mesh Fine mesh traveling and wedgewire screens are similar to coarse mesh screens . The only difference is the size of the screen mesh. Fine mesh traveling screens have been in use since the 1980s. Ty pically , facilities have incorporated fine mesh in an ef fort to reduce entrainment. The mesh size varies, depending on the organisms to be protected, but ty picall y range from 0.5 to 5 mm. Data in the record demonstrate that entrainment ty picall y decreases as mesh size decreases. Slot sizes larger than 2 mm do n ot prevent eggs from passing through the screen . Converting traveling screens from coarse mesh to fine mesh often requires adding more screens in order to maintain the same flow, since the open area of a fine mesh screen is less than the open area of a coarse mesh screen . Adding more screens is one way to maintain that flow. 65 EPA estimates that as many as 17 percent of existing intakes could not be enlarged to accommodate a 2 mm mesh, and as many as 55 percent of existing intakes could not accommodate a 0.5 mm slot size under conditions of low - intake velocities . For these reasons, fine mesh screens are available for some locations, but they are not the best performing technology and are not an available technology

for the industry

as a whole for IM&E . For mo re details, see Chapter 6 of the TDD.

65 A facility could also increase its intake velocity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 152 of 567 b. Barrier Nets Barrier nets are nets that fully encircle the intake area of water withdrawal, from the bottom of the water column to the surface, and prevent fish and shellfish from coming in contact with the intake s tructure and screens. According to data from the industry questionnaire (as of the year 2000), at least a half dozen facilities employ a barrier net. Ty pically , barrier nets have large mesh sizes (e.g., 1/2 - inch or 12.7 mm) 66 and are designed to prevent imp ingement. Because of the large mesh size, they offer no reduction in entrainment. They

are often deployed seasonally , wherever seasonal migrations create high impingement events or to avoid harsh winter conditions that jeopardize integrity of the net. Barrier nets also prevent impingement of shellfish on the intake traveling screen. Shellfish such as crustaceans can pose a unique issue for traveling screens; shellfish are not impinged, but they

can attach to the traveling screen surface and are not removed from the traveling screen by pressure wash spray s. Barrier nets have been shown to be helpful in this regard. c. Aquatic Filter Barriers Aquatic Filter Barriers (AFBs) consist of water- permeable fabric panels with small pores (less than 20 microns). They are similar to barrier nets in that they extend throughout the area of water withdrawal from the bottom of the water column to the surface. AFBs reduce both impingement mortality and entrainment because they present

66 Barrier net mesh sizes vary, depending on the configuration, lev el of debris loading, species to be protected, and other factors.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 153 of 567 a phy sical barrier to all life stages. Th e surface area of an AFB is quite large compared to a traveling screen, allowing for extremely low water velocities. The low velocity allows non - motile organisms to drift away . EPA is aware of one power plant that used an AFB but notes that this facility recentl y ceased operations. 67 EPA has updated performance data for AFB for small flow intakes, but it does not have enough data to evaluate the technology

at large intakes or in all water bodies. EPA does not consider this technology to be demonstrated and available as a nationwide BTA candidate. d. Collection and Return Systems Conventional traveling screens were not designed initially with the intention of protecting fish and aquatic organisms that become impinged against them . The organisms were often handled in the same manner as debris on the screens. Marine life can become impinged against the screens because of high intake velocities that prevent their escape. Prolonged contact with the screens can suffocate organisms that are unable to escape or result in descaling injury

and latent mortality . Organisms that survive initial impingement and removal are not alway s provided with a specifically designed mechanism to return them to the waterbody and are often handled in the same way as other screen ing debris. Other objects , such as leaves and trash, that are collected on the screen are typically removed with a high - pressure spray and deposited in a dumpster or debris return trough for disposal. Exposure to high pressure spray s and other screening debris can cause

67 This facility ceased operations for reasons unrelated to any requirements or measures addressing cooling water intake im

pingement or entrainment .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 154 of 567 significant injuries that result in latent mortality or increase the susceptibility to predation or re - impingement. Screens are rotated periodically on a set time interval or when the pressure differential between the upstream and downstream faces exceeds a set value. Conventional traveling screen s ys tems have been modified to reduce impingement - related mortalities with collection and return s ys tems. In its simplest form, these sy stems are composed of a return flume or trough with sufficient water volume and flow to enable impinged organisms to return to the source water. Return s ystems should be designed to avoid predation and latent mortality while organisms are in the flume, maintain an appropriate water depth in the flume for high survival of the organisms, located at an appropriate elevation to avoid large drops of the organisms back to the surface water (or large hydraulic jumps if the end of the return is below the water’s surface), and sited to avoid repeated impingement of the organism s by the intake structure. S ome facilities have modified conventional coarse mesh traveling screen s ystems to reduce impingement mortality . They did this by

removing fish trapped against the screen and returning them to the receiving water with as few injuries as possible. The first modified screens, also known as Ristroph screens, feature capture and release modifications. In the simplest sense, these screens are fitted with troughs (also referred to as buckets) containing water that catch the organisms as the screen rises out of the water and the organisms are sprayed off of the screen. The return component consists of a mechanism to remove impinged fish gently from the collection buckets, such as a low pressure spray . The buckets empty into a collection trough that returns fish to a suitable*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 155 of 567 area in the source waterbody . These modified screens have shown significant reduc tions in impingement mortality compared with unmodified screen s ys tems. Data from earl y applications of the Ristroph screen design showed that while initial survival rates might be high at some installations, latent mortality rates were higher than anticipated . This indicated that organisms could sustain significant injuries during the impingement and return process that were n ot immediately fatal. According to a study conducted b y Ian Fletcher in the 1990s (see DCN 5 - 4387), industry identified several additional critical screen modifications to address latent mortality . These included redesigning the collection buckets to minim ize turbulence, adding a fish guard rail/barrier to prevent fish from escaping the collection bucket, replacing screen panel materials with “fish - friendl y, ” smooth woven mesh, and using a low - pressure wash to remove fish before any high - pressure spray to remove debris. The Fletcher anal ys is also identified longer impingement duration, insufficient water retention in the buckets, and exposure to the air and temperature extremes as conditions that could negativel y affect fish survival. Finally , these findings indicate that modified Ristroph screens must be rotated continually instead of the periodic rotation schedule common with conventional screen sy stems. Performance data for modified traveling screens with fish - friendl y fish return systems, sometimes referred to as post - Fletcher modifications, show low levels of impingement mortality across a wide variety of waterbody ty pes and fish species. Additionally , recentl y developed screen designs (such as the Passavant Geiger, Beaudrey W IP , and Hydrolox screens) have also shown promise in reducing impingement mortality .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 156 of 567 For a dditional and more detailed discussion of the specific design and operation of these screen modifications, see Chapter 6 of the TDD. 3. Other Technological Approaches a. Intake Location and Velocity Caps The most common intake location for a cooling water intake structure is along a shoreline. In some water bodies, however, shoreline locations are thought to have a potential for greater environmental impact because the water is withdrawn from the most biologicall y productive waters , especiall y those contain ing a high density of organisms in earlier life stages , such as nursery areas . Some facilities employ an offshore intake to withdraw water from less biologicall y productive areas to reduce impingement and entrainment relative to intakes in more productive shoreline areas. R eduction in impingement mortality

and entrainment due to intake location is highl y site - specific . The greatest potential for reductions is found with far offshore locations at distances of several hundred feet, not found on many rivers an d streams. Both depth and the offshore location must be evaluated to determine whether fish densities and species distribution there are substantiall y different than those near the shoreline. Two areas where far offshore locations are commonly used today

are the oceans and Great Lakes. EPA found that several offshore intakes are fitted with a velocity cap. 68 Velocity caps are a ph ys ical structure rising vertically from the sea bottom and are placed over the

68 Others can be fitted with a cylindrical wedgewire screen, or might simply be an open pipe.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 157 of 56 7 top of an intake pipe. Intake water is withdrawn through openings in the velocity cap so that it converts the direction of water flow into the pipe from vertical to horizontal. The velocity cap does not act to reduce the velocity, 69 but the horizontal flow provides a phy siological trigger in fish, which ind uces an avoidance response to reduc e impingement mortality . The velocity cap further serves to limit the zone of influence of the intake to the depth level at which the velocity cap is situated, thus affecting only the life stages that live at that depth. Velocity caps are also usually

equip ped with supports and bar spacing selected to prevent larger aquatic organisms (e.g., sea turtles or marine mammals) from entering the intake pipe. Because velocity caps operate under the principle that the organisms can escape the current, they do not off

er entrainment reductions over and above those achieved b y being located offshore. Reductions in entrainment observed with velocity caps occur because of the difference in organism densities in far offshore deep water compared to a surface intake at the sh oreline. Far o ffshore velocity caps have limited application in oceans and the Great L akes, are not available in other water bodies, and are therefore not available as a candidate for a national BTA. However, the technology is a demonstrated hi gh performin g technology , and is therefore included as a compliance alternative for those facilities where the technology

is available. For additional and more detailed discussion of the specific

69 EPA’s data show that velocity caps operate at velocities above and below the 0.5 fps and can be effective using either design.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 158 of 567 design and operation of offshore intake locations and velocity caps, se e Chapter 6 of the TDD. b. Reduced Intake Velocity Impingement mortality

can be reduced greatl y b y reducing the through - screen velocity in any s creen. 70 Reducing the rate of flow of cooling water through the screen (through - screen velocity) to 0.5 fps or less reduces impingement of most fish because it allows them to escape the intake current. (See 66 FR 65274 [December 18, 2001] and DCN 2 - 028A, EPRI’s “T echnical Evaluation of the Utility of Intake Approach Velocity as an Indicator of Potential Adverse Environmental Impact Under Clean Water Act 316(b).”) As a result, some facilities have designed and operate their modified traveling screens or wedgewire sc reens so as not to exceed a through - screen velocity of 0.5 fps. Swim speed studies demonstrate that for most facilities, an intake velocity of 0.5 fps or less will result in 9 6 percent or better reductions in impingement mortality for most species. EPA not es that preliminary results from recent studies of fine mesh screens suggest that at even lower intake velocities such as 0.25 fps, some hydrodynamic influences may

reduce entrainment mortality even more, because flow dy namics are nonlinear. It is unclear as to whether such observations hold true when cooling water

70 Limited lab studies indicate that entrainment also can decrease as through - screen velocity decreases and that through - screen velocity can have an effect on entrainment survival rates, although such data is extremely variable by species ( see DCN 10 - 6802 and DCN 10 - 6803 ) . In any case, EPA does not consider a reduced intake velocity as an effective technology for reducing entrainment, because entrainable organisms generally lack motility.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 159 of 567 withdrawals (water volumes) are large. While higher intake velocities are suffi cientl y protective for some species of fish, the higher intake velocities are not necessarily protective of all life - stages. For example, younger fish may not be strong swimmers or may have not a developed avoidance response. Therefore higher intake veloci ties are not a high performing technology . As noted previously , low intake velocity has limited application, and is therefore not available as a candidate BTA technology . However, the technology

is a demonstrated high performing technology , and is therefor e included as a compliance alternative for those facilities where the technology is available. **D .**  **Technology Basis for Today’s Final Rule** As described above, EPA examined the full range of technologies that reduce impingement or entrainment or both . From an assessment of all factors, EPA identified one technolog y that is best technology available for minimizing the adverse impacts of impingement mortality at existing facilities : modified traveling screens with a fish friendl y fish return . EPA identified no single best technology that is available for minimizing entrainment at existing facilities for today ’s final rule . For new units at existing facilities, EPA identified mechanical draft wet cooling sy stem s as BTA for both impingement and entrainment . 71

71 Although EPA also identified velocity reduction to 0.5 feet per s econd or less as a candidate best performing technology for impingement mortality, EPA did not promulgate requirements to reduce intake velocity as BTA because it is not available at all facilities; however, the final rule does allow facilities to comply with intake velocity of 0.5 feet per second or less where available.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 160 of 567 EPA did not identify

any single technology or group of technology controls as the basis for establishing the national BTA standard for entrainment for existing units . Instead, EPA has established a national BTA standard for entrainment for existing units that requires determination of BTA entrainment requirements on a site - specific basis in a structured permitting setting. The framework for determining entrainment requirements provides for the consideration at a minimum of certain specified factors that must be considered in the Director’s determination of the BTA controls . 1. Alternative Impingement Mortality Standard s for Existing Units After considering all factors identified above, EPA has concluded that modified traveling screens, such as modified Ristroph screens and equivalent modified traveling screens with fish - friendl y fish returns, are a best technology available for minimizing impingement mortality . 72 These screens use 3/8 inch, or similar, mesh with collection buckets designed to minimize turbulence, a fish guard rail/barrier to prevent fish from escaping the collection bucket; “fish - friendl y,” smooth, woven or sy nthetic mesh; and a low - pressure wash to remove fish before any high - pressure spray to remove debris. The fish removal spray

must be of lower pressure, and the fish return must be fish friendl y, provide sufficient water and minimize turbulence. Modified traveling screens generall y

72 EPA also considered recent screen designs (such as the Passavant Geiger, Beaudrey WIP, and Hydrolox screens) in evaluating impingement mortality data. In fact, the data set used to calculate the im pingement mo rtality performance standard at § 125.94(c)(7) included a study of performance at a facility employing a Passavant Geiger screen, as well as a facility employing a Beaudrey WIP screen.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 161 of 567 must be rotated continually to minimize aquatic exposure to impingement or to the air and thus obtain the highest reduc tions in impingement mortality . Under the seventh option for compl yi ng with the BTA impingement mortality standard in today ’s final rule, a facility may rel y on any

technology it chooses so long as it demonstrates through biological compliance monitoring that it achieves the required 12 month impingement mortality performance st andard 73 that EPA calculated based on the performance of the BTA technology

– modified traveling screens with fish return . As discussed in the TDD (see, for example, TDD Exhibits 11 - 1 and 11 - 3), EPA based the 12 month percent mortality

p erformance at § 125.94(c ) (7 ) on data from facilities with traveling screens modified with features to improve the post - impingement survival of organisms such as smooth mesh, continuous or near- continuous rotation of the screens, buckets with guard rails, l ow pressure spray s for collecting fish, and fish return sy stems. The statistical basis for the 12 month impingement mortality performance standard includes 26 sets of 12 month survival percentages across 17 facilities demonstrating average impingement mortality rates ranging from 1.6 to 48.8 percent under conditions of 18 to 96 hour holding times. EPA established the 12 month percent mortality as 24 percent which is the arithmetic average of the impingement mortality rates from the 17 facilities. (This is consistent with EPA’s proposed rule use of expected value of the beta distribution which can be calculated as the arithmetic average.) Note: The 12 month

73 In the record, EPA may also refer to this as the 12 - month percent survival performance standard, % SPS, or the IM performance standard.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 162 of 567 impingement mortality

perf ormance standard means that no more than 24 percent of the impinged fish may

die or alternativel y at least 76 percent of the impinged fish must survive. EPA has occasionally used average annual limitations in the effluent guidelines program, most recently for the pulp and paper industry category (40 CFR 430, promulgated in 1998). In these instances , such as the technology- based BAT , EPA has defined the annual average limitations to be the average level demonstrated by the technology . Thus, EPA’s approac h to calculating the 12 month percent survival performance standard is consistent with past practice. EPA recognizes that variability in the technology

performance occurs due to changes in seasons, differing intake location s, higher mortality of certain species, and speciation found in different water bodies. By using a full 12 months of data , EPA has ensured that the resulting performance standard reflects the widest range of potential conditions present in EPA’s database. EPA has further incorporated variability into the 12 month impingement mortality performance standard by basing it on data from 17 facilities which collectively performed more than 1,500 sampling events beginning as e arl y as 1977. EPA notes that seven facilities had mortality rates less than 10 percent which provides evidence that facilities can, and have, maintained and operated their sy stems in a manner consistent with the performance standard . Another four fac ilities demonstrated impingement mortality rates significantly

greater than the performance standard of 2 4 percent, however, EPA notes these facilities were not required to optimize*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 163 of 567 their technology

performance as part of their study , and data colle ction was not required to achieve a certain level of performance. 75 Ineach study , EPA has identified elements of the technology

operation that a facility could modify to achieve the 12 month percent impingement mortality performance standard . By using the 12 month percent impingement mortality performance standard , EPA has ensured that the resulting performance standard reflects the widest range of potential conditions present in EPA’s database. In addition to those studies meeting the criteria for use in the 12 month percent survival performance standard calculations, there are further studies in EPA’s record that provide additional performance data showing facilities can, and have, maintained and operated their sy stems in a manner consistent with the performance standard . EPA’s record includes approximately 250 total studies related to impingement (see TDD Exhibit 11A - 1). Despite the overwhelming evidence that the 12 month percent survival performance standard of 2 4 percent was consistent with demonstrated performance for the best technology , EPA considered other alternatives that might incorporate more variability

into a performance standard . EPA concluded that none of the alternatives were consistent with the need for facilities to demonstrate ongoing maintenance and operations

75 For example, the Indian Point study states “Because of the prelimin ary nature of this study, the effectiveness of the continuously operating fine mesh traveling screen has not been fully evaluated. Further studies incorporating controls for survival testing, regulation of spray wash pressures, collection efficiency tests, sampling during peak impingement periods for all important species, and better holding facilities, will provide more conclusive results.”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 164 of 567 over a long period of time, such as a ye ar. Any alternative would be less stringent and would allow facilities to target long - term performance at a level that would be less than the opti mal performance demonstrated b y facilities with the technology in place. Further, the 12 - month average impingement mortality performance standard will require a facil ity to actively

evaluate performance during the 12 month period enabling the facility to optimize the technology

to improve performance to counterbalance a result above the standard b y one below the standard. If EPA had included a monthly average standard, it would have similarly

needed to incorporate allowances for exceedances. Allowing for exceedances would have provided no incentive for improving operations for such exceedances. Therefore, EPA determined that the 12 month impingement mortality performance standard is sufficient to ensure performance consistent with best technology available. For this reason, EPA is not promulgating the monthl y average that was included in the proposal. EPA’s decision also is consistent with effluent guidel ines where compliance with the monthly average limitation is not required for facilities subject to a longer term limitations such as an annual average limitation (e.g., pulp and paper 40 CFR 430 Subpart B AOX limitation). EPA did not include in the final rule a number of requirements it had considered at proposal . The proposed rule would have required the seasonal deplo ym ent of barrier nets on estuaries and oceans as one element of the best technology available fo r minimizing the impingement mortality of shellfish (crustaceans). EPA has opted not to include any specific requirements for shellfish in the final rule, because EPA’s review of the impingement data it used to develop today ’s final rule impingement performance*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 165 of 567 standard includes data that incorporate shellfish survival as part of the performance standard. Further, as previously explained, the final rule provides for the Director to establish additional req

uirements where necessary . EPA expects facilities complying with § 125.94(c) of today ’s rule by compliance option (7) to track their compliance with the 12 month percent impingement mortality performance standard on an ongoing basis and to p roactivel y modify their technology

or operations when a trend in the sampling suggests that they might be in danger of exceeding the 12 month percent impingement mortality performance standard in the future. The 12 month percent impingement mortality performance standard requires that impingement mortality

not exceed 2 4 percent, calculated as the sum total number of fish that were impinged and died within the holding time divided by the sum total number of fish impinged for a 12 - month period. EPA expects the ratio will be calculated based either on direct sampling counts, or based on both counts being extrapolated to represent annual counts . Because comments provided data that expanding the proposed 24 to 48 hour holding time requirement would generally not affect the observation of mortality due to impingement , the regulation allows for holding times from 18 to 96 hours . As explained in more detail in S ection VI . E and G below, the BTA technology for impingement does not minimize adverse environmental impacts associated with entrainment. 2. Entrainment Standard s for Existing Units As discussed below, EPA is not basing BTA for entrainment at existing units (that is, excluding new units at existing facil ities) on closed - cycle recirculating cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 166 of 567 sy stems, a highl y effective technology , because this technology is not available nationally and therefore does not represent BTA . EPA also has not identified any other effective, available and demonstrated candidate technology (or combinations of technologies) for entrainment reduction at existing units that is available nationall y . F or other entrainment technologies that might be available on a site - specific basis, see S ection VI . E .2 below and C hapter 6 of the TDD. EPA did not select the other flow - reduction technologies (such as variable - speed drives and seasonal flow reductions) as the technology basis for entrainment control measures because these technologies are not uniforml y best and are not broadly

available for most facilities. Further, EPA has not identif ied a basis for subcategorizing existing units at which flow reduction technologies are feasible . The effectiveness, availability , and utility to a given facility

of flow reduction or other entrainment reduction methods depends on site - specific geographical and biolog ical conditions as well as operations of the facility . For example, this is the reason that EPA did not select relocation of a shoreline intake to far offshore as a technology basis for the BTA entrainment standard because this technology is not widel y available for most facilities. 3. Impingement and Entrainment Standard s for New Units at Existing Facilities In contrast to existing units, installing a closed - cycle cooling s ys tem at a new unit is far less complex. The technology is also highl y effective , generall y achieving greater than 95 percent reductions in IM and E (mechanical draft (wet) cooling towers achieve flow reductions of 97.5 percent for freshwater and 94.9 percent for saltwater sources , or by operating the towers at a minimum of 3.0 and 1.5 cycles - of - concentration ,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 167 of 567 respectivel y) . These reductions in flow and the concurrent reductions in impingement and entrainment impacts are among the highest reductions in adverse environmental impact possible at an intake structure. 76 As described below, EPA has concluded that new units, in contrast to existing units, have much greater flexibility in terms of cooling s ys tem design, construction scheduling, and other factors that help minimize many of the negati ve aspects associated with closed - cycle cooling. For a more detailed discussion of this rationale, see below. Under the final rule, a new unit at an existing facility , where the facility that withdraws or will withdraw more than 2 mg d when the new unit begins operating will have requirements similar to the requirements of a new facility in Phase I. Under the rule, a new unit (as defined at § 125.92 (u) and described above) is required to have a flow limited to that which is commensurate with a closed - cycle recirculating s ys tem as it would be applied to the new unit. Today ’s final rule also includes an alternative approach (similar to Track II in Phase I ) , in which a facility could compl y with the new unit standards b y demonstrating that the technologies and operational measures employed will reduce the level of adverse environmental impact from any cooling water intake structure used to supply

cooling water to the new unit to a comparable level to that achiev able b y implementing a closed - cycle recirculating s ys tem as defined at § 125.92(c)(1) .

76 Note that these metrics are not explicit requirements for closed - cycle recirculating systems . They simply represent what EPA views as examples of characteristics of a properly operated and maintained closed cycle recirculating system , as defined at § 125.92(c) (1).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 168 of 567 As discussed above, today’s final rule defines a “new unit ” at an existing facility as a stand - alone unit the construction of which commences after the effective date of today ’s final rule . New unit includes stand - alone units that are added to a facility for purposes of the same general industrial operation as the existing facility . This is in contrast to the defi nition of new facility , where a new facility does not include new units that are added to a facility for purposes of the same general industrial activity (40 CFR 125.83). The provision “ for purposes of the same general industrial operation ” is explicitly i ncluded in today ’s final rule definition of new unit at an existing facility for clarity . A new unit may

have its own dedicated cooling water intake structure, or the new unit may use an existing or modified cooling water intake structure. An y unit at an e xisting facility

that does not meet the new unit definition in today ’s rule is subject to the existing unit provisions. EPA is adopting more stringent requirements for new units at existing facilities because such new units can be designed and constructed without many of the additional expenses and operational disadvantages associated with retrofitting an existing unit to closed - cycle cooling. For example, the incremental downtime that can be associated with retrofitting to closed - cycle cooling is avoided altogether at a new unit. In addition, when new units are added, the condensers can be configured for closed - cycle, reducing energy requirements (b y substantially reducing the turbine backpressure energy penalty) and associated air emissions . The three factors that led EPA to reject closed - cycle cooling as BTA (described below in Section E) are far less relevant for new units at existing facilities than for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 169 of 567 retrofitting existing units. This section discusses why EPA concluded that each factor is not a significant concern for new units, and why the record supports EPA’s conclusion that closed - cycle cooling is an available and feasible technology for new units at existing facilities.

 Land Availability : In contrast to retrofitting the entire existing facil ity , the amount of space dedicated to closed - cycle for the new unit will be limited to the new unit rather than the entire facility . As a result, space constraints will be much less of an issue . New units also present the opportunity to design an optimized closed - cycle recirculating s ys tem for the new unit. Retrofitting an existing facility for the full intake flow of the facility would require a facility to identify

(or possibly

obtain) enough space to accommodate the cooling towers and associated equipment. Furthermore, new units and their corresponding cooling s ys tem can be built in stages rather than as a facility- wide retrofit , and since the new unit has not yet been built, there is no energy reliability concern (discussed further below) .  Air Emissions: EPA expects that emissions are significantly less of a concern at new units. The condensers will be optimized for closed - cycle, reducing energy requirements, and high - efficiency cooling towers can be incorporated into the design of the new unit, potentially allowing for smaller cooling towers to be installed. Turbin e backpressure and the associated energy penalty can be substantially

reduced in a new unit, but EPA acknowledges new units will still have auxiliary

power consumption for fans. Th erefore energy penalties and air emissions for tower operations can be minimized (though not eliminated). The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 170 of 567 emissions effects of requiring closed - cycle cooling at new units at existing facilities is similar to the effects of this requirement at new facil ities and will not pose an unacceptable impact. For more information, see Chapters 6, 8, and 10 of the TDD. Further, the new unit is likely to be more efficient and emit less pollution than existing units, therefore net emissions are expected to decrease as new units replace older, less efficient units.

 Remaining Useful Plant Life: This is clearl y not an issue for new units. A new unit has its full useful life remaining and thus woul d experience the maximum possible reductions in adverse environm ent al impacts throughout that useful life. EPA does not expect that the requirements for new units at existing facilities will be a disincentive for facilities to repower existing units. The requirements only appl y to stand - alone units . Requirements for entrainment at repowered units will thus be determined b y the Director . EPA notes, however, f or facilities that do choose to repower an existing unit, the costs of employing a closed - cycle cooling sy stem are not a barrier, as described above. In fact, some facilities may find closed - cycle cooling to be less costly over the long - term. For example, in locations with limited water resources such that once - through cooling of an additional unit is not possible, overall reliability will be increased b y using closed - cycle cooling s ys tems. EPA also recognizes that installing closed - cycle cooling s ys tems at new units is a prevailing trend in industry , regardless of the regulatory requirements imposed by today ’s final rule. For example, see DCN 12 - 6672 in the record for today ’s rule, and DCNs 2 - 009*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 171 of 567 and 4 - 4023C (from the Phase I and Phase II dockets, respecti vel y). These documents show that, on the basis of responses from facilities to the 316(b) industry questionnaire, facilities constructed in recent ye ars are significantly more likel y to emplo y closed - cycle cooling. EPA recognizes that at some point in the future, every unit will be rebuilt, replaced or repowered (or retired) . EPA projects that approximately 227 MW in new generating capacity per year, will be subject to the new unit provision, reflecting the general industry

trend towards more efficient unit s. EPA’s anal ys is projects an equivalent number of new units at manufacturing facilities will be constructed each year. See the Phase I rule for more information regarding the affordability and barrier to entry

anal ys is for new construction. EPA notes that the new unit provision is an important element of the final rule, given the generally

long lifespan of equipment at industrial facilities. For example, generating units at a power plant are often projected to have a 50 - year lifespan. As a result, these fa cilities have a slow rate of “evolution” in adopting newer technologies. By requiring closed - cycle cooling in new units, EPA is ensuring (along with the Phase I rule) that no new once - through cooling units or facilities will be built . **E. Option Selection**  After considering all factors identified above, EPA has concluded that it should base the BTA impingement mortality standard for existing units on the performance of traveling screens (e.g . , modified Ristroph screens and equivalent modified traveling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 172 of 567 scre ens with fish - friendl y fish returns )

– the “best technology available” for minimizing impingement mortality . While there are a number of technologies that may perform as well as or better than traveling screens, these technologies were not feasible or available on a nationwide basis and thus were not the “best technology available” for standard setting purposes. Moreover, the impingement mortality standard for existing units provides a number of alternatives, including some of these other technologies, fo r compliance with the standard. EPA based the BTA impingement mortality standard for existing units on the performance of traveling screens because EPA concluded that this technology

is effective, widely

available, feasible , **77** and does not lead to unacceptable non - water quality

impacts. As explained above, EPA has not identified a technology or combinations of technologies that EPA concluded is “best technology available” for minimizing entrainment at existing units . EPA did not identify a technology for reducing entrainment that is effective , widel y available, feasible , and does not lead to unacceptable non - water quality impacts . As such, EPA is unable to identify a nationally

applicable BTA technology

on which to base the B TA entrainment standard . While EPA concluded that closed - c yc le recirculating s ys tems reduce entrainment (and impingement mortality) to the greatest extent and are the most effective performing technology , after careful consideration of multiple factors, EPA concluded that a closed -

77 As part of the feasibility determination, EPA found that the costs associated with the IM standards are reasonable for the industry as a whole.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 173 of 567 cycle recirculating s ys tem is not the “best technology available” for existing units within the meaning of the statute. It is not the best technology avail able on a national basis for minimizing adverse environmental impact and should not form the sole basis for the BTA standard for entrainment for the reasons explained below . EPA also determined that there w ere no other “available” technolog ies for entrainment whose performance came close to that of closed - cycle recirculating s ys tems. Further, while reduced intake velocity was a very effective control for impingement and may also reduce entrainment of some life stages of fish an d shellfish , it does not s ignificantl y reduce entrainment of eggs and non - motile stages of larvae, and it is not phy sicall y available in many locations. EPA has broad discretion in what factors it should consider when it determines the best technology

available for minimizing th e adverse environmental impacts of cooling water intake structures. As both the U.S. Supreme Court and the Second Circuit Court of Appeals have underscored , section 316(b) is “sui generis,” in a class by itself, unen cumbered b y “specified statutory factors,” Entergy Corp. v. Riverkeeper, Inc, 556 U.S. 208, 222 (2009); Riverkeeper, Inc. v. EPA, 358 F, 3d 174,187 (2d Cir. 2004). The Second Circuit explicitly

rejected the argument that, because section 316(b) does not mention costs or other factors , EPA cannot give costs or other factors “any” weight in deciding what is the best technology . Riverkeeper, Inc. , 358 F.3d at 195. Furthermore, the Second Circuit recognized that EPA may base its decision on factors other than the effectiveness of a given t echnology in reducing impingement and entrainment and that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 174 of 567 EPA is entitled to deference in deciding what weight to give to the factors it con siders in its BTA determination . Riverkeeper, Inc. , 358 F.3d at 196 . As noted, costs are one factor EPA may cons ider in its BTA determination. Here, while EPA did consider costs, costs were not a dispositive factor in the decision to reject closed - c ycl e cooling as the basis for a uniform national BTA entrainment standard. EPA did not reject closed - c ycl e cooling here either because it was not economically achievable or because the costs of closed - c ycl e would exceed its benefits. Instead, EPA rejected closed - c ycl e cooling as the technology basis for a uniform national BTA entrainment standard based on three factors: land availability , air emissions , and remaining useful plant life as explained below. Central to EPA’s evaluation of the availability of closed - c ycl e as BTA was EPA’s new under standing of the limitations of technologies other than closed - c ycl e in reduci ng entrainment. This presented EPA with a sharper choice than it had in the Phase II rule. For today ’s rulemaking, EPA took a second look at the data it had relied on in the Phase II rule , particularl y in light of new data received since the Phase II rul e . As a result, EPA learned that entrainment exclusion does not necessarily equate to entrainment survival (76 FR 22185), a key underpinning to EPA’s BTA standards for entrainment in the remanded Phase II rule . For the remanded Phase II rule, EPA had established national BTA performance standards for entrainment (and impingement) and included a number of different alternative means to achieve the standards. First, if a facility demonstrated that it could achieve reductions in flow associated with closed - c ycle cooling, the facility met the BTA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 175 of 567 performance standards. Alternativel y, a facility could demonstrate that it met the entrainment performance standards b y a combination of installed technology and operational or other measures (including restoration measures). S ee 69 FR 41590 for a description of the final Phase II rule. Critical to EPA’s decision to provide an array of choices for achieving the national BTA entrainment performance standards was a key factu al conclusion. That conclusion was that a number of technologies would achieve performance reducing entrainment that was “comparable” to that of closed - c ycle cooling. Consequently , for the Phase II rule, EPA established an entrainment performance standard of 60 to 90 percent based on data it reviewed for the Phase II rulemaking. See 69 FR 41598 for information on EPA’s rationale for establishing compliance alternatives as part of the final rule . In the Phase II rule, while EPA looked to the performance o f closed - c ycle as the benchmark against which it evaluated technologies for the BTA standards, EPA did not mandate the achievement of flow reductions that were in all cases equivalent to closed c yc le. Given that the available data support ed the view that there were other much less expensive technologies that obtained significant reductions in entrainment, EPA was comfortable with a BTA standard that require d achievement of a level of performance that was generall y comparable though not equiv alent to closed - c ycle. Since the Phase II rulemaking , EPA has received new data and learned that its understanding of entrainment technology performance was incomplete . Following the remand of the Phase II rule, EPA reexamined the data as well as new in formation on the performance of various entrainment control technologies it had previously reviewed. As*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 176 of 567 a result , EPA determined that its conclusion regarding the capability of these other technologies

– a conclusion on which the Agency had based the Phase II BTA performance standards

– was no longer supported by the data EPA had before it . There is a second additional consideration that further required EPA to focus renewed attention on how widely available closed - c ycle cooling in fac t was nationally . The Second Circuit decision in the Phase II rule removed restoration as a compliance option that EPA could consider. The decision underscored that restoration measures

– one compliance option included in the Phase II rule

– were not an available tool for complying with any 3 1 6(b ) standard. However, at the time of the Phase II promulgation, EPA expected some facilities would use restoration in lieu of closed - c ycl e cooling, thus making closed - c ycl e or reductions commensurate with closed - c ycl e feasible (76 FR 41609) . W ith the court decisions that restoration was not an available tool for compliance, compliance with a standard based on closed - cycle cooling alone is less feasible than EPA had expected at the time of the Phase II promulgation . The changed landscape has narrowed markedl y EPA’s range of options with respect to the technology basis for today ’s BTA standards. The gap between the performance of the most effective entrainment reduction technologies ( closed - c ycl e) and other less exp ensive technologies has widened significantly . EPA’s narrowed range of comp liance technology choice s required EPA to look even more closel y atthe feasibility of closed - c yc le cooling and reduced flow . As the Second Circuit has noted, EPA is clearl y entitled to make its choice among alternative BTA technologies based on more factors other than just a technology ’s effectiveness in reducing impingement and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 177 of 567 entrainment . Riverkeeper, Inc. , 358 F.3d at 19 6 . EPA identified three factors as significant in its decision to reject closed - c ycl e cooling as the sole technology basis for a national BTA entrainment standard . The three factors that collectivel y support rejecting closed - cycle cooling s ys tems as a un iforml y applicable BTA for existing facilities (except new units) are land availability , increased air emissions and remaining useful life. 1 . Land Availability and Geographical Constraints Could Be a Factor on a Local Basis While EPA’s record indicated that the majority of facilities have adequate available land to retrofit to closed - cycle cooling, some facilities have land constraints. 78 While EPA originally

estimated as many

as 23 percent of facilities would not have enough space, 79 it observed on site visits that some facilities with a small parcel of land could still install closed - cycle cooling by using creative engineering solutions. On the other hand, EPA found that some facilities with large acreage could not feasibly install c ooling towers because of local zoning or other local concerns. Thus, existing phy sical space at the facility

was not the only

factor contributing to uncertainty about land availability . Further review has shown that setback distances to mitigate noise and plume abatement (based on GPS mapping of residential areas) act as an additional constraint on

78 For example, in the case of fossil fuel facilities, scrubber controls may already have been required to comply with air rules and standards. This may reduce available land for closed - cycle. 79 EPRI reported at least 6 percent of sites it evaluated we re deemed “infeasible” because no space was available on which to locate a cooling tower . (DCN 10 - 6951) While EPA does not have access to the facility level data, EPRI’s report supports EPA’s conclusion that there is significant uncertainty around space constraints for facilities to install closed - cycle cooling.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 178 of 567 land available for retrofitting to closed - cycle , and the cost of acquiring new land may be prohibitive for some facilities . Consequently , EPA estimates that 25 percent or more of facilities might have one or more constraints on land availability that would limit the ability to retrofit for cooling towers for the entire facility . EPA lacks adequate support to indicate that land constraints can be accommodated at e xisting facilities. EPA also attempted to determine criteria based on the data in its record that would enable it to define a threshold for determining land availability on a nationwide basis, but was unsuccessful. For example, one analy sis explored a threshold of approximately 160 acres per GW ( gi gawatt) below which a facility could not feasibly

install cooling towers. Based on acres and the footprint of the facility and its surroundings (primarily those sites for which EPA conducted site visits), EPA f ound such an approach did no t accuratel y identify which faci l i ties could feasibly install closed - cycle. 2 . In creased Air Emissions Could Be a Factor on a Local Basis As previously

discussed, retrofitting closed - cycle cooling (without also repowering) wou ld result in increased air emissions of various pollutants, including particulates, sulfur dioxide, nitrogen oxides, mercury , and greenhouse gases, among others. 80 As a result of installing closed - cycle cooling structures, fossil - fueled facilities would nee d to burn additional fuel, thereb y emitting additional PM, CO 2 , SO 2 , NO X , and

80 EPA recognizes that retrofitting closed - cycle cooling could be combined with other energy efficiency or pollution control technologies with the net effec t of reducing air emissions; however, facilities could (and may be required to under other rules) install such technologies anyway, without converting to closed - cycle cooling.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 179 of 567 Hg . Two factors are responsible: (1) the need to compensate for energy required for operating cooling towers, and (2) slightly lower generating efficiency attributed to higher turbine backpressure when the condenser is not replaced with one optimized for close d cycle operation when retrofitting existing units (also referred to as the energy penalty). While both of these factors contribute to increased air emissions, the larger contributor to projected increased air emissions is by far the energy

penalty. The impact of the increased emissions varies according to the local circumstances. The increased emissions could consist of stack emissions from increased fuel usage, cooling tower emissions, and plumes of water vapor. EPA’s anal ys is suggested that the most si gnificant impacts would be increased PM 2.5 emissions , which are associated directly with an increase in human health effects . EPA notes that cooling plume abatement and drift elimination technologies exist to address cooling tower emissions (and EPA included costs for such technologies in its analy sis of Proposal Options 2 and 3) . Further, EPA expects most effects of the particulates from cooling tower emissions would be limited to the immediate vicinity , confined wholly to the facility property. (Se e DCN 10 - 6954.) Therefore, EPA’s primary concern is increased air emissions associated with additional fuel usage due to the energy penalty when retrofitting to cooling towers . EPA’s review of emissions data from E - GRID (year 2005) suggests that impacts f rom these pollutant discharges could be significant. These include the human health and welfare and global climate change effects

– all associated with a variety of pollutants that are emitted from fossil fuel combustion. EPA is not able to quantify the fr equency

with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 180 of 567 which facilities could experience these local impacts, and therefore has concluded that the proper forum to address such local impacts fully is in a site - specific setting. 3 . Remaining Useful Plant Life Could Be a Factor on a Facility Basis A number of facilities are nearing the end of their useful life. Considering the long lead time to plan, design, and construct closed - cycle cooling s ys tems, EPA determined that the Director should have the latitude to consider the remaining useful plant life in establishing entrainment mortality requirements for a facility. The remaining useful plant life, along with other site - specific information, will affect the entrainment reduction of closed - cycle cooling at a facility . For example, retrofitting to a clo sed - cycle sy stem at a facility that is scheduled to close in three ye ars will result in little entrainment reduction as compared to retrofitting to closed - cycle at a facility that will continue to operate for a significantly longer period . The Decision to Establish a National BTA Standard Requiring Site - Specific Determination of BTA Entrainment Controls Once EPA determined that a “one - size - fits - all” approach for entrainment for existing units is not generally feasible, it is appropriate to asses s the required controls on a site - specific basis. Therefore, for existing units, EPA decided to adopt as the BTA entrainment standard an overarching regulatory framework under which the Director will establish BTA entrainment requirements on a site - specif ic basis following prescribed procedures and applying specified factors for decision - making prescribed in the regulation and as described below.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 181 of 567 EPA concluded that site - specific proceedings are the appropriate forum for weighing all relevant considerations in establishing BTA entrainment requirements. Closed - cycle cooling is indisputably the most effective technology at reducing entrainment . Closed - cycle reduces flows b y 95 percent and entrainment is similarly highl y reduced. But given that EPA estimates th at 25 percent of existing facilities may face some geographical constraints on retrofitting closed - cycle cooling and concerns about air emissions and the remaining useful life of a facility , EPA rejected the option of requiring uniform entrainment controls based on closed - cycle cooling. Instead, EPA elected to adopt as the entrainment standard a more flexible process in which, following consideration of a host of factors, the Director will prescribe 316(b) entrainment conditions appropriate at a particular site. For additional discussion on how a site - specific consideration of entrainment control requirements will be implemented, see S ection VIII below. EPA has several reasons for adopting the framework approach as the BTA standard for entrainment. As explai ned, the record shows that though closed - cycle cooling is effective, it is neither widel y available nor feasible, and has significant unacceptable non - water quality impacts. While EPA cannot identify with precision the extent of these limitations on instal ling closed - cycle cooling s ys tems nationwide, the record indicates that the circumstances are neither isolated nor insignificant. Inlight of this, EPA decided not to establish closed - cycle cooling as a presumptive BTA entrainment standard , pending a site - specific demonstration of the limitations . In stead,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 182 of 567 entrainment control requirements will be determined in a site - specific setting where the opportunity

for local input in decision - making process will be maximized. With regard to new units at existing faci lities, b ased on the performance of properl y operated cooling tower operation and the availability , feasibility and affordability

of closed - cycle cooling at new units, EPA selected closed - cycle recirculating s ys tems based on wet cooling towers as BTA . F or a discussion of how the three factors (availability, feasibility and affordability) relate to new units , see Section VI .D.3 . Consistent with the Phase I rule for new facilities, EPA has also included a compliance alternative allowing a facility to show performance comparable to that of a closed - cycle recirculating s ys tem. The new unit provisions in to day ’s final rule are essentially

the same as the requirements for new facilities under the Phase I rule . **F .**  **Other Options Considered for Today’s Final Regulation** EPA considered several other options for the BTA standards in developing today ’s rule, but ultimately rejected them. This section includes a discussion of these options, as well as some technologies that EPA considered, but did not include as compliance alternatives to the impingement mortality standards .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 183 of 567 1. Proposal Option 4

—Flexible Impin gement Mortality Controls Similar to Final Rule at Existing Facilities with DIF of 50 mgd or more; BPJ Permits for Impingement Mortality

and Entrainment at Existing Facilities with Design Intake Flow between 2 mgd and 50 mgd; Site - specific Entrainment Stan dard for Existing Facilities with DIF of 50 mgd or more; and Uniform Impingement Mortality and Entrainment Controls for All New Units at Existing Facilities Similar to Final Rule At proposal, EPA’s preferred option was Option 1 , which was the option closes t to today ’s final rule, and the starting point for the description of the changes to the rule in S ection V above . At proposal, EPA also considered a variant of Option 1, called Option 4, which changed the impingement mortality requirements for facilities under 50 mgd from the performance standard in Option 1 to BTA as determined b y best professional judgment. In the case of an existing facility below 50 mgd that added a new unit, the flow associated with the new unit would have been subject to the uniform entrainment requirements based on closed - cycle cooling. Finally , all existing facilities withdrawing more than 2 mgd of DIF would have been subject to entrainment requirements established on a site - specific basis , with the exception noted above for new units. The option analyzed here, called Proposal Option 4, is likewise similar to the final rule, but for the impingement standard based on BPJ for facilities between 2 and 50 mgd. EPA ultimately

rejected Proposal Option 4 because EPA found that the technologies on which the impingement mortality performance st andard of today ’s final rule is based are available, feasible, demonstrated , and affordable for all regulated*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 184 of 567 fac ilities on a national basis. Moreover, EPA’s analysis showed that the difference in the total costs for the two options was nominal . Additionally , EPA notes that many facilities with a DIF under 50 mgd already use closed - cycle cooling and would have minimal burden under the final rule . These facilities would have no difficulty complying with the requirements EPA is establishing in today ’s final rule. Proposal Option 4, by not distinguishing between those facilities under 50 mgd that have already minimized adverse environmental impacts from those that have not, masks the actions that would have to be taken by

the latter group to comply with today ’ s final rule. In addition, the flexibilities introduced in the June 11, 2012 NODA and included in today ’s final rule applied to all facilities, rather than taking the Option 4 approach at proposal of providing for more Director discretion for only the smaller withdrawing facilities . EPA also concluded that the data collection activities required under the final rule will be more protective of threatened and endangered species because they provide information on a larger number of facilitie s than Proposal Option 4 for consideration by the Director in permitting decisions. Lastly , EPA acknowledges that Proposal Option 4 is more burdensome to permitting authorities than is the final rule, as it requires more case - bycase decision making.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 185 of 567 2. Proposal Option 2

—Flexible Impingement Mortality Controls Similar to Final Rule at All Existing Facilities that Withdraw over 2 mgd DIF; Site - specific Entrainment Standard for Existing Facilities with DIF at or below 125 mgd; Require Flow Reduction Commensurate with Closed - cycle Cooling by Facilities greater than 125 mgd DIF ; and Uniform Impingement Mortality and Entrainment Controls for All New Units at Existing Facilities As previously

explained, EPA assessed a number of different technologies that reduce impingement mortality and entrainment as the possible basis for section 316(b) requirements. EPA concluded that closed - cycle recirculating s ys tems (based on wet cooling towers) are the most effective technology for reducing impingement mortality and entrainment. Notwithstanding that conclusion, EPA has decided not to establish a performance standard for impingement and entrainment based on closed - cycle recirculating s ys tems for existing facilities. Furthermore, EPA found that there are no other effec tive technologies for entrainment that are available nationall y. As described previously , each of the three factors for rejecting closed - cycle cooling as BTA for entrainment would also apply in the case of Proposal Option 2, despite the smaller number of f

acilities that would be subject to a requirement to retrofit. The technology basis for entrainment mortality controls for facilities greater than 125 mgd DIF under this option would have been wet cooling s ys tems. The constraints discussed above that are associated with retrofitting a large portion of the universe of affected facilities, led EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 186 of 567 to conclude that requiring closed - cycle cooling on a uniform basis scale was not approp riate for a national regulation . EPA notes that it proposed multiple options that included closed - cycle , and solicited comment on all aspects of closed - cycle cooling . After fully considering all comments and data, EPA still finds closed - cycle cooling is not the “best technology available for minimizing adverse environmental impact” required by section 316(b ). Because of a combination of concerns over feasibility /availability , air emissions, and remaining useful life of the facility , EPA has rejected closed - cycle recirculating s ys tems as the basis for national impingement and/or entrainment controls. Nor is EPA able to identify a subcategory

for which these concerns no longer appl y . Moreover, the complex interaction of all of these factors at individual sites does not lend itself to other regulatory options that would require closed - cycle recirculating sy stems with an “off ramp” if any of the factors were shown to result in un acceptable impacts because this would create a presumption for closed - c yc le cooling rather than an equal balancing of all relevant factors . EPA decided not to establish any presumptive BTA entrainment outcome. EPA finds the entrainment standards framework in today ’s final rule wil l provide a consistent, more efficient, and more effective approach than standards with an “off ramp . ”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 187 of 567 3. Proposal Option 3

—Flexible Impingement Mortality Controls at All Existing Facilities that Withdraw over 2 mgd DIF; Require Flow Reduction Commensurate with Closed - Cycle Cooling at All Existing Faci lities over 2 mgd DIF Proposal Option 3 was, in many way s, the same as requiring closed - cycle cooling at all existing facilities. As described above, each of the three factors for rejecting closedcycle cooling as BTA for entrainment would apply with equal force for Proposal Option 3. As a result, EPA has concluded Proposal Option 3, similarly , is not appropriate as BTA for entrainment. 4 . Proposal Opti on 4 Variant EPA also considered a variant of Proposal Option 4 . As compared to Proposal Option 4, th is variant did not include flexible alternatives for compl yi ng with the BTA impingement mortality standards (including pre - approved and streamlined alternatives) , but did adopt the 50 mgd threshold to determine those facilities for which the Director has more discretion in determining BTA via BPJ . EPA anal yz ed this option to directly compare the effects of introducing flexible IM compliance alternatives at all facilities (as the final rule does) to the effects of introducing greater Director discretion for a subset of facilities, via BPJ permitting (as the Proposal Option 4 variant does). The preferred option at proposal , Option 1 , was estimated to be more costly than Option 4 (Option 1 was estimated to cost $384 annually as compared with $327 million annually for Option 4) . Under the anal ys is supporting the final rule the EPA is adopting today , however, today ’s final rule is estimated to cost $275 million annually in comparison with an estimated cost of $ 284 million annually for the Proposal Option 4 variant . Thus, EPA has*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 188 of 567 concluded that providing flexible alternatives for compliance with the BTA IM standard at all facilities is both more effective at reducing costs to society and more readil y justified as best technology available as compared to the approach of introducing greater Director discretion for only a subset of facilities (below 50 mgd). Hence , EP A rejected the Proposal Option 4 variant, and the approach of introducing greater Director discretion for only a subset of facilities (below 50 mgd) . 5 . Proposal Option 2 Variant EPA also considered a variation of Proposal Option 2 that would have used 125 mgd AIF rather than 125 mgd DIF as the threshold. However, as described above, EPA rejected Proposal Option 2 and, for the same reasons, rejected this variant of Option 2 . 6 . Sit e - Specific Approach to Addressing Impingement Many commenters (primarily

from manufacturing facilities ) commented that EPA should adopt a site - specific approach to addressing impingement mortality , similar to that employed for entrainment. As a result, EPA also considered an approach that would have established both impingement mortality and entrainment requirements full y on a site specific basis taking into account for the particular facility , among other factors, th ose previously

described as pe rtinent to EPA’s 316(b) BTA determination. EPA rejected a fully site - specific approach for impingement controls principally because low - cost technologies for impingement mortality are available, feasible, demonstrated , and affordable for facilities nat ionally . Because technologies are available, a fully site specific approach would place an unnecessary additional burden on state permitting resources . Moreover, the final impingement mortality standard includes several*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 189 of 567 alternatives that allow site - specific demonstration that a particular technology performs at a level representing the best technology available for the site . EPA is instead promulgating a modified version of the proposed rule, adding several elements of flexibility (i.e., compliance alternatives) , and thus directly addressing many of the concerns raised b y these comment er s. 7 . Pre - approved Technologies Many commenters requested that EPA pre - approve technologies that , once i nstalled , would obviate the need for further regulatory conditions such as periodic monitoring. This i s similar to the approach taken for cylindrical wedgewire screens in the remanded 2004 Phase II rule (see 69 FR 41693 ). EPA has adopted, in s ignificant measure, commenters’ suggestion in the BTA impingement mortality standard in today ’s rule by including several pre - approved and several streamlined compliance alternatives in the form of technologies that may be approved following a demonstration of required performance , so long as the facility shows that its alternative technology is operating in a manner that minimizes adverse environmental impacts . As an option for achieving the impingement mortality

standard s , a facility may install and operate specified impingement controls whose performance is comparable to or better than the technology EPA concluded was the “best technology available” for impingement mortality re ductions :  Closed - cycle recirculating s ys tems , defined at § 125.92 (c)

 Existing offshore velocity caps , defined at § 125.92 (v)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 190 of 567  Technologies that result in a design intake velocity less than or equal to 0.5 fps , including most modern cylindrical wedgewire s creens Although this rule leaves the BTA entrainment determination to the Director, with the possible BTA decisions ranging from no additional controls to closed - cycle recirculating sy stems plus additional controls as warranted, EPA expects that the Director, in the site specific permitting proceeding, will determine that facilities with p roperl y operat ed clo sed - cycle recirculating s ys tems do not require additional entrainment reduction control measures . Refer to Section E.1 for the EPA’s rationale for selecting these controls. **G .**  **Final Rule BTA Performance**  **Standards** The rule establishes the following BTA standards for Impingement Mortality and Entrainment: Impingement Mortality Standard s at All Existing Units at Existing Facilities that w ithdraw greater than 2 mgd DIF; an Entrainment Standard that requires s ite - s pecific entrainment c ontrols determined by the Director for Existing Units at Existing Facilities that w ithdraw over 2 mgd DIF; BTA standards for impingement mortality and entrainment for new units at existing facilities . The previous section describe d the other options that EPA considered but ultimately rejected , and the basis for those decisions . 1. Impingement Mortality Controls for Existing Units at Existing Facilities for the Final Rule. Today ’s final rule provides a facility a number of alternatives for compl yi ng with the BTA impingement mortality standard . As discussed more below, EPA’s BT A impingement mortality standard is based on EPA’s conclusion that , on a national basis, modified traveling screen s with fish - friendl y return systems are the best performing*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 191 of 567 technology

available for impingement mortality reduction . B ut EPA is not requiring compliance with the BTA impingement mortality standard s onl y through monitoring data that demonstrates achievement of the numeric reduction in mortality levels that EPA has determined well - operated modified traveling screen will achieve . Rather, th e final rule allows f acilities to comply by

employing any of se ven alternatives , in cluding monitored compliance with a numeric impingement mortality performance standard . Based on its review of available data and information submitted by commenters , EPA identified a number of other technologies and operational measures that could achieve equivalent, or better, performance to the impingement mortality reductions achieved with modified traveling screens that may be available for some sites . Thus, the final rule provides seven alternative s for compl yi ng with the BTA imping e ment mortality standard s . These include three compliance paths based on pre - approved technologies, and three compliance paths that offer a streamlined approach to compliance. EPA expects the majority of facilities will use one of the se six options to comply with the BTA impingement mortality

standards (see Exhibit VII I - 1 for more inform ation) . The following pre - approved technologies will comply with today ’s rule and are associated with minimal monitoring and rep orting of operational and/or design parameters . These technologies are (the numbering reflects the numbering in § 125.94(c)) : operating ( 1) a closed - cycle recirculating sy stem ; ( 2 ) a cooling water intake structure th at EPA or the State NPDES permitting authority determines has a design maximum through - screen intake velocity of 0.5 feet per second ; or ( 4) an existing offshore velocity

cap . The general intent behind a compliance path based on a pre -*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 192 of 567 approved technology

is to provide a level of certainty to the regulated entity

that they would be deeme d compliant with the relevant rule requirements by designing, installing, and operating the technology as specified in the regulation . The three pre - approved compliance alternatives are each based on a particular technology approach . The permit for each compliance alternative will necessarily include criteria, design standards, and operational conditions specific to the pre - approved technology . The compliance paths based on pre - approved technologies in today ’s final rule include si mplified permit application requirements ( such as reduced or minimal study) , documentation, or reduced monitoring, and will therefore result in greatl y simplified implementation . Intoday ’s final rule, there are no biological compliance monitoring req uirements for any

of the three compliance paths based on pre - approved technologies. Under the streamlined alternatives , a facility must demonstrate to the Director that traveling screens or some combination of technology controls or operational measures represent BTA performance under the conditions at the site. The three streamlined compliance alternatives are (the numbering reflects the numbering in § 125.94(c)) operating ( 3) a cooling water intake structure that EPA or the State NPDES permitting authority determines has an actual maximum through - screen i ntake velocity of 0.5 feet per second; ( 5 ) modified traveling screen s whose demonstrated performance represents the best technology

available for impingement reduction at the site ; or ( 6 ) a sy stem or combination of technologies or operational measures whose demonstrated performance is the best technology

available for impingement reduction at the site. In order to demonstrate BTA performance , a facility will need to conduct a two - ye ar site - specific*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 193 of 567 study at the same time it conducts its source water characterization and Entrainment C haracterization S tudy . This study must demonstrate that its modified traveling screens , or combination of technolog y co ntrols and operational measures , have been adjusted and optimized so as to minimize impingement mortality . If the Director concludes that the facility has demonstrated optimized performance for its controls , the facility will h ave no subsequent biological monitoring and reporting requirements as compared to a facility that complies using the impingement mortality performance standard . If the screens or other measures are not already installed, the Director may approve postponing the two ye ar study

to be conducted after the entrainment determination has been made. These three streamlined compliance alternatives are based on a technology or suite of technologies and practices with more variable performance, and as such necessitate some degree of study, in order to optimiz e technology performance for the site - specific conditions encountered by a f acility. A streamlined compliance alternative may require some level of monitoring, but once the optimal performance of the technology has been identified, conditions included in the permit specifyingoptimal operation ensure that the streamlined alternati ve is similar to or better than the impingement mortality performance standard . For example, the streamlined compliance alternatives also do not require biological compliance monitoring. The seventh alternative (at § 125.94(c)(7)) for complying with the BTA impingement mortality

standard s requires the owner or operator to demonstrate compliance with the numeric impingement mortality performance standard through biological mo nitoring . Under this alternative, the owner or operator has the flexibility to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 194 of 567 choose any technology, including a new or innovative technology, provided the compliance monitoring demonstrates the performance standard is achieved. Each of these seven alternatives is further described below. In addition, f urther discussion of how each of these alternatives will be implemented may be found in Section VI I I. a. Closed - Cycle Recirculating Sy stems As described above, in Chapter 6 of the TDD, and in prior rulemakings, EPA has long recognized the benefits of flow reduction from closed - cycle recirculating s ys tems for reducing impingement ( as well as entrainment). A facility employing a closed - cycle recirculating sy stem will ty picall y red

uce impingement by

more than 95 percent. As a result, a facility

may choose to comply

with the BTA impingement mortality standard s in today ’s final rule by

demonstrating that it uses a properl y operated and maintained closed - cycle recirculating sy stem. EPA estimates that approximately 18 percent of intake structures (i.e., those that already have an existing closed - cycle recirculating sy stem, plus facilities located in California and New York, whose State regulations are at least as stringent as the final r ule) will choose this alternative. EPA does not have the data to de termine precisely which impoundments are serving as part of a closed - cycle recirculating system as define d at 40 CFR 125.92 (c)(2) . However, EPA is aware that some facilities have created their impoundments in a water of the U . S as part of their cooling sy stem. EPA does not intend to eliminate the use of such lawfull y created i mpoundments for their intended purpose, as doing so could result*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 195 of 567 in a large number of stranded assets. If the cooling s ys tem with the impoundment minimizes the withdraw al of make - up water for cooling purposes, the Director may determine the cooling s ystem meets the definition of a closed - cycle recirculating sy stem. b . Reduced Intake Velocity EPA has long recognized the relationship between impingement and intake velocity . EPA conducted an anal ys is of fish swim speeds in the Phase I rule (see 66 FR 65274 , December 18, 2001 ) and concluded that a design through - screen velocity of 0.5 fps is protective of 96 percent of motile organisms. However, EPA did not select intake velocity as the technology

basis for the BTA impingement mortality standard s . A lthough the performance of 0.5 fps intake velocity achieves greater reduction in impingement mortality than the technology on which the BTA impingement mortality standard s are based , reducing a facility’s intake velocity is not widely available or feasible for all existing facilities (see Chapter 6 of the TDD). EPA is including reductions in intake velocity as an alternative for compl ying with the BTA impingement mortality standard s through reduced intake velocity . A facility choosing this alternative must demonstrate that (1) the through - screen design velocity could not exceed 0.5 fps or (2) the actual intake velocity does not exceed 0.5 fps. EPA estimates that approximately 34 percent of intake structures will choose this alternative. This estimate includes facilities that have an existing intake velocity of 0.5 fps or less, plus those facilities that are projected to install a technology that would reduce their intake velocity (larger intake, wedgewire screens, or variable speed pumps). i. Design Intake Flow Basis*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 196 of 567 Consistent with EPA’s determination in its earlier 316(b) regulatory eff orts , the final rule allow s a facility to compl y with the BTA impingement mortality standard s by demonstrating that its intake has a maximum through - screen design velocity of 0.5 fps . EPA concluded that facility ’s operating at this through - screen design ve locity will protect the vast majority

of impingeable aquatic organisms . Facilities choosing to comply with the BTA impi ngement mortality standard s m ay not average velocity across multiple intakes at a facility . ii. Actual Intake Flow Basis EPA is also adopting a provision to allow facilities to demonstrate that the through - screen intake velocity at an intake structure does not exceed 0.5 fps on the basis of the intake’s actual flow. (Again, note that facilities choosing this compli ance alternative may

not average intake velocity across multiple intakes.) Incontrast to design flow above , a facility

with an intake having a design through - screen intake velocity greater than 0 .5 fps may

be operat ed at a reduced capacity and therefore may withdraw cooling water at a velocity less than 0.5 fps. As long as the actual intake flow is such that the velocity

remains at or be low 0.5 fps , the reductions in impinge ment (and subsequently , impingement mortality) remain the same as a facility with a maximum design through - screen intake velocity of 0.5 fps . As described below, a facility will be required to monitor its intake flow and report this data to the Director to verify that intake flows do not exceed 0.5 fps. This approach also permits the Director to allow brief periods where the intake velocity will exceed 0.5 fps under extreme conditions . c . Existing Offshore Velocity Caps*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 197 of 567 A number of commenters stated that EPA should consider existing offshore intakes fitted with velocity caps to be pre - approved and complying with the BTA impingement mortality

standard s . Locating submerged intakes in the deeper regions of larger wat erbodies (particularl y outside the littoral zone 85 ) has the potential to reduce both impingement and entrainment (I&E), due to the lower densities of aquatic organisms as compared to a shoreline - based intake. EPA has identified 11 facilities with offshore v elocity caps, and reviewed a number of studies documenting the performance of these facilities . These studies show that the impingement reduction performance of intakes submerged far offshore with velocity caps is dependent on site - speci fic conditions. The data show that solel y locating an intake far offshore (i.e., without also employing a velocity cap) achieves a 60 to 73 percent reduction in impingement, and therefore does not achieve impingement mortality reduction comparable to that of well - operated modified traveling screens . Similarly, the data also show that velocity caps alone achieve a 50 to 97 percent reduction in impingement, and therefore could result in compli ance performance comparable to or better than modified traveling screens in some , but not in all cases. However, the combination of an existing intake located far offshore (i.e., approximately 850 feet , as identified in the data for Nine Mile Unit 1 and Oswego Unit 5 ) in combination with use of a velocity cap will result in performance that exceeds the 12 - month average impingement mortality performance standard (alternative seven described

85 The littoral zone extends from the shoreline to roughly the edge of the continental shelf .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 198 of 567 above) . 86 , 87 Because there is some amount of uncertainty in measuring distances from a shoreline, including but not limited to due to variations in water levels, storm swells, or tidal excursions, EPA has set the minimum distance offshore at 800 feet. As a result, the final rule at § 122.95(c)(4) allows a facility to comply

with the BTA impingement mortality standards with an existing offshore intake with an existing velocity cap located at least 800 feet offshore, based on the performance data from the 11 identified facilities . As noted above, the record shows all existing facilities with a velocity cap located at least 800 feet offshore will meet or exceed the 12 - month average mortality performance standard of 125.94(c)(7) . EPA does not have data showing velocity caps located at lesser distances offshore will consistently achieve the impingement mortality performance standards, but is aware that some facilities may be able to achieve the impingement mortality

standards thro ugh a combination of technologies that includes an offshore location. For example, the Office of Naval Research states that the littoral zone in ocean environments generall y extends from the shore to 600 ft out in the water (ONR 2013). SEAMAP data in EPA’s record shows installing the intake to depths where there is a lower concentration of living organisms (i.e., at least 65 feet) is also expected to decrease environmental impacts associated with intake operations. Therefore, the final

86 An existing facility may also choose to install a new offshore intake with a velocity cap, but such a facility would not automatically qualify as meeting the impi ngement requirements for the final rule. Such a facility would need to demonstrate equivalent performance to the impingement mortality performance standard. 87 A velocity cap must also include bar racks or other devices to exclude large marine organis ms (e.g., seals, turtles) from entering the intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 199 of 567 rule allows facilitie s with intake structures at significant distances offshore to demonstrate the performance of their technology under § 122.95(c)(6), as further discussed below. In addition facilities may opt to construct an offshore velocity cap at new locations . Inthose circumstances, the facility will need to demonstrate that theperformance of its velocity caps is the best technology available for impingement reduction under the alternative found at § 122.95(c)(6) . For more information, see DCN 12 - 6601 . EPA estimates that approximately 1 percent of intake structures (i.e., those with an existing velocity

cap meeting the definition at § 125.92 (v ) will choose this alternative. d. Install Modified Traveling Screens In the June 11, 2012 NODA, EPA discussed a streamlined compliance option that would provide facilities with a less burdensome alternative than the proposed rule. In the final rule, EPA has included an option at §125.95(c)( 5 ) for faci lities that install traveling screens – the technology

that forms the basis for the numeric IM performance standards . Under this option, the facility must demonstrate to the Director that it will install and operate modified traveling screens as defined at 125.92(s) that are or will be optimized to minimize IM mortality atthe site. The facility will also be required to submit an impingement technology

performance optimization s tudy ( § 1 22.2 1(r)(6)) which will include a 2 - ye ar optimization study for the intake technology . The facility will conduct 2 ye ars of monthl y impingement data collection , during which the facility will seek to optimize the technology

performance t o minimize impingement mortality . This study is*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 2 00 of 567 intended to determine the optimal configuration and operating conditions of modified traveling screens and the fish handling and return sy stems for that intake to be consistently

protective of aquatic organis ms. During the course of the study , EPA expects that a facility will evaluate the interim results and make changes to the technology or operating conditions as needed to identify the most appropriate set of operational characteristics to ensure long - term s uccess. For example, a facility could adjust the spray wash pressure , adjust the rotating speed of the screens, rotate the screens more frequently , re - angle the fish sluicing spray s, ensure adequate water in the return flume, design the fish return to avoi d avian and animal predation on the aquatic organisms, and locate the fish return in such a way

to avoid predation. Once a facility has optimized its technology performance , the study will identify operational measures that will serve as observable and enf orceable permit conditions . As evidenced by the data used in determining the performance standard , by requiring facilities to study the conditions for optimized performance, many facilities will achieve impingement mortality reductions much greater than the 12 - month average impingement mortality performance standard without significant additional investment . B iological data collection beyond this two - ye ar study w ill not be required . The facility will simply

be required to ensure that it is operating its technology

under the identified conditions for optimiz ed performance . If the Director concludes that the screens will achieve optimized performance, the Director w ill also incorporate operating conditions to ensure optimized performance as terms of the facility ’s NPDES permit.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 201 of 567 As discussed in the NODA and Chapter 4 of TDD, EPA’s data indicate that most facilities employ

traveling screens . 88 EPA anticipates that, as a result, many facilities will view the streamlined screen - based compliance route as a logical choice for complying with the final rule. The streamlined option provides an opportunity for a large number of the affected facilities (i.e., those that do not meet the criteria for the other compliance technologies) to demonstrate that their intakes are effectivel y reducing i mpingement mortality while significantly

reducing the burden on both facilities and regulatory agencies. EPA estimates that approximately 30 percent of intake structures will choose this alternative. 89 EPA is aware that some facilities have no technologies installed and will choose to install modi fied traveling screens, and further that some facilities with traveling screens will choose to either retrofit to modified traveling screens with fish handling and returns. Obvio u sly , the impingement technology performance optimization study cannot be undertaken until the technology is first installed. Inthis case the NPDES permit would be issued before the completion of the optimization study . EPA expects a permit will be issued that includes a schedule for both the technology installation and the require d

88 EPA’s technical survey found that 93 percent of electric generators and 73 percent of manufacturers already use screens, the majority of which are traveling screens. 89 While EPA’s data shows 7 3 to 93 percent of facilities already use traveling screens, EPA notes that many facilities use more than one technology. For example, some of these facilities also have a low intake velocity, an offshore velocity cap, or cooling towers. EPA expects facili ties will choose the IM compliance alternative corresponding to these pre - approved technologies before they will choose to comply via optimized performance of their traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 202 of 567 optimization study . As discussed earlier, the Director can establish interim measures as appropriate (40 CFR 125.94(b)). e . Sy stem of Technologies as the BTA for Impingement Mortality EPA recognizes that cooling water intake structures have a variety of configurations and facilities may choose to comply with the final rule by

using more than one of the compliance approaches outlined above. In the June 11, 2012, NODA, EPA described an ap proach where facilities would be able to demonstrate “credit” toward meeting the impingement mortality requirements by

reducing the total number of organisms impinged. EPA also intend ed for facilities to have the flexibility to employ any sy stem of technol ogies or combination of operational measures to address impingement mortality so long as the performance of the selected impingement reduction measures represented the best technology available for the site . The final rule includes an alternativ e reflectin g these objectives. In the broadest sense, facilities have a number of options for reducing impingement mortality . Some may choose to comply using an approach where a single technology

achieves the level of compliance necessary . Others may choose an approach of employing multiple technologies or operational measures , including reducing the number of organisms that are impinged or susceptible to being impinged. The following are examples of approaches for which a facility might be able to take credit for impingement reduction under this alternative :  Partial closed - cycle cooling

 Variable speed pumps*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 203 of 567  Seasonal outages (including standard maintenance outages that are specifically scheduled to avoid a biologically sensitive period)

 Certain impingement technologies that reduce the number of organisms exposed to the intake structure (e.g., diversions, louvers, barrier nets)

 Intake location

 Behavioral technologies (e.g., light or sound barriers) 90 In each case, the technology employed reduces the number of organisms that potentially

are impinged, resulting in a reduction in the number of organisms actually impinged (i.e., a reduction in the rate of impingement). By virtue of reducing the actual impingement, mortality

caused by

impingement is no longer a consideration

—an organism that is never impinged cannot be killed by the intake structure. Some technologies work to reduce the intake flow, thereby reducing the potential organisms exposed to the intake. Others work to divert organisms aw ay from the screens, either through a ph ys ical exclusion or by being placed in a less biologically productive area. EPA concluded that it is appropriate to recognize these reductions in impingement as a step in achieving a BTA impingement mortality reduction performance at a particular site . As a result, EPA expects the reduction in impingement will be treated as an

90 For example, anadromous clupieds such as alewife, blueback herring , an d American shad have demonstrated avoidance behaviors when exposed to high frequency sound. Deployments of this technology at Entergy’s FitzPatrick Nuclear Station on Lake Ontario have resulted in a reduction of over 90 percent in im pingement of alewife. In this case, EPA expects the Director would determine th at impingement requirements regarding alewife have been addressed by the acoustical deterrent. The Director could disallow such a technology if it were deemed to have a ne gative effect on threatened or endangered species whose habitat includes the facility’s intake location.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 204 of 567 equivalent reduction in impingement mortality, and will therefore be considered by EP A or the State NPDES permitting authority in evaluating whether the chosen technolog ies and operati onal measures represent BTA performance under the site ’s conditions . For example, an intake that operates infrequentl y due to the infrequent operation of the electric generating unit(s) it serves (such as a peaking unit) may use a relatively

small amount of water on an annual basis when compared to the design capacity of th e intake structure. This facility

may choose to compl y with the impingement mortality standard at (c)(6) b y demonstrating to the Director that the facility operates at an annual intake flow that is less than or equal to 24 percent of its design intake flow on an annual basis. This level of flow reduction could achieve a level of performance equivalent to or better than the impingement mortality performance standard in (c)(7), and therefore could be considered to be compliant with the requirements of today ’s final rule. This demonstration may

include design data, several years of past operating data, and dispatch modeling. These operating conditions would then be incorporated into the NPDES permit . A facility

complying under this part, must submit a impingement technology performance optimization study, which must include the calculated percent impingement mortality reflecting optimized operation of the sy stem of technologies, operational measures, and best management practices and all supporting calculations. Total sy stem performance is the combination of impingement mortality performance reflected in all of the following which apply :*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 205 of 567  Rate of impingement

– The estimated reductions in rate of impingement must be based on a comparison of the sy stem to a once - through cooling sy stem with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source waterbody. For impoundments that include waters of the United States, the facility ’s rate of impingement must be measured at a location within the cooling water intake sy stem that the Director deems appropriate.

 Impingement mortality

– If the demonstration relies in part on a credit for reductions in impingement mortality already obtained at the facility , two ye ars o f biological data collection must be provided, demonstrating the level of impingement mortality the s ys tem is capable of achieving.

 Flow reduction

– If the demonstration relies in part on flow reduction to reduce impingement, the data must include two years of intake flows, measured daily , as part of the demonstratio n . This must include documentation of how the flow reduction results in reduced impingement. The permitting authorities would consider this information shown in the two - ye ar impingement technology

performance optimization study that must be submitted under this alternative . For example, at facilities choosing to comply by demonstrating that they are operating below 24 percent of their intake capacity , or that they are peaki ng units, the Director should use this study to establish operating conditions that ensure that the intake continues to operate below 24 percent of its intake capacity or continues to serve onl y*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 206 of 567 peaking units and that these units are not later used as intermediate or baseload units. The operating conditions and parameters identified in the study will then be incorporated in the facility ’s permit conditions. EPA estimates that approximately 17 percent of intake structures will choose this alternative. f . Comply with the Numeric Impingement Mortality Performance Standard F acilities compl yi ng with the BTA impingement mortality standard by achieving the numeric performance standard at § 125.94(c)(7) will perform monthly compliance monitoring to verify

that the 12 month percent impingement mortality resulting from operation of its intake is below the standard established in today ’s final rule. (For more details on complying with the impi ngement requirements, see S ection VIII .) EPA expects that, save for future technologies or innovations, few facilities will avail themselves of this option. 2. Entrainment Controls for Existing Units at Existing Facilities The BTA entrainment s tandard for the final rule establishes a framework under which EPA or the State NPDES permitting authority must establish site - specific BTA entrainment requirements for each facility in the scope of today ’s rule . EPA co nsidered promulgating no further controls to address entrainment mortality , and to rely instead only on the BTA impingement mortality controls, which would achieve up to a 34 percent reduction in total AEI. EPA did not select this option as the basis for national BTA because , in EPA ’s view, some facilities either are having a significant impact as a result of entrainment or might be able to do more to control entrainment at costs that are low relative to benefits. In addition, EPA’s data on entrainment at facilities are not*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 207 of 567 sufficient to allow the Agency to categorize facilities requiring no additional controls for entrainment . Thus, the final rule by requiring prescribed information in the permit application will p rovid e the Director with adequate information for decision making. Requiring a structured site - specific anal ys is of candidate BTA technologies for entrainment control will allow the Director to determine where it is appropriate to require such controls. O ne outcome of the site - specific analy sis could be that the Director would determine that no other technologies beyond impingement control s are required for BTA entrainment reductions , either because they are not feasible or because the social costs of additional control measures are not justified b y the social benefit s . In the case of site - specific entrainment controls for facilities withdrawing greater than 125 mgd AIF, the final rule requires facilities to also develop and submit an Entrainment C haracterization S tudy and related sup porting information, as described in § 122.21(r)(9) - (13) of today ’s rule, for use by the Director in establishing site - specific BTA. For facilities above 125 mgd AIF that also meet the defini tion of closed - cycle recirculating s ys tems at § 125.92(c), the Director may reduce or waive some or all of this information. EPA considered simply

requiring this information of all facilities above 125 mgd AIF without authorizing Directors to reduce or waive this information. However, EPA also recognizes that, in some instances, these same facilities have already minimized adverse environmental impacts significantly . In such cases, there may be limited value to the Director requiring a full benefit - cost anal ys is, or even obtaining the Entrainment Characterization S tudy

at (r)(9).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 208 of 567 EPA also considered not requiring this information of any facilities above 125 mgd AIF meeting the definition at § 125.92(c). First, EPA noted that even though these facilities meet the definition of a closed - cycle recirculating s ys tem, they may still withdraw at least 125 mgd , and in some instances withdraw considerabl y more than 125 mgd . This is not an insubstantial volume of water withdrawn for cooling, and in the case of inland waters this withdrawal may comprise a large proportion of that source waterbody. In addition to withdrawing large volumes of water, EPA recognizes that some facilities, particularl y those meeting the definition at § 125.92(c)(2), potentially withdraw water at a rate similar to a once - through facility not withdrawing from an impoundment, with the potential to cause adverse environmental impacts similar to those of once through cooling. The Director may find the information in § 122.21(r)(9) - (13) to be useful in determining whether additional controls are warranted. In these instances, the Director may

decide to require the Entrainment Characterization Study at (r)(9) first, in order to determine if other studies in (r)(10) to (13) are also warranted. Facilities at or under the 125 mgd AIF threshold must still provide certain information under the permit application requirements at § 1 22.21(r) . The Director may require additional information from these facilities including some or all of the studies at § 1 22.21(r) (9) - (13) if there is reasonable concern regarding entrainment impacts at the facility . Where an owner or operator of a facility intends to comply with the BTA standards for entrainment using a closed - cycle recirculating s ys tem as defined in § 125.92(c) , the Director may reduce or waive some or all of this information.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 209 of 567 Facilities with a closed - cycle recirculating s ys tem as defined at § 12 5.92(c)(2) would still submit the studies at § 122.21(r)(9) - (13 ) if they withdraw greater than 125 mgd AIF , and if the Director has not waived the requirements . These facilities have cooling sy stem s that include impoundments of waters of the U.S. where the impoundment (s) was constructed prior to [ **INSERT effective date of the final rule** ] and lawfully created for the purpose of serving as part of the cooling water sy stem . This purpose must be documented to the Dire ctor's satisfaction in the project purpose statement of any required Clean Water Act s ection 404 permit obtained to construct the impoundment. In the case of an impoundment whose construction pre - dated the CWA requirement to obtain a s ection 404 permit , wh ere alternative permitting documents were required, the facility must document the project’s purposes to the satisfaction of the Director b y some other license or permit obtained to lawfully construct the impoundment for the purposes of a cooling water s ys tem . EPA notes that for impoundments constructed in uplands or not in waters of the United States , no documentation of a s ection 404 or other permit is required . EPA received comments that such impoundments should be treated as closed - cycle cooling and h as agreed to make this change. The Director would still make the determination that make - up water withdraws have been minimized. Further, EPA’s data shows that many facilities that utilize impoundments as part of their cooling water sy stems may actuall y use a combination of cooling water sy stems (for example, detailed survey responses showed eight facilities with an impoundment in addition to other IM technologies) . The requirement that these facilities provide the Director with certain information will help ensure that the Direct or has*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 210 of 567 adequate information upon which to base a decision for these impoundments as to whether these facilities have adequate controls already or should be taking additional measures to protect the relevant waterbody.

The Entrainment Characterization Study will include information already collected to meet existing § 1 22.21(r)(4) requirements. In addition, under the permit application requirements being added today at § 1 22.21(r)(5 ) to ( 1 3 ), the facility will submit certain additional site - specific information. This will include an engineering study of the technical feasibility and incremental costs of candidate entrainment mortality control technologies. The facility will also study , evalu ate, and document the technical feasibility of technologies, at a minimum, including closed - cycle cooling, fine mesh screens with a mesh size of 2 mm or smaller, and water reuse or alternate sources ; engineering cost estimates of all technologies considered; any outages, downtime, or other effects on revenue along with a discussion of all reasonable attempts to mitigate these cost factors; and a discussion of the magnitude of water quality and other benefits, both monetized and nonmonetized, of the candidate entrainment mortality reduction technologies evaluated. F inally , the information must include a discussion of the changes in non - water quality environmental impacts attributed to technologies and/or operational measures considered . The factors include, for example, increases and decreases in the following: energ y consumption, and air pollutant emissions including particulates and associated human health and global climate change impacts, water consumption, noise, safety (e.g., visibility of cooling tower plumes, icing), grid reliability, and facility reliability . For a thorough discussion of these study requirements, see Section VIII . The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 211 of 567 final rule also requires peer review of the Comprehensive Technical Feasibility and Cost Evaluation Study , Benefits Valuation Study , and Non - W ater Quality and Other Impacts Ass essment. P eer review of the Entrainment Characterization Study is not required. Note that the peer reviewed studies will rely on data gathered in the Entrainment C haracterization S tudy . Peer reviewers will be selected in consultation with the Director, who can also consult with EPA and F ederal , State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by

the cooling water intake structure(s). Under the final rule, EPA expects that the Director will review the candidate technologies for entrainment mortality control that, at a minimum, includes closed - cycle recirculating s ys tems , fine - mesh screens with a mesh size of 2 mm or smaller, and water reuse or alternate sources . Inthe decision about what additional entrainment controls (if any) to require, the Director will consider all the facility- specific factors in § 125.98(f)(2) and described above. At a minimum, the Director must provide a discussion explaining how issues concerning air emissions or land availability, insofar as they relate to the feasibility of adoption of an entrainment technology , and remaining useful plant life, were addressed in the site - specific determination. Under the final rule, the Director must issue a written explanation for the basis of the BTA entrainment determination for each facility . The Director’s decision must include a wr itten explanation that , at a minimum, include s consideration of the following factors : (i) numbers and types of organisms entrained; (ii) i mpact of changes in particulate emissions or other pollutants associated with entrainment technologies; (i ii) l and availability inasmuch as it relates to the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 212 of 567 feasibility of entrainment technology ; (iv) remaining useful plant life ; and (v) social costs and benefits, which may

include qualitative, quantified and monetized categories . The Director may

also b ase the proposed determination on several other factors, including thermal effects and water consumption . In addition to the information required for development of impingement controls discussed above , the regulation also requires , in the case of facilities withdrawing greater than 125 mgd AIF, submission of certain other information for use in the site - specific entrainment deter

mination of BTA . The final rule also adds the permit application requirements at § 122.21(r) (9) - (13) to require the facility to prepare several studies, including an Entrainment Characterization Study, that will fully characterize the extent of entrainment at the facility. (For more details about the study , see above ). In addition, under the final rule, the facility will provide detailed information on the other factors relev ant to the Director’s site - specific BTA determination. These will include information concerning the technologies available for control of such entrainment, the costs of controls, the non - water quality environmental impacts of such controls, the monetized and nonmonetized benefits of such controls, and the presence of any threatened and endangered species. The final rule does not limit the Director’s discretion to cons ider non - water quality impacts in determining whether further entrainment measures are justified. EPA encourages, and the CWA requires, the public to have a role in the permitting process . Interested members of the public may submit written comments on a draft permit during the 30 day public notice and comment period and request a public hearing on a draft permit. For permits that are issued b y EPA instead of a state,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 213 of 567 additional opportunities for public involvement include comment, and in some cases, a pub lic hearing on a permitt e e’s State Water Quality Certification under s ection 401 of the CWA. (See 40 CFR 124.10, 124.11, 124.12(a) and 124.17(a).) Therefore, the final rule clearl y affords the public a meaningful opportunity for participation in the site - specific decision making to help ensure the soundness of both the information and subsequent determinations. **H .**  **Economic and Benefit**  **Analysis for the Final Rule** 

1. Economic Justification for the Final Rule Pursuant to the principles in E.O. 12866 and E.O. 13563, EPA has assessed costs and benefits for the final rule and has reasonably determ ined that the benefits of the rule justify the costs. EPA has estimated the social cost of this rule to be $ 275 million annually . For more information on EPA’s analy sis of the rule’s costs, see Section IX. As described in more detail below in Section X , significant benefits are associated with the rule. These benefits include the annual reduction in impingement mortality of 6 52 million age - one equivalents for existing units . There are, in addition , other important benefits, many of which EPA cannot q uantify . These benefits include effects on many shellfish species and nonuse values associated with the vast majority of fish and shellfish. The rule also requires establishing site - specific entrainment controls through a process in which specific environm ental conditions and the localized benefits of entrainment reductions will be assessed along with the costs of controls. The information generated in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 214 of 567 the required studies will enhance the transparency of decision making and provide an opportunity

for meani ngful public participation, ensuring that decision making is based on the best available data. Overall, these requirements and subsequent Director action s under this rule will foster protection and restoration of healthy aquatic ecosy stems that have import ant commercial, recreational, aesthetic and cultural values to their surrounding communities. Many of the benefits that will result from the rule are not monetized or quantified, and as a result the Agency’s monetized benefits analy sis underestimates the t otality of the rule’s benefits. On the basis of the record, EPA has determined that the impingement mortality and entrainment controls will result in benefits that justify

the costs of the rule. EPA also notes that it was able to generate onl y a partial es timate of benefits for today ’s rule . In particular, EPA’s anal ys is does not fully quantify or monetize certain potentially

important categories of benefits, such as existence values for threatened and endangered species, secondary and tertiary

ecos ys tem impacts, benthic community impacts, shellfish impacts and the impacts arising from reductions in thermal discharges that would be associated with closed - cycle cooling. Changes in fish assemblages due to impingement, entrainment and thermal effects are also n ot fully valued . These categories of benefits which are not fully valued are often referred to as nonuse benefits

– i.e., benefits that people derive apart from using an affected resource, such as fishing. For example, nonuse benefits would include the value that individuals place on knowing that an aquatic ecos ys tem is healthy . EPA conducted a nonuse benefits transfer was based on a species that represents less than one percent of adverse environmental impacts . EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 215 of 567 developed and implemented an original stated preference survey to estimate total values (use plus nonuse values) for aquatic re source improvements under 316(b) regulatory options. EPA decided not to employ the survey results for purposes of decision - making and EPA has not accounted for values estimated from the survey in the quantitative comparison of costs and benefits. It is also important to note that EPA’s stated preference survey was designed to estimate respondents' willingness to pay for changes in the health of fish populations and aquatic ecos ystems and to be statistically representative at large (regional and national) scales; the results were not specificall y designed to be statistically representative at the facility level for the assess ment o f benefits for individual site - level permitting decisions . As noted at the outset, it is not alway s the case that private decision making regarding withdrawals of cooling water takes into account society’s preferences for fish protection, nor are there market transaction opportunities for individuals to express their willing to pay

for fish protection . Thus, despite the limited information on monetized social benefits, EPA has concluded that the benefits of today ’s rule justify the costs of t oday ’s rule. 2. Comparison of the Other Options As discussed above, EPA considered three other primary opti ons before selecting today ’s rule . See S ection VI.F Other Options Considered for more detailed explanation of each option. Exhibit VI - 1 illustrates a comparison of the total annualized social costs and benefits .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 216 of 567 **Exhibit VI -**  **1. Comparison of the primary options for 316(b)**  **($2011 millions at 2013, 3% discount rate)**

**Option Total**  **Annualized Social Cost Monetized Benefits**  Proposal Option 4 $ 251.8 $ 31. 0 Final Rule $ 274.9 $ 3 2.8 Proposal Option 2 $ 3643.2 - $ 154 2 .6 **I .**  **Site -**  **Specific Consideration of Entrainment Controls** As described above, EPA is not promulgating uniform national requirements for entrainment for existing facilities . Instead, EPA is setting standards for entrainment that include a framework b y which a facility will be subject to a site - specific determination by EPA or a State NPDES permitting authority of appropriate BTA requirements for entrainment. This section describes the process for determ ining section 316(b) requirements for an individual facility under the national BTA standard for entrainment . It describes the elements that the Director must consider in the permitting decision and how costs and benefits may be considered in such an evaluation. 1. Implementation of a Site - Specific Evaluation of Entrainment for Existing Facilities The final rule requires a site - specific determination of BTA entrainment conditions in individual permits and prescribes the requirements for that permitting proceeding . The final rule includes permit application requirement s for facilities with a cooling water intake struct ure. These requirements are designed to elicit the information the Director needs to determine the best technology for reducing entrainment for a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 217 of 567 particular facility , including information pertinent to an assessment of whether the benefits justify the costs of any particular control measures under consideration . Today ’s final rule is a modification of the proposed approach of a site - specific BTA entrainment determination . It will result in one of two outcomes at any facility : 1. Determination that the facility must install additional control measures that reduce entrainment beyond that achieved b y the currentl y installed equipment. These may include closed - cycl e cooling and/ or other technologies . 2. Determination that the facility ’s current, existing technology for entrainment achieve s the entrainment BTA requirements under the national BTA standard . Thus, EPA expects that, under this approach, there will be additional entrainment controls for some f

acilities and none for oth ers. Even where the Directo r’s determination requires no additional control measures, the Directo r may conclude the permit should include conditions that specify proper operation and maintenance of the installed technology . EPA notes that in a number of areas of the country (California, Delaware, New York, and New England; see, for example, DCNs 10 - 6963 and 10 - 6841, and EPA Region I ’s Bray ton Point), permitting authorities have already required or are co nsidering requiring existing facilities to install or retrofit to closed - cycle cooling s ys tems. These facilities are still subject to today ’s rule but the existing requirements have been taken into account in costing . . For facilities that withdraw more than 125 mgd, the rule generall y requires that the facility

conduct an entrainment study as part of its permit application. The study will*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 218 of 567 indicate, at a minimum, the specific entrainment data collection methods, taxonomic identification to the lowest taxon possible , latent mortality identification, documentation of all methods, and quality assurance/quality control procedures for sampling and data anal ys is appropriate for a quantitative survey . P eer reviewers must be selected in consultation with the Director, who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially

affected by

the cooling water int ake structure. Data from the entrainment study is important to provide corroboration of any through - facility entrainment survival study results in § 1 22.21(r)(7) or from any other studies conducted. The final rule also requires the permit application to include the following information as part of the entrainment study (which refers to the requirements at § 122.21(r)(9) through (13), as opposed to the Entrainment Characterization Study at (r)(9)). F or a thorough discussion of these study requirements, see Section VIII :  An engineering study of the technical feasibility and estimated costs of all candidate entrainment control technologies, i ncluding closed - cycle cooling, fine mesh screens with a mesh size of 2 mm or smaller , and water reuse or alternative sources;  A discussion of any outages, downtime, or other effects on revenue along with a discussion of all reasonable attempts to mitigate these cost factors*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 219 of 567  A discussion of the magnitude of water quality benefits, whether qualitative, quantitative or monetized , of the candidate entrainment reduction technologies evaluated ; thermal discharges ; and

 A discussion of the changes in non - water quality environmental impacts and other factors attributed to technologies and/or operational measures considered, including, for example, increases and decreases in the following: energy consumption; air pollutant emissions including particulates and their health and environmental impacts; noise; safety (e.g., visibility of cooling tower plumes, icing); electric grid reliability, and facility reliability . The permit application will provide the Director with information about options for entrainment reductions at the site and other possible avenues for addressing any adverse effects from entrainment. The purpose of the entrainment study and other permit application materials is to assist the Director in better understanding the effect of entrainment on species in the waterbody from which cooling water is withdrawn . More specificall y, the entrainment study will identify species that might be entrained, and e stimate their baseline entrainment rates given current entrainment controls. Moreover, the entrainment study will include information about the aquatic eco sy stem effects of entrainment of species, and any threatened and endangered species whose range of habitat includes waters where the facility ’s intake is located. An underst anding of the potential ecos ys tem conse quences of entrainment for species will help inform Director decisions about additional information required in the permit application, or permit requirements for any possible additional technologies and management practices. EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 220 of 567 will endeavor to identify

high - quality examples of entrainment studies as they are c ompleted, and post them to its w ebsite for this rule as a resource for study preparation. EPA’s benefits estimates were based on an extrapolation of available literature on imping ement and entrainment studies; the specific Entrainment C haracterization S tudy prepared by

a facility could lead to a different estimate of impingement and entrainment for that facility relative to its share of EPA’s estimate in the anal ys is supporting this rule and in the record . Following the Directo r’s review of th is information, the Directo r must determin e what BTA entrainment requirement to propose and explain in writing the basis for the dra ft permit. The draft permit will then be available for comment from the interested public under the Director’s normal permitting process. 2. Site - Specific Consideration of Cost and Benefits In establishing requirements under section 316(b) of the CWA , the Supreme Court in Entergy made clear that one factor that EPA may , but is not required , to consider is the costs and benefits associated with various control options. That is, in setting standards, EPA may

consider the benefits derived from reductions in the adverse environmental impacts associated with cooling water intake structures and the co sts of achieving the reductions. As previously explained , following E.O. 13563 , EPA has determined that the benefits of the final rule justify its costs. In addition, EPA has explained (in Section II.C above) why considerati on of quantitative and qualitati ve social costs and benefits may

be appropriate in the site - specific determinations when establishing entrainment controls.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 221 of 56 7 In the site - speci fic proceeding , the Directo r must consider, among other factors , monetized , quantified and qualitative social benefits and social costs of available entrainment controls, including ecological benefits and benefits to any threatened or endangered species. The Directo r may be able to reject otherwise available entrainment controls if the costs of the controls are not justified by their associated benefits (taking into account monetized, quantified , and qualitative benefits), and the other factors discussed in the final rule. In making the site - specific entrainment BTA requirements determination, the final rule requires that the Director consider the information submitted under § 1 22.21(r) with the section 316(b) permit application. Further, in the case of the larger withdrawing cooling water intake structures (125 mgd AIF or greate r), the rule require s submission of additional information including, studies on entrainment at the facility, the costs and feasibility of control options, and information on the benefits of entrainment controls. In e valuating benefits, the Director should not ignore benefits that cannot be monetized or quantified or consider only the impingement and entrainment reductions that can be counted. To result in appropriate decisions from society ’s standpoint, the assessment of benefits must take into account all benefits, including categories such as recreational, commercial, and other use benefits; benefits associated with reduced thermal discharges; reduced losses to threatened and endangered species; altered food webs; be nefits accruing nonlocally

due to migration of fish; nutrient cycling effects; and other nonuse benefits. Merel y because it is difficult to put a price tag on those benefits does not mean that they are not valuable and should not be included at least qual itatively in any assessment . The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 222 of 567 rule does not require the Director to require a facility owner or operator to conduct or submit a willingness - to - pay survey to assess benefits. Further, the rule does not limit the Director’s discretion to consider non - water quality impacts in determining whether further entrainment measures are justified. When some benefits are not monetized, the requirement to consider costs and benefits in today’s rule does not mean the Director should base decisions solely on the monetized benefits and costs, ignoring the non monetized benefits . In stead, the Director should consider the costs and what the magnitude of the non - monetized benefits would have to be in order to justify the costs . An aggregate evaluation of benefits ( even if accurate) would not account for the variations in benefits from location to location. On the basis of available information, EPA’s anal ys is of benefits relied on extrapolating data from existing impingement and entrainment characterization studies to all facilities in the same region on a flow weighted basis . Differences in species, life stages, and biological abundance across intake locations (even within a region) could lead to very different results for a site - specif ic anal ys is of a facility

as compared to that facility ’s share of national costs and benefits, even if the national results are, on average, accurate . A national assessment tends to mask variations in benefits and costs from different geographical location s for diff erent water bodies. For example:

 Some fish species at coastal facilities have biological spawning attributes that differ from those at other locations.

 The proportion of the receiving water withdrawn for cooling could also vary among sites.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 223 of 567  The v alues that communities place on their resources could vary from site to site.

 One ecological environment might experience large masses of hardier eggs and larvae subject to potential entrainment; another will have fewer but less hardy eggs and larvae susceptible to entrainment. Without detailed study information, it’s difficult to ascertain which ecological environment faces the greater adverse environmental impact from a similar cooling water intake . The resulting differences in the value of reduced entrainment

— which could be dramatic for some sites

— necessarily

disappear in a national aggregation of results. The Agency has decided that this masking of variation in benefits further supports EPA’s decision to require consideration of the site - sp ecific benefits of entrainment control technologies in the site - specific process to establish entrainment controls. The Director must then explain the basis for rejecting an available technology not selected for entrainment control in light of the submissi ons after consideration of the three factors that supported EPA’s determination not to establish a uniform national entrainment standard based on closed - cycle cooling. The Director also must base the determination about BTA controls on the number and ty pes of organisms entrained, including Federally- listed, threatened and endangered species and designated critical habitat (e.g., prey

base) as well as consideration of the site - specific social costs and benefits (monetized and nonmonetized) of the various control technologies considered for the facilities. As noted, the Directo r may reject an otherwise available entrainment technology as the BTA requirement (or not require any additional BTA controls) if the social costs of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 224 of 567 the controls are not justified by the social benefits (monetized and nonmonetized) . EPA decided to adopt this approach in determining site - specific entrainment controls because it is permissible under Entergy , under E.O. 1356 3, and consistent with the more than 30 - ye ar history

of section 316(b) permitting decisions . This history

illustrates the role that cost/benefit considerations have played. As earl y as 1977, EPA in a permitting decision and a General C ounsel opinion explained that, while section 316(b) does not require a formal cost - benefit analy sis, the relationship of costs and benefits may be considered in 316(b) decision making. In re Pub. Serv. Co. of N.H. (Seabrook Station, Units 1 and 2) , No . 76 - 7, 1977 WL22370 (June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st Cir. 1978); accord In re Central Hudson Gas & Elec. Corp., Op. EPA Gen. Counsel , NPDES No. 63, 1977 WL28250, at *8 ( July 29, 1977). In the more than 30 years since, EPA and S tate permitting authorities have considered the relationship between costs and benefits to some extent in making individual permitting decisions. See, for example, In re Pub. Serv. Co. of N.H. (Seabrook Station, Units 1 and 2) , No. 76 - 7, 1978 WL21140 (E.P.A. Aug. 4, 1978), aff ’d, Seacoast Anti -Pollution League v. Costle , 597 F.3d 306, 311 (1st Cir. 1979). Because E.O. 13563 directs agencies to propose and adopt rules only upon a reasoned determination that the benefits jus tify the costs, EPA is allowing this consideration to be applied at the permit level . This approach is consistent with the historical application of s ection 316(b) requirements and will allow for a full assessment in permit decisions of both qualitative and quantitative benefits and costs. As designed, EPA’s requirement for the establishment of site - specific BTA entrainment requirements*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 225 of 567 strikes an appropriate balance between environmental improvements and costs, allowing the Director to consider all the relevant factors on a site - specific basis and determine BTA on the basis of those factors. After considering the factors relevant to a site, the Director must establish appropriate entrainment controls at those facilities. The Director must review available control technology

and may reject otherwise available entrainment controls as BTA if the social costs of the controls are not justified b y their social benefits (taking into account both quantified and non - quantified benefits) or if the Director concludes that there are other unacceptabl y adverse factors that cannot be mitigated . As designed, EPA’s national BTA standard for establishing site - specific BTA entrainment requirements strikes an appropriate balance between environmental improvements and costs b y s electivel y requiring closed - cycle cooling or other entrainment technologies at some facilities, without requiring the same technologies at all facilities. 3. Potential Cost for Site - Specific Entrainment Controls For the proposed rule, EPA analyzed possible additional costs associated with reductions in entrainment mortality that might result from the Directors ’ determinations of site - specific B TA requirements . Because this process will play out over a number of ye ars as Directors consider waterbody- specific data, local impacts, and public comment, and weigh land availability , air quality impact s , and remaining useful life, those estimates of the costs of site - specific determinations are highly speculative. EPA is not presenting specific cost estimates today for prospective entrainment requirements because we do not have in hand the robust data that w ill be generated for individual site - specific settings as*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 226 of 567 required under the national BTA standard for entrainment. Without that refined information on a site - specific basis, EPA has no ability to predict Director decision making and therefore, the Agency is not estimating costs associated with the ultimate entrainment requirements. Similarly and for the same reasons, EPA did not estimate costs associated with requirements at § 125.94(g), 125.94(c)(8) or 1 25.94(c)(9). EPA estimates that the most effective technology for reducing entrainment , closed - cycle cooling, is not available to at least one quarter of all facilities because of geographic constraints, air permitting restrictions in a nonattainment area and remaining useful life of the facility . EPA has limited information on which facilities these are, despite the certainty

that the se availability

concerns are real and significant. In addition, EPA does not have in hand the si te - specific data that will be generated as a result of today ’s rule. If EPA had this data, it would be possible to estimate the costs and benefits ultimately

associated with the Directors’ site - specific determinations under the national BTA standard for entrainment. The hy pothetical costs generated at proposal were reported in an attempt to signal that EPA neither expects that zero facilities would be subject to closed - cycle cooling as a result of the site - specific BTA process for entrainment, nor th at all facilities at which these technologies are feasible would be subject to closed - cycle cooling requirements . Without the site - specific information, there is significant uncertainty around any estimates EPA could generate of these costs (includi ng those reported at proposal ) and benefits .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 227 of 567 **VII. Response to Major Comments on the Proposed Rule and Notice**  **s of Data**  **Availability (NODA s**  **)** Over 1,100 organizations and individuals submitted comments on a range of issues in the proposed rule, includin g over an additional 62,000 letters from individuals associated with mass letter writing campaigns. An additional nearl y 250 comments were received on the two NODAs. Responses to all comments, including those summarized here, are in the Response to Comment s document in the official public docket (see DCN 12 - 0004) . To facilitate a more comprehensive response and to simplify the task of discussing EPA’s rationale for promulgating the final rule, EPA is responding to these public comments in essay form. Each topic area discussed in the comment letters has been addressed in one of the comprehensive essay responses. The major comment s received and EPA’s response s are summarized in this section. **A. Scope and Applicability**  1. Source of Water

– Impoundments Many commenters expressed concern that the proposed rules do not adequately address the unique water bodies resulting from the many man - made reservoirs specificall y designed and constructed as cooling water impoundments (referred to as cooling ponds in the proposed r ule). Commenters expressed confusion regarding the applicability

of the proposed regulations because impoundments have both intakes from the impoundments and intakes that supply water to the impoundment . Many requested th at EPA clarify

that man - made impoundments , built to supply water for power plants, do*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 228 of 567 not constitute water of the United States for purposes of implementing the rule or that they should be classified as meeting the definition of closed - cycle cooling. Resp onse: As discussed in Section I , facilities that withdraw cooling water from impoundments that are waters of the United States and that otherwise meet the criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are subject to today ’s rule. Revisions to the definition of waters of the U.S. are outside the scope of this rulemaking. However, today ’s regulatory definition of closed - cycle recirculating s ys tems specifies that such a s ys tem may include impoundments of waters of the U.S. where the i mpoundment was constructed prior to today ’s final rule. To meet the rule definition for closed - cycle recirculating sy stem , this impoundment must have been lawfull y created for the purpose of serving as part of the cooling water s ys tem as documented in the project purpose statement for the Clean Water Act s ection 404 permit obtained to construct the impoundment. In the case of an impoundment whose construction pre - dates the CWA requirement to obtain a s ection 404 permit, EPA expects documentation of the proj ect’s purpose to be demonstrated to the satisfaction of the Director . This documentation could be some other license or permit obtained to lawfully

construct the impoundment for the purposes of a cooling water sy stem , or other such evidence as the Directo r finds necessary . The definition of closed - cycle recirculating s ys tem at § 125.92(c)( 1 ) of today ’s rule also specifies that impoundments that are not waters of the United States but withdraw make - up water from waters of the U.S. meet the definition of a closed - cycle recirculating s ys tem , if make - up withdrawals have been minimized . These*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 229 of 567 impoundments are constructed in uplands, and are not required to obtain a 404 permit. Thus, these impoundments do not need to provide documentation of the project’s pur pose. 2 . New Units In the proposal, EPA defined new units as newl y built units added to increase capacity at the facility . The definition did not include any rebuilt, repowered or replacement unit, including any units where the generation capacity of the new unit is equal to or greater than the unit it replaces. Many industry stakeholders agreed that the definition of new units should not include repowered existing units. Others tho ught that new units should be treated similarly to existing units with entrainment standards applied on a site - specific basis and that the nine proposed factors should also be applied to entrainment decisions for new units. Environmental organizations argu ed that EPA should set a deadline b y which all existing facilities must comply with the new unit standards and that EPA’s exclusion of repowered/rebuilt facilities created a loophole through which existing facilities could perpetually operate as an e xisting unit, even after replacing all of the generating equipment. Many of the comments had several elements in common:

• Requirements should be flexible enough to address sites where meeting the requirements is not technically feasible (e.g., limited land availability).

• EPA needs to provide greater clarity regarding how new unit standards apply to manufacturing facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 230 of 567 • The DIF is a more appropriate parameter for determining compliance because AIF cannot be determined until after the s ys tem is built, and baseline AIF would require assumptions about as - ye t undetermined operational factors.

• It is unclear how the new unit requirements will be applied to manufacturing units, and the requirements do not appear to consider the circumstance where a new unit is c onstructed at an existing manufacturing facility where construction of the new unit does not require any modifications to the existing intake structure.

• Some commenters have noted that the new unit provisions are a departure from previous determinations an d are unclear. They argue that they

have not had adequate opportunity

to comment on this issue and request EPA re - propose new unit requirements if it wants to continue with this initiative. Response: EPA's definition of a " new unit " for the final rule can be found at § 12 5 .92 (u) . New units include s the addition of a stand - alone unit that is constructed at an existing facility . The rule definition makes it clear that the new unit may be for the same general industrial activity as the existing facility . Because the requirements are much like the Phase I requirements for new facilities the costs for installing controls at new units are similar to the costs imposed on new facilities . The cooling water withdraws made b y the rest of the existing facility are subject to the requirements at 40 CFR 125.94(c) and (d). With respect to impingement mortality and entrainment, the final rule requires , at § 125. 94(e)(1), that new unit s achieve flows commensurate with that of a closed - cycle recirculating s ys tem . As with the new facility Phase I rule , the new unit may choose to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 231 of 567 meet an alternative requirement at 40 CFR 125.94 (e)(2) and demonstrate to the Director that the technologies and operational measures employed will reduce the level of adverse environmental impact from any cooling water intake structure used to supply cooling water to the new unit to a comparable level to that which would be achieve d upon implementing closed - cycle recirculating for that new unit. This includes a demonstration showing that the entrainment reduction is equivalent to 90 percent or greater of the reduction that could be achieved through implementing a closed - cycle recirculating s ys tem. This demonstration must also include a showing that the impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if the facility were to implement a closed - cycle recirculating s ys tem . Facilities may choose to install a closed - cycle recirculating s ys tem , and EPA has observed that many new units are selecting closed - cycle recirculating sy stems on their own, particularl y for combined cycle and natural gas for reasons unrelated to 316(b) (such as water availability). In these cases, benefits related to reductions in IM&E would be expected to occur. Finally , for new units at existing facilities, the Director may establish alternative requirements if the data specific to the facility indicate that compliance with the requirements of paragraphs (e)(1) or (2) of § 125.94 for each new unit would result in compliance costs wholl y out of proportion to th e costs EPA considered in establishing the requirements at issue, or would result in significant adverse impacts on local air quality , significant adverse impacts on local water resources other than impingement or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 232 of 567 entrainment, or significant adverse impact s on local energy markets. This provision is identical to that provided in the Phase I new facility rule. **B. Proposed Amendments Related to Phase I Rule**  Commenters suggested that restoration be allowed in a range of situations, including where a nuisance species is a problem that will get worse with the use of cooling water intake structure technology , where affected species are not species of concern in man - made lakes, and to reduce the cost of meeting 316(b) requirements (i.e., offset losses). Response: The Second Circuit found that EPA exceeded its authority b y allowing facilities subject to CWA section 316(b) to comply with section 316(b) through restoration measures and, thus, EPA has deleted these provisions from the regulations at §§ 125.84 and 125.86 to make the rule consistent with the court decisions. **C. Environmental Impact Associated with Cooling Water Intake Structures**  Many commenters expressed concern that limited scientific evidence exists that measureable aquatic population or community effects occur as a result of cooling water withdrawals and that impingement mortality and entrainment mortality requirements should not apply

unless adverse environmental impacts are demonstrated. They also noted that not all environmental impacts are adverse. For example, removal of invasive species or quickl y reproducing species might not be harmful. Response: EPA disagrees . The evidence shows that the total number of aquatic organisms lost annually is in the hundreds of billions, or is 1.9 billion on an age - one*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 233 of 567 equivalent basis . Additional data provided in comments shows aquatic organisms are lost through impingement and entrainment b y all types of cooling water intake structures. The data demonstrates that the effects of cooling water intake structures on the aquatic environment are significant and widesp read. In addition, there is documented evidence of population level effects of cooling water intakes for certain species in certain instances . See, for example, 69 FR 41587 , July 9, 2004 for a discussion from the 2004 Phase II rule . Also, Bay shore, Indian River and Indian Point are discussed in the BA for the final rule . **D. EPA’s Approach to BTA**  1. Relationship of Cost s and Benefits Many commenters expressed concern that the proposed rule’s costs significantly outweigh the benefits and that studies, technology modifications, monitoring, and reporting should not be required if costs exceed benefits. Response: While the rule costs exceed the monetized benefits as presented, EPA has concluded that the costs do not outweigh total benefits when both monetized and nonmonetized benefits are considered . EPA notes that the monetized benefits are onl y a subset of all benefits . In the absence of complete estimates of nonuse benefits, EPA estimated partial nonuse benefits for the final rule using the benefits transfer approach from proposal . This approach is still a partial estimate, because the nonuse benefits transfer was based on a species that represents less than one percent of adverse environmental impacts . With respect to entrainment, the rule authorizes the Director to consider costs versus bene fits on a site - specific basis. With respect to impingement mortality , the rule provides seven compliance alternatives based on a set of widely used,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 234 of 567 demonstrated, proven technologies , many of which have been in use for decades and whose efficacy

is well supported in EPA’s record . 2. Site - Specific approach Many co mmenters agreed with EPA’s site - specific approach for entrainment mortality requirements but argued that the same approach should also be applied to impingement mortality

requirements. State agencies and environment organizations are concerned that the sit e - specific entrainment determinations will create additional administrative burdens on already overextended permitting authorities which could exacerbate permit backlogs. Response: EPA does not agree that impingement mortality is best addressed by the sam e app roach adopted for entrainment. This is because EPA has been able to identify low - cost technologies that are available, feasible and demonstrated for impingement mortality

nationally . EPA has not been able to identify an available, feasible and demonstrated technology nationally

for entrainment, and therefore has adopted as its national BTA entrainment standard a structured process for determining on a site - specific basis what entrainment controls are the best technology avail able at a particular facili ty . EPA agrees that site - specific entrainment has potential to create additional burdens for states , but EPA has tried to limit this burden by simplifying its information collection requirements from those at proposal. EPA has streamlined the information c ollection requirements so that information necessary for the Director to make a BTA determination is submitted by the permittee in the permit application earl y*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 235 of 567 in the process, thus minimizing the number of transactions between permittee and the Director. **E .**  **BTA Performance Standards**  1. Impingement Standards EPA received a substantial number of comments on how the final rule should address impingement mortality . EPA proposed an impingement mortality standard based on the performance of modified traveling screens with fish handling and return that required achievement of a numeric IM performance standard . As an alternative EPA proposed that a facility

could demonstrate that either the design intake velocity or the actual intake velocity

at its operation was less than 0.5 fps. Most of the commenters, including members of the U.S. Congress, state and local elected officials, and industry stakeholders, requested additional flexibility in complying with the impingement mortality standards . Whi le the proposal would not specificall y require the use of modified traveling screens with a fish handling and return s ys tem to meet the impingement mortality standards , some commenters interpreted the proposed rule as requiring this. EPA proposed imp ingement mortality standards that were expressed as a monthly average and a 12 - month average. EPA recognizes, however, that some regulated entities might find a technology- based compliance option, rather than a performance based approach, mo re attractive. Such an approach, particularl y the specification of pre approved technologies, could offer higher regulatory certainty , easier demonstration of compliance, and might offer a less expensive alternative because of reduced monitoring requirements associated with pre - approved technologies. Some commenters viewed the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 236 of 567 proposed impingement mortality standard as overly stringent and requested that EPA establish alternative impingement mortality standards , including site - specific impingement mortality

requirements similar to those proposed for entrainment. Other commenters provided data pertaining to the performance of technologies, including modified traveling screens used as the basis for the impingement mortality performance standard . Several industry stakeholders stated that, despite EPA’s best intentions, the proposed rule applied a one - size - fits - all approach for impingement mortality . While all the suggested changes to the proposal seek to provide additional flexibility through a variety of approaches, most of the comments had several elements in common:

• D efining modified traveling screens as a pre - approved technology or otherwise streamlining the NPDES process for facilities using the candidate technology on which BTA is based. Thus, EPA would designate certain technologies or certain conditions as complying with the impingement requirement.

• Providing a mechanism to identify other technologies that perform comparably to modified traveling screens .

• Modifying the proposal so that facilities that have already reduced the rate of impingement could obtain credit toward the impingement mortality standard .

• Developing a more tailored approach to protecting shellfish.

• Creating alternatives for facilities w ith very low (de minimis) impingement levels or mortality

rates.

• Providing additional clarity on species of concern as it pertains to demonstrating compliance with the numeric impingement mortality performance standard .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 237 of 567 • Reevaluating the impingement mortali ty numerical performance standards . In addition, as noted above, EPA also received a number of comments suggesting that it adopt a site - specific approach to reducing impingement mortality similar to the proposed approach for addressing entrainment, r ather than uniform national requirements for impingement mortality and a site - specific approach for entrainment only . Many commenters expressed concern that the entrapment requirements were not well defined and would require costl y technologies that are no t considered in EPA’s cost estimates and could be difficult to comply with, particularl y where cooling systems employ impoundments or basins downstream of the initial intake structure. Response: See the earlier discussion concerning how EPA determined the numeric impingement m ortality performance standard. Additionally , see earlier discussion for an explanation of how EPA revised the impingement mortality standard to provide seven alternatives for compl iance . EPA agrees that specific entrapment requirements are not necessary and requirements for facilities to deploy technologies to avoid entrapment have be en deleted from the final rule. However, a facility that entraps fish must count the entrapped organisms as impingement mortality . 2. Entrainment Standards A substantial number of commenters supported EPA’s site - specific approach for entrainment standard s . Suggested revisions to the approach included the following:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 238 of 567 • EPA should recognize the value of waterbody- based requirements, including withdrawals on lakes/reservoirs and less than 5 percent of rivers as not requiring entrainment mortality .

• Units with a low capacity utilization should be exempt from entrainment mortality .

• Facilities with AIF of less than 125 mgd should be presumed as entrainment mortality compliant.

• EPA should consider entrainment survival. Response: With respect to waterbody- based requirements and ca pacity utilization thresholds, EPA disagrees with commenters suggestions. There is no fundamental differen ce in technological performance based on waterbody so there is no need to subcategorize based on waterbody. EPA found that low CUR facilities are generall y peaking plants that operate at full capacity for portions of day s during a few months or less . Further, EPA found that some sites continue to withdraw water through their cooling water intake structure even when no p o we r is being generated. If that period of cooling water intake operation corresponds with times when spawning is occurring, those facilities could have significant impacts from impingement and entrainment. Therefore, simply being a low CUR unit does not impl y no adverse environmental impacts. Instead, EPA found that low CUR should be looked at more closel y on an individual unit basis. EPA has included a provision in the final rule that states where a generating unit has an annual average capacity utilization rate of less than 8 percent averaged over a 24 - month block contiguous period, the owner or operator may request that the Director establish*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 239 of 567 less stringent standards for IM. With respect to facilities below 125 AIF being considered entrainment compliant, EP A disagrees with the comment since any facility at any flow may have an adverse environmental impact. With regard to entrainment survival , EPA does allow for consideration of entrainment survival. The monitoring requirements for entrainment for new units at § 125.96( d)( 3 ) states that mortality after passing the cooling water intake structure must be counted as 100 percent mortality unless you have demonstrated to the approval of the Director that the mortality for each species is less than 100 percent. 3. Closed - Cycle Cooling Both industrial stakeholders and many state agencies endorse d an approach that deem s facilities with closed - cycle cooling to be in compliance with the BTA impingement mortality standard , and eligible for reduced monito ring and reporting requirements. Most industrial stakeholders agreed with the EPA decision that closedcycle cooling should not be imposed as a national BTA standard. They argue that although closed - cycle cooling might be available and achievable at many f acilities, requiring closed - cycle cooling nationall y has numerous drawbacks including the following:

• Requirements for closed - cycle flow reduction do not take into consideration the site - specific limitations at some facilities (e.g., blowdown water quality, scale, fouling problems).

• Cooling towers would result in significant adverse impacts from fine particulates, carbon dioxide emissions, evaporative water loss, and other issues.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 240 of 567 Commenters expressed concern that the proposed definition of a c losed - cycle recirculating s ys tem is far more restrictive than the definition used in the Phase I rule. It includes only

s ys tems that withdraw make - up flow intermittently , are designed to operate above minimum COC, reduce flow b y a specified percentage (depending on wh ether salt o r fresh water), and did not include impoundments that are waters of the United States. Some commenters stated that while they might have been effectivel y operating as closed cycle units for many

years, they

have concerns with their ability to compl y with the definition in the proposal, particularl y with respect to the specified COC. Response: EPA agrees that facilities employing a closed - cycle recirculating sy stem for entrainment should also be deemed in compliance with the impingement mortali ty standard, as long as the s ys tem is properly operated. While a closed - cycle recirculating s ys tem is the most effective technology for reducing entrainment , EPA has not established BTA based on closed - cycle cooling because EPA concluded it was not BTA, for the reasons specified in Section VI. Regarding the definition of closed - cycle cooling, EPA identified two parameters that demonstrate proper operation: flow reduction and cycles of concentration. To p rovide flexibility, EPA has removed the numeric levels of the metrics as threshold, while retaining the minimized makeup flows aspect of the definition. Therefore while the definition in this final rule does not establish fixed requirements in terms of COC and comparable percentage flow reduction to qualify as a closed - cycle recirculating s ys tem , the rule provides that a closed - cycle recirculating sy stem “generally” will achieve the specified benchmarks that characterize a properl y o perating closed - cycle cooling s ys tem. EPA further recognizes that certain unavoidable*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 241 of 567 circumstances could exist where the specified COC or percent reduction values might not be achievable. Such site - specific circumstances could include situations where wat er quality- based discharge limits might limit the concentration of a pollutant that is not readil y treatable in the cooling tower blowdown or situations where the source water quality could lead to unavoidable problems concerning scale formation, solids bu ildup, corrosion, or media fouling. If a facility can demonstrate that these occurrences are unavoidable, under the definition in the final rule, the Director may determine that such a facility is a closed - cycle recirculating s ys tem, taking into account th e site - specific circumstances. In addition, EPA has explained how the conditions added to the existing facilities definition do not in effect make it more stringent than the Phase I definition of closed - cycle recirculating s ys tems . The auxiliary electricity a facility uses to run the fans in a closed - cycle sy stem is electricity the facility can’t sell. The opportunity cost to the facility of using that electricity

to run the fans is the forgone revenue they would have been able to earn if they

had run their cooling water s ys tem in once - through mode . The forgone revenue provides the incentive for a facility to run its closed - cycle sy stem in once - through mode, rather than in closed - cycle mode. Thus, EPA adjusted the definition of a closed - cycle recirculating s ys tem to be a ppro priate for retrofit situations. **F. Implementation**  Many commenters expressed concern that the compliance timeline for impingement mortality

and entrainment requirements should be sy nchronized to prevent a facility from having to install tec hnology to comply

with impingement mortality requirements and then later be required to install entrainment mortality technology .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 242 of 567 Response: To address this concern , EPA revised the impingement mortality compliance requirements to provide that a fter issuanc e of a final permit establishing the entrainment requirements under § 125.94 (d), the owner or operator of an existing facility must comply

with the impingement mortality standard in paragraph § 125.94(c) as soon as practica

b l e . When the Director establishes a compliance schedule under § 125.94 (d) , the schedule must provide for compliance as soon as practica b l e . Thus, EPA has sy nchronized decision making about technology requirements, avoiding situations where investments in IM controls wou ld later be rendered obsolete by entrainment control requirements. **G. Costs**  1. Impingement Mortality Technology

Costs Commenters expressed concern about the approach for technology assignments used to estimate compliance with the impingement mortality standards and generall y asserted that costs were underestimated. These concerns included the following:

• The EPA incorrectl y assumed traveling screens were an available technology at most facilities.

• EPA underestimated the costs of modified traveling screens.

• EPA underestimated the difficulty and costs of installing fish returns. Response: EPA disagrees that traveling screens are not an available technology at most facilities; survey

data provided by

industry shows that 93 percent of generators and 73 percent of manufacturers already have screens. EPA agrees that some facilities may*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 243 of 567 not be able to readily

upgrade their screens to modified traveling screens with fish return, but that the vast majority can. EPA has updated the estimated costs of the rule to ref lect the difficulty of installing fish return and adjusted the cost of modified traveling screens to reflect most recentl y available vendor data. Specifically , EPA reviewed the cost methodology and made a number of revisions including the following:

• EPA re vised the technology assignment such that only those model intakes that have existing traveling screens are assigned modified traveling screen costs.

• EPA increased the estimated capital costs for modified traveling screens by 20 percent.

• EPA increased the estimated capital costs of fish returns and provided for an additional increase for facilities whose intakes would be difficult to install fish returns. For further discussion, see Section IX and the TDD ( Chapter 8) . 2. Entrainment Mortality Technology Costs Industrial stakeholder commenters argued that closed - cycle cooling costs are underestimated and the cost analy sis fails to include any costs for entrainment requirements. Riverkeeper argued that the EPA closed - cycle costs are overestimated. Response: For both the propos al and this final rule, EPA revised the methodology for estimating closed - cycle costs from what was used for Phase II and Phase III. EPA’s revised methodology

is based on the cost methodology provided b y the Electric Power Research Institute (EPRI). EPRIbased its cost methodology on over 50 actual and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 244 of 567 planned closed - cycle cooling s ys tem retrofits and EPA concluded that these cost estimates better reflect actual costs. EPRIhas updated their closed - cycle cost methodology

since EPA adopti on of the earlier version and provided an estimate of closed - cycle costs for generators with a design flow above 50 mgd (See DCN 12 - 6807 ). A comparison between the EPRI estimates and comparable EPA estimates indicate that the EPA capital and downtime co sts are somewhat lower than the EPRI estimates, while the EPA energy penalty costs are higher. (See DCN 12 - 6656 .) While Riverkeeper cites actual costs from retrofit projects completed in 1998 and 2002 to support the ar gument that EPA’s capital costs are overestimated , EPA has identified more recent closed - cycle retrofits where the capital costs were much higher than the EPA average, suggesting that the costs used b y EPA in the final rule are representative of the range of costs that may

occur nationwide. ( See DCN 12 - 6656 . ) Thus EPA considers its closed - cycle costs to reasonably reflect actual costs. EPA also received estimated costs for closed - cycle retrofits at small, medium, and large manufacturing cooling s ys tems from the American Chemical Council (ACC). A comparison of these costs to comparable EPA estimates indicated that for larger s ys tems the costs are mostl y in agreement but that for smaller systems (e.g., 5,000 gpm), the EPA cost estimates are lower. EPA’s acknowledges its methodology uses a linear approach and does not fully

account for the increased costs associated with the diseconomies of scale at the lower end of the spectrum of s ys tem sizes. Under EPA’s selected option, compliance for entrainment reduction requirements is established on a site - specific basis. Because no particular result is prescribed under this*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 245 of 567 approach, it is difficult to ascribe compliance costs for this aspect of the rule without the site - specific in formation that will be generated as a result of the national BTA standard for entrainment decision - making established b y today’s rule . For Proposal Options 2 and 3 where closed - cycle cooling would be required, EPA did estimate c osts for closed - cycle coolin g. EPA has not estimated what site - specific determinations will be made as part of the anal ys is. **H .**  **Monitoring and Reporting** 1. Velocity

Monitoring Many commenters explained that it would be difficult to directly measure through - screen velocity for screen technology and agreed with the suggestion in the NODA that EPA should allow for calculation of through - screen velocity . Also, many were concerned that a velocity limit based on minimum water levels would be difficult to comply with. Of concern are extreme conditions that are beyond the facility ’s control (e.g., low water due to drought). Response: EPA agrees that direct measurement of intake velocity on a traveling screen may

be problematic in some circumstances, and the final rule allows intakes to comply with the low velocity IM compliance alternatives by either calculation or direct measurement. Compliance will be demonstrated through monitorin g and reporting of actual or calculated intake velocities. S hort - term exceed ances of the velocity may be permissible for brief periods , with Director approval, for purposes of maintaining the cooling water intake s ys tem, such as backwashing the sc reen face . EPA expects that facilities will employ

appropriate design and operational measures to ensure that the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 246 of 567 maximum velocity is not exceeded during minimum ambient source water surface elevations, as can be anticipated through best professional judgment using hydrological data. 2. Impingement Mortality Monitoring EPA received many comments concerning impingement mortality monitoring. Issues regarding impingement monitoring included the following:

• Many commenters expressed concern that the impingement mortality standard is unclear as to what species the impingement mortality requirements appl y.

• Intakes with low impingement would have difficulty calculating impingement mortality .

• Monitoring requirements for impingement mortality are exces sive, especially given the ph ys ical and biological challenges of appropriate sampling.

• Monitoring requirements should be eliminated for properl y installed/operated pre approved technologies.

• Impingement “selects” impaired organisms, resulting in bias. Response: EPA has addressed concerns regarding monitoring in the final rule. For example, there is no biological compliance monitoring for pre - approved and streamlined compliance alternatives in § 125.94 (c)(1) through ( 6 ) of today ’ s rule beyond that required for the permit application, and monitoring may be greatly

reduced for other facilities . EPA recognizes that biological monitoring can be expensive, which factored into EPA significantly

reducing those requirements. With respect to intakes with low impingement having difficulty calculating impingement mortality , facilities can*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 247 of 567 demonstrate under § 125.94(c)(6) that the rate of impingement is reduced due to intake location or other technologies or factors. Further, under § 125.94(c) ( 1 1 ) a facility can demonstrate to the Director that there is a de minimis rate of impingement such that no additional controls are warranted. 3. Reporting Requirements Comments concerning reporting requirements included the following:

• Commenters argue that permit application deadlines are unreasonable, especially given the limited number of consultants available and that EPA overestimates the number of facilities that have completed these studies.

• Peer review requirements are overly burdensome.

• Permit a

pplication requirements are burdensome and EPA should revise the proposed rules to remove, limit, or streamline the numbers and types of data, studies, and reports required. Permit a pplication requirements should be reduced for smaller facilities with intake flow in the 2

– 125 mgd range.

• The proposed rule requires the § 1 22.21(r) permit application materials for each permit cycle, regardless of whether the facility has been modified. After the initial assessment of BTA in the first permit cycle under the new rule, the permittee should not be required to do additional studies and submit further documentation unless there is a significant change in the facility ’s cooling s ys tem. Response: EPA notes that facilities have several flexibilities to address the first point, including: ( 1 ) i f a permit is issued prior to **[INSERT date 4 5**  **months after effective date of final rule]**  , the D irector can delay submission requirements until such*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 248 of 567 time that the fac ility can complete them and (2) i n permit terms subsequent to the first permit issued under today’s rule, the D irector can waive some or all of the studies . With respect to peer review, EPA disagrees that peer review is overl y burdensome . How to undertake a pee r review is widely known, generally

following a well - established process . EPA notes that peer review is a normal part of Agency activities , and that commenters generall y favor the application of peer review to environmental data and analyses . With respec t to the burden of the permit application process and subsequent permit cycles, EPA has reduced the permit application requirements for the final rule and streamlined bio logical data collection to two years of data collected as part of the permit application (with the exception of the few facilities expected to comply with the impingement mortality standard under the alternative at § 125.94(c)(7)) . In addition, entrainment studies are not prescribed for facilities below 125 mgd , although the Direct or may require the facility

to provide information beyond the basic permit application information . Also, the D irector can waive study require m ents in permit terms subsequent to the first permit issued under today ’s rule . **I .**  **Endangered Species Act** Some c ommenters argued that it is inappropriate to automatically treat T&E species in a special category and provide for special consideration for them under the rule. The se commenters asserted that EPA has no basis for incorporating ESA requirements into the rule and addressing ESA species under the NPDES program ; they argued that the ESA operates independentl y . Other commenters argued that EPA has an*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 249 of 567 obligation under the ESA to consult with the Services if cooling water intake structures are likel y to affect threatened or endangered species. Response: EPA has addressed T&E species and critical habitat in this rule to the extent necessary

to ensure that this action is consistent with both the Endangered Species Act and CWA section 316(b). Section 7 of the Endangered Species Act states that “each Federal agency

shall , in consultation with and with the assistance of [the services] insure that any action authorized , funded, or carried out by [ the agency]... is not likely to jeopardize the continued existence of any threatened or endangered species or result in the destruction or adverse modification of [ designated critical ] habitat . ” Under CWA section 316(b), facilities subject to NPDES permitting that have cooling water intake structures are subject to BTA to minimize adverse environmental impacts. The final rule requires NPDES 316(b) permittees to identif y all Federall y- listed threatened and endangered species and/or design ated critical habitat that are or may be present in the action area . The Director may reject an otherwise available technology as a basis for entrainment requirements if the Director determines there are unaccep table adverse impacts including impingement, entrainment, or other adverse effects to Federall y- listed threatened or endangered species or designated critical habitat . EPA consulted with the Services under the ESA regarding this rule, and a summary of the requirements related to threatened or endangered species is discussed in Section VIII.K of this preamble.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 250 of 567 **VII I.**  **Implementation** The following sections describe how the Agency expects the final rule requirements to be implemented. The requirements of today ’s final rule will be applied to facilities through NPDES permits issued by EPA or authorized States under CWA section 402. A fac ility

may generally choose to demonstrate compliance with the final rule by demonstrating compliance for the entire facility , or by demonstrating compliance for each individual cooling water intake structure. For example, a facility with two intakes could demonstrate flow reduction commensurate with an existing closed - cycle recirculating sy stem for the first intake, and demonstrate the intake velocity at the screen face is less than 0.5 feet per second at the second intake. Alternatively , the facility could demonstrate that each of the facility ’s intakes are designed with an intake velocity of less than 0.5 feet per second. For details about the scope and applicabil ity of today ’s final rule, see S ection I above. Today ’s final rule (as described in S ection IV above) establishes permit application requirements for existing facilities in §§ 122.21 and 125.95, monitoring requirements in § 125.96, and record - keeping and reporting requirements in § 1 25.97. All existing facilities subject to the final rule that withdraw from one or more cooling water intake structures with a facility- wide DIF of greater than 2 mgd are required to comply with the national BTA impingement mortality standard at § 125.94(c ) and national BTA entrainment standard at § 125.94( d). New units at existing facilities are required to meet the national BTA impingement mortality and entrainment standard s at § 125.94(e ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 251 of 567 The final regulations also require the Director to review permit application materials submitted by

each regulated facility , establish impingement mortality and entrainment requirements in accordance with this rule, and issue permits that include monitoring and record - keeping requirements ( § 1 25.98). The permit application requirements , monitoring, record - keeping, and reporting requirements for each of the compliance alternatives are detailed in the following sections. **A. When Does the Final Rule Become Effective**  **and How are the Requirements Sequenced in an Orderly Way**  **?** Th is r ule become s effective on **[INSERT date**  **60 days after publication**  **]** . The requirements in this rule will then be implemented in NPDES permits as the permits are issued. EPA has sought to address the information and studies required in the permit application associated with ongoing permitting proceedings and subsequent permitting after the first implementation of this rule in a permit. The EPA realizes that, in some cases, a facility may already be in the middle of a permit proceeding at the time of promulgation of this rule, or the Director may have already

required much of the same information be submitted by the facility

prior to promulgation of today ’s final rule. There fore the rule includes several provisions that provide flexibility for the permit application requirements. First, in the case of any permit expiring after **[INSERT date 4 5**  **months after effective date of final rule]** , under § 125.95 the facility must submit permit application materials required in § 122.21(r) with its next NPDES permit renewal application. Second , in the case of any permit expiring prior to **[INSERT date 4 5** *** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 252 of 567 **months after effective date of final rule]** , under § 125.95 a facility may request that the Director waive the submission date of the permit application requirements of § 122.21(r) based on a showing b y the owner or operator of the facility that it could not develop the information for which such a waiver is requested b y the time required for submission of the permit renewal application. If the Director then chose to allow a delay for the submittal of any of the information requirements of § 122.21(r), the Director would then determine the schedule for submission of any delayed requirements to be as soon as practicable . Third , in the case of permit proceedings begun prior to the effective date of today ’s rule, and issued prior to **[INSERT date 4 5**  **months after effective date of final rule]**  , the Direc tor should proceed . See § § 125. 9 5 (a)(2 ) and 125.98(g ). In such circumstances where permit proceedings have already begun prior to the effective date of the rule , these facilities will still need to submit the appropriate permit application materials found at § 122.21(r) permit applications during the ir next application. Additionally , while EPA expects that many facilities will already comply with § 125.94(c), in some cases the facility will need to choose one of the compliance alternatives for IM in their subsequent permit cycle. 92 In particular, EPA expects the facility would submit the information require d in § 122.21(r), and the Director would make a determination of BTA for entrainment for that facility . Onl y after the Director has established site - specific BTA requirements for entrainment redu ction will the facility

92 EPA’s costs do not assume zero compliance costs for prior BTA determinations or permit proceedings; all facilities were assessed costs on the basis of technologies in place as described in Section IX.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 253 of 567 have to select the compliance alternative on which it will rely to meet the IM requirements of today ’s rule. The Director may either amend the permit to include the IM requirements or include them in a subsequent permit if the Director determines the proposed controls are consistent with § 125.94(c). The Director would establish a schedule incorporating each of these sequential actions. Inaddition, the rule allows the D irector the flexibility

to grant a request for a w aiver of permit application requirements in § 122.21(r)(6) in order to accomm odate the circumstances described here. See §§ 122.21(r)(1)(i) and 125.95(a). Fourth , in permit applications subsequent to the first permit issued under § 125.94(a)(1) with all require d information submitted under § 122.21(r) , the Director may approve a request to reduce information required, if conditions at the facility

and in the waterbody remain substantially unchanged since the previous application. 93 See § 125.95(c). In addition to all of these flexibilities, today ’s final rule gives advance notice to affected facilities about permit application materials and compliance schedules. While the final rule has both reduce d and streamline d the permit application requirements, the EPA has determined that for many facilities, it may

take as long as 39

93 However, if conditions at the facility or in the waterbody have in fact changed substantially since the previous permit application, the Director will revisit data collection needs and possibly the BTA determination. The presence of any habitat designated as critical, or species listed as threaten ed or endangered after issuance of the current permit (whose range of habitat or designated critical habit includes waters where a facility intake is located) constitutes potential for a substantial change that must be addressed by the owner/operator in su bsequent permit applications, unless the facility received an exemption pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 1539(a) or there is no reasonable expectation of take.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 254 of 567 months to plan, collect, and compile the data and studies required to be submitted with th e permit application (see Section C below for a more detailed discussion of each application element) . The rule therefore specifies that **[INSERT date 45**  **months after effective date of final rule]**  reflects the date after which all permit application requirements must be submitted as specified at § 125.95. Specific permit requirements may not need a full 39 months for completion, therefore the Director may establish a schedule f

or submission of the required permit application elements . For example, planning for required sampling may take 6 months , inclusive of establishing a sampling team , developing sampling protocols, and acquiring necessary equipment . Source water sampling and characterization under § 122.21(r)(4) includes two years’ worth of data. Therefore, the EPA expects a minimum of 30 months will be necessary for submission of § 122.21(r)(4 ) , assuming the facility collects new data; this timeframe could be shorter if the facility

chooses to use existing biological data . Facilities choosing to comply with the IM requirements through either § 125.94(c)(5) or (c)(6) must collect at least 2 years data upon which the facility

would demonstrate that the modified traveling screens or the facility ’s s ys tems of technology have be en optimized to minimize impingement mortality . Therefore, the EPA expects a minimum of 30 months will be necessary for submission of § 122.21(r)(6 ) , assuming the facility collects new data . Collection of entrainment characterization data and studies shoul d occur in parallel with IM studies and sampling . Thus , after the initial 6 month planning period, f acilities that do not already have recent entrainment characterization data will collect a minimum of 2 years entrainment data under § 122.21(r)(9). Facili ties are expected to need an additional 9*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 255 of 567 months to assemble the entrainment data and studies as required by § 122.21(r)(9) through (12) . Therefore, the EPA has concluded that as many as 39 months will be necessary for final submission of all requirements under § 122.21(r). This time frame will be adequate for facilities under 125 mgd AIF; facilities over 125 mgd AIF also need to have their 122.21(r)(10) to (12) studies p eer reviewed. The EPA expects 3 months will be needed for completion of peer review requirements and generation of a final report. However, many of the facilities over 125 mgd AIF were subject to the Phase II rule before it was suspended (that is, all ele ctric generators over 125 mgd AIF are also above 50 mgd DIF), and likely

need less time for up front planning and/or data collection. Therefore, the EPA has concluded that as many as 39 months will be adequate for these facilities to meet all requirements under § 122.21(r). These time frames are consistent with the timeline EPA included in the proposed rule , and also matches the 3 1⁄2 years previously

provided in the Phase II rule for data collection and studies . EPA notes the submission of the studies required with the permit application should not be confused with the schedule for compliance with the BTA requirements , as discussed below . EPA has also sought to sequence the impingement mortality controls so that a facility may sel ect and implement these controls after the Director’s determination of controls on entrainment. With respect to entrainment requirements, existing facilities withdrawing greater than 125 mgd AIF must submit permit application materials including the studies prescribed in today ’s final rule at § 122.21(r)(9) through (13) in order to help the Director determine what entrainment controls to require at the facility. Facilities at or below this threshold must submit any information requested by the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 256 of 567 Directo r. The Director will then review these materials and determine if further entrainment controls are necessary . Once the BTA requirements for entrainment have been established, the facility would finalize its chosen method for compliance with impingement mor

tality under § 125.94(c). It would then be appropriate for the Director to develop a schedule whereby the facility would proceed to design, construct, and implement its technologies for impingement mortality , for entrainment, or for both together should the same technology addresses both impacts. In this manner, the EPA has harmonized the schedules for meeting both impingement mortality requirements and entrainment requirements. EPA further notes that approximately 2 percent of facilities have no controls in place for impingement or entrainment, or that a facility may choose to install modified traveling screens as part of its compliance response . In these circumstances, not only does EPA expect such decisions to be delayed until after the Director has determined the B T A requirements for entrainment, EPA acknowledges that the required optimization study of § 122.21(r)(6) cannot be completed until after the technology has been designed and constructed. EPA has provided the Director the flexibility to establish an appropriate schedule for submission of such studies under § 125.95(a)(2). After the effective date of the regulation, when the first permit implementing the new regulatory requirements is issued, permitting authorities ty pically consider the need to allow facilities some period of time to come into compliance. Under today ’s final rule, facilities will have to comply with the impingement mortality and entrainment requirements as soon as practica b l e according to the schedule of requirements set by the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 257 of 567 Director. The concept of compliance schedules may be found in the generally applicable NPDES regulations at 40 CFR 1 22.47. Because section 316(b) has no statutory deadline for meeting the “best available technology for minimizing adverse environmental impact” standard, there is no statutory bar to use of a compliance schedule in appropriate circumstances. The EPA reco gnizes that it will take facilities time to upgrade existing technologies, and install new technologies, and that there are limits on the number of facilities that can be simultaneously offline to install control technology and still supply goods and service s to orderly , functioning markets. Itis appropriate for the Director to take this into account when establishing a deadline for compliance . Any such schedule would take into account factors provided in § 125.98(c), such as measures needed to maintain adequate energy reliability by an electric generating facility , or extenuating circumstances such as scheduled production outages at a manufacturing facility . There may

be overlap in the technologies used to comply with impingement mortality and entrainment standards, which could result in the facility needing more time to comply

with the impingement mortality requirements. For example, if a facility plans to retrofit to wet cooling to wers to reduce entrainment, the wet cooling towers technology will also comply

with the impingement mortality standard under § 125.94(c)(1). A s such, the Director would schedule compliance with th e impingement mortality requirements to match the schedule for entrainment requirements . Further, EPA recognizes that in some cases, especiall y where additional entrainment control technologies are required, the facility could require a lengthy

period of t ime to design, construct, and implement control technologies. Therefore, the rule authorizes the Director , at § 125.94(h), to establish*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 258 of 567 interim BTA requirements in a facility ’s schedule of requirements , for impingement mortality , entrainment, or both, where necessary on a site - specific basis. In contrast to the proposed rule, today ’s final rule does not include a requirement for compliance with the impingement mortality standards within eight years. EPA expects , however, that the final rule will generall y result in compliance within a similar period of time . The combination of permit issuance , the Director’s determination of BTA for entrainment, and the subsequent schedule of requirements for impingement mortality will result in some facilities , particularl y those already in a permitting proceeding, or with controls similar to what the new permit requires, being in compliance within a very short time frame. Some facilities that are not now i n a permitting proceeding may need as much as three and a half ye ars to full y complete their studies and data collection, and depending on the types of control selected, may need additional time to design, construct, and implement their technologies. In so me cases, the Director’s determination for entrainment may

result in a facility meeting both the impingement mortality and entrainment BTA requirements in fewer than eight years. All facilities will be required to follow their schedule as determined b y the Director. EPA notes that there is a three - ye ar period after the effective date of this rule before Directors will be receiving permit applications containing the full set of application requirements in § 122.21(r). EPA is aware that currently many NPDES permits for facilities with a CWI S have been administratively continued. For these administratively

continued permits, the Director should consider if any permits would need additional updated information to support the permit issuance decision. The Direc tor*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 259 of 567 may , under 40 CFR 122.21(g)(13), request additional information including any permit application requirements in § 122.21(r). **B. How**  **D oes**  **the Final Rule Reduce Biological Monitoring Requirements?** The EPA has streamlined the biological data and study requirements for both impingement mortality

and entrainment into one comprehensive set of permit application requirements and provisions. The S ource W ater B aseline B iological C haracterization Data , impingement technology performance optimization study, Entrainment C haracterization S tudy, and where applicable, entrainment performance studies are all conducted within the same two year time frame prior to submission of an application for a permit. Further, as shown in Exhibit VIII - 1, EPA 's anal ys is indicates that more than 99 percent of existing facilities wil l choose an alternative for impingement mortality that does not require continual biological compliance monitoring. Thus any required biological data consists solely of that required to be collected to meet the permit application requirements. S ee Section F for further discussion. **Exhibit VIII -**  **1. EPA’s projections of how facilities will choose to comply with the IM Requirements**  **IM Compliance Alternative Intake Count**  **a Percent of Total Intakes**  Closed - cycle recirculating system c 307 18% Design velocity 362 21% Actual velocity 226 13% Existing offshore velocity cap c 10 1% Modified traveling screens 488 29% System of technologies 278 17% Impingement Mortality Performance Standard 12 0.7% De minimis ** b ** b **Total 1682**  **100%** a. EPA’s compliance costs for each facility are based on the sum of the facility’s intake level compliance costs. Some facilities have more than one intake. See IX.B.2 for more information on the use of the survey data.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 260 of 567 b. EPA has not estimated wh ich facilities will be determined to be “de minimis ” under § 125 .94(c)( 1 1 ) by the Director. For purposes of this analysis, EPA has assumed no facilities fall under the “de min imis” provision. c . EPA is not projecting facilities will install closed - cycle recirculating systems or offshore velocity caps to comply with the IM requirements, rather these facilities already have these technologies installed. By merging the data collection and studies into the permit application requirements, EPA expects approximately half of all affected facilities will be able to complete the initial permit application within a few months. 94 Inthe case of a facility that was not previousl y required to collect data and cond uct studies, it may

take up to 4 5 months lead time for a permit to be applied for , and additional time for the permit to be issued. Although the permit application times may be longer for the first permit cycle after this rule, this is a tradeoff for the flexible IM requirements. Once the permit is issued, EPA anticipates very few, if any , facilities will be required to conduct ongoing biological compliance monitoring related to impingement controls; for more d etails, see Section F and Exhibit VIII - 4. Instead, for each subsequent permit cycle each facility would either (1) demonstrate to the Director that facility operations and waterbody characteristics are substantially unchanged, or (2) update any b iological characterization data. Anticipating that NPDES permits are renewed when they expire, the update to the facility ’s biological characterization and any corresponding biological performance evaluations would be conducted approximately every five ye ars.

94 For example, facilities that were subject to Phase II will have already collected most of the data and information as part of the Phase II rule issued February 16, 2004 and implemented up until suspension of that rule on July 9, 2007.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 261 of 567 **C. What Information Will I Be Required to Submit to the Director When I**  **Apply for My NPDES Permit?** Today ’s final rule establishes, at § 122.21(r), permit application requirements for all facilities subject to the requirements of § 125.94 . Each permit a pplication element at § 122.21(r) is described in more detail below. The final rule requires existing facilities to prepare and submit some of the same information as previousl y required for new facilities subject to subparts Ior N ( i.e . , Phase I new power plants and manufacturers or Phase III new offshore oil and gas facilities), namely the information at § 122.21(r)(2) through ( 4 ). In addition, the rule adds subparagraphs for existing facilities to the regulations at § 122.21(r)(4) , as w ell as (r)( 5 ) through (13) to include the information and study requirements sp ecific to existing facilities. In the case of a new unit constructed at an existing facility, EPA expects much of the information submitted by the facility

in previous permit a

pplications would still be current and relevant. Therefore, EPA has reduced the permit application requirements to those necessary

to update the facility ’s previousl y submitted information under § 1 22.21(r)(2), (r)(3), (r)(4), (r)(5), (r)(6 ) , (r)(7 ) and (r)(8) . In other words, the new unit permit application is intended to describe the changes to these documents as a result of the addition of the new unit. Inaddition, the facility must submit information specific to the new unit’s chosen compliance method at § 122.21(r)(14). All existing facilities are required to complete and submit permit application studies to describe the source waterbody ( § 1 22.21(r)(2)), cooling water intake structures ( § 1 22.21(r)(3)), characterize the biological community in the vicinity

of the cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 262 of 567 water intake structure ( § 1 22.21(r)(4)), cooling water sy stem ( § 1 22.21(r)(5)), and operational status ( § 1 22.21(r)(8)) . Facilities that already use a closed - cycl e recirculating sy stem must still submit this information in their permit application. The Director will need, for instance, the biological sampling data in (r)(4) to serve as a record basis for their BTA determination in the permit. Furthermore, in Phas e I, new facilities were required to be commensurate with closed - cycle, to meet the 0.5 fps velocity limit, and to collect two years’ worth of biological data to establish a record basis for impacts at the facility . In addition, the data collected here is important to inform an owner/operator’s evaluation of whether and if so what threatened or endangered species or designated critical habitat are or may be present in the action area . All existing facilities must describe their existing impingement and entrainment technologies or operational measures and a summary of their performance, including but not limited to reductions in impingement mortality and entrainment due to intake location and reductions in total water withdrawals and usage (§ 122.21(r)(5)(ii i)). All facilities must also complete and submit their chosen compliance method for impingement mortality ( § 1 22.21(r)(6)) . This includes identification of any requests for BTA determinations under § 125.94(c)( 11 ) de minimis rates of impingement or § 125 .94(c)( 12 ) low capacity utilization power generation units . In addition, the owner or operator of an existing facility

must submit the information required under paragraph (r)(6) for the alternative specified at 40 CFR 125.94(c) that the owner or operator of an existing facility chooses to rel y on as its method of compliance with the BTA Standards for Impingement Mortality specified in 40 CFR 125.94. Because the IM compliance options §*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 263 of 567 125.94(c)(1 ) , (2), and (4) include pre - approved technologies, the owner or operator of a facility choosing one of these three options to comply with the IM requirements does not have either biological studies or biological compliance monitoring related to the applicable IM standard. Compliance options § 125.94(c) ( 3), ( 5 ) , and (6) are streamlined options. For these three options, the permit application element § 1 22.21(r)(6 ) further requires a site - specific study for the purposes of technology optimization to minimize impingement mortality , including additional biological data collection that in most cases would occur duri ng the same two year period of data collection for the S ource W ater B aseline B iological Characterization D ata required under § 1 22.21(r)(4) to charact erize the baseline, and a demonstration that the operation of specific technologies at your facility have been optimized to minimize impingement mortality . The owner or operator of a facility

choosing one of these three options to comply with the IM requirements do not have ongoing biological compliance monitoring as part of the applicable IM standard . As discussed in the previous section, the Director can establish a schedule 95 for submitting the optimization study if the facility

first needs to install additional technology for IM . All existing facilities may submit to the Director additional permit application studies to describe biological survival studies that address technology efficacy and other studies on entrainment at the facility ( § 1 22.21(r)(7)). This requirement does not impose

95 The Director could, for example, issue a permit before the optimization study has been completed, and include a schedule for submission of the optimization study in the newly issued permit.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 2 64 of 567 any new or additional study

requirements. This permit application element includes the submission of existing studies conducted b y or relevant to the facility . Further, the burden of this requirement has been reduced since proposal by onl y referring to studies of entrainment . All existing facilities that withdraw more than 125 mg d AIF 96 of water for cooling purposes must also submit additional information to characterize entrainment and assess the costs and benefits of installing various potential technological and operational controls. These facilities are required to submit to th e Director additional permit application studies including § 122.21(r)(9), Entrainment C haracterization S tudy ; § 122.21(r)(10), C omprehensive T echnical F easibility and C ost Evaluation S tudy ; § 122.21(r)(11), B enefits V aluation S tudy ; and § 122.21(r)(12), N on - water Q uality Environmental and O ther Impacts A ssessment. As with the biological data collection required of some facilities under § 122.21(r)(6 ), EPA expects biological data collection for the purposes of entrainment characterization to occur during the same two year period of biological data collection required under § 1 22.21(r)(4 ). EPA notes that facilities below the 125 mgd threshold are not automatically exempt from entrainment

96 AIF is calculated from the most recent three years ’ data or five years in subsequent permit cycles . As such, AIF is a variable number. It is possible that a facility could transition from below 125 mgd to above 125 mgd if the facility significantly increases withdrawal of cooling water, such as if the facility increases capacity or if it adds a new unit. In these cases, the facility will then be required to conduct the studies and meet the permit application requirements at (r)(9) - (13). This consequence is intended to incentivize facilities to reduce or reuse water for cooling, thereby avoiding the need for additional permit application s tudies.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 265 of 567 re quirements. The Director may determine that entrainment studies may be required or that entrainment controls may need to be installed for any cooling water intake structure. See the Section VI of this preamble for more information. The final rule further requires the studies at (r)(10) through (r)(12) be subject to an external peer review as required at (r)(13 ) ; a separate peer review is not required for § 122.21(r)(9 ), as it is implicitly reviewed via its use in (r)(10) and (r)(11). EPA expects the facility would first notify the Director of the peer review in advance. For example, facilities could identify

their peer reviewers near the beginning of their biological data collection for the required Entrainment C haracterization S tudy at § 122.21(r)( 9 ). Since a facility ’s permit application requires two years of biological data, EPA expects this is more than enough time for the facility to identify

peer reviewers, and for the Director to disap prove of a peer reviewer or require additional reviewers. Further, this provides the Director ample opportunity to confer with those agencies with responsibility for fish and wildlife potentially

affected by

the cooling water intake structure, including other Federal, State, and Tribal agencies. Similarl y, in the case of permits for electric generating utilities, EPA expects this is enough time to confer with state co - regulators such as public utility

commissions, or independent sy stem operators whose respo nsibility it is to ensure reliability

of the electricity

grid. To minimize the overall time required to conduct a peer review, all studies conducted b y the facility under § 122.21(r)(10) through (12) will be subject to peer review at the same time, in a ho listic fashion. Additional guidance on conducting peer review is available on EPA’s Peer Review Program website at www.epa.gov/peerreview. EPA expects the Director will use the permit application*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 266 of 567 information, studies , and peer review results to assess the impingement and entrainment impacts of the cooling water intake structure and determine appropriate technological or operational controls, or both, as necessary . While all facilities must submit § 122.21(r)(2) through (6) and (r)(8) and , where applicable (r)(7) , EPA has reduced the permit application requirements based on the facility ’s chosen compliance method for impingement mortality . Exhibit s VII I - 2 and VIII - 3 below illustrate the permit application requirements as they relate to an existing facility ’s chosen compliance methods . EPA expects permit application requirements for new units will consist of updates to previously submitted permit applications for the rest of the existing facility

at which the new unit is being constructed. F or a new unit at an existing facility , EPA expects that only the appropriate and relevant updates to the existing facility’s permit application materials are required (in addition to newly

developed materials required at § 122.21(r)(14)) . For example, the facility would update § 122.21(r)(3) to indicate the addition of the new unit, any new intakes associated with the new unit, expected operational characteristics, etc. For the owner or operator of a new unit and with an AIF greater than 125 mgd , the permit application materials under § 122.21(r)(9) - (1 3 ) are required. In those circumstances where data specific to the facility indicate that compliance with the requirements of paragraphs (e)(1) or (2) of § 125.94 for a new unit would result in compliance costs wholly out of proportion to the costs EPA considered in establishing the requirements at issue, or would result in significant adverse impacts on local air quality, significant adverse impacts on local water resources other than impingement or entrainment, or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 267 of 567 significant adverse impacts on local energy markets, the rule requires the submission of such data as part of 122.21(r)(14). EPA notes that when a new unit in creases an existing facility ’s A IF greater than 125 mgd, the permit application requirements also include 122.21(r)(9) through (13). Further, facilities may need several years to complete studies and data collection and, depending on the types of controls selected, may need additional time to design and construct their technology . Thus while the rule requires the permit application for a new unit at least 180 day s prior to commencing cooling water withdrawals, it is in the facility ’s best interest to submit this data well in advance in order to prevent any delay s in the Director’s review of permit application materials and subsequent issuance or renewal of the facility’s NPDES permit . For the owner or operator of a new unit opting to comply via 125.94(e)(2) the application materials require d under 122.21(r)(14) must demonstrate entrainment reductions equivalent to 90 percent or greater of the reduction that could be achieved through compliance with 125.94(e)(1 ). **Exhibit VIII -**  **2. Summary of permit**  **application requirements for existing facilities according to existing**  **facilities’ chosen method for compliance with impingement mortality standard Compliance**  **approach to Impingement**  **§ 122.21 subsection**

**(r)(2) (r)(3)**  **(r)(4) (r)(5)**  **(r)(6) (r)(6)(i)**  **(r)(6)(ii) (r)(8)**  Closed - cycle recirculating system Yes Yes Yes Yes Yes No No Yes Design intake velocity Yes Yes Yes Yes Yes No No Yes Actual intake velocity Yes Yes Yes Yes Yes No No Yes*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 268 of 567 Existing offshore velocity cap Yes Yes Yes Yes Yes No No Yes Modified traveling screens Yes Yes Yes Yes Yes Yes No Yes Combination of technologies Yes Yes Yes Yes Yes No Yes Yes Impingement Mortality Performance Standard Yes Yes Yes Yes Yes Maybe Maybe Yes

**Exhibit VIII -**  **3. Summary of permit**  **application requirements for existing facilities: entrainment**  **Compliance approach to Entrainment**  **§ 122.21 subsection (r)(7)**  **(r)(8) (r)(9)**  **(r)(10) (r)(11)**  **(r)(12) (r)(13)**  Closed - cycle recirculating system Yes Yes Var. a Var. a Var. a Var. a Var. a Director BTA entrainment determination: facility AIF above 125 mgd Yes Yes Yes Yes Yes Yes Yes

Director BTA entrainment determination: facility AIF 125 mgd or below Maybe Maybe Maybe Maybe Maybe Maybe Maybe

a. Director has the discretion to waive. In addition, the Director may set information requirements not included in today ’s rule to aid in best professional judgment permitting, such as will occur for entrainment at facilities below 125 mgd AIF , and for impingement and entrainment at existing facilities below 2 mgd DIF , neither of which are required by today ’s rule to submit items (r)(9) through (r)(13 ) . The Director may find aspects of the permit application requirements to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 269 of 567 be relevant in such situations. A summary of each permit application requirement follows. 97 1. § 122.21(r)(2) Source W ater P hy sical Data This requirement is unchanged from the Phase I rule and the 2004 Phase II rule. The facility

is required to submit data to characterize the facility and evaluate the ty

pe of waterbody potentiall y affected b y the cooling water intake structure. Th e applicant is required to submit a narrative description and scaled drawings showing the phy sical configuration of all source water bodies used b y the facility, including areal dimensions, depths, salinity

and temperature regimes, and other documentation that supports the determination of the waterbody ty pe where each cooling water intake structure is located; identification and characterization of the source waterbody ’s hydrological and geomorphological features, and the methods used to conduct any ph ys ical studies to determine the intake’s area of influence in the waterbody and the results of such studies; and locational maps. The Director uses this information to evaluate the appropriateness of any design or technologies p roposed b y the applicant. 2. § 122.21(r)(3) Cooling W ater Intake S tructure Data This requirement is unchanged from the Phase I rule and the 2004 Phase II rule. This data is used to characterize the cooling water intake structure and evaluate the

97 Where a closed - cycle recirculating system withdraws greater than 125 mgd AIF, the information required in § 122.21(r)(9) to (13) is required, unless the Director reduces or waives some or all of the information required.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 270 of 567 potential for impingement and entrainment of aquatic organisms. Information on the design of the intake structure and its location in the water column allows evaluation of which species and life stages might be subject to impingement and entrainment. A diagram of th e facility ’s water balance is used to identify the proportion of intake water used for cooling, make - up, and process water, as well as any cooling water supplied by alternate sources, such as reuse of another facility ’s effluent. The water balance diagram also provides a picture of the total flow in and out of the facility , and is used to evaluate gray water, waste water, and other reuses in the facility . The applicant is required to submit a narrative description of the configuration of each of cooling wat er intake structure and where it is in the waterbody and in the water column; latitude and longitude in degrees, minutes, and seconds for each cooling water intake structure; a narrative description of the operation of each of cooling water intake structure, including design intake flows, dail y hours of operation, number of days of the ye ar in operation and seasonal changes, if applicable; a flow distribution and water balance diagram that includes all sources of water to the facility , recirculati ng flows, and discharges; and engineering drawings of the cooling water intake structure. 3. § 122.21(r)(4) Source W ater B aseline B iological C haracterization D ata This information is similar to that required in the Phase I rule. Existing facilities are required to characterize the biological community in the vicinity

of the cooling water intake structure and to characterize the operation of the cooling water intake structures. This supporting information must include existing data if they are available. How ever, the facility

may supplement the data using newl y conducted field studies if it chooses to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 271 of 567 do so. The information the applicant must submit includes identification of data that are not available and efforts made to identify sources of the data; a list of species (or relevant taxa) for all life stages and their relative abundance in the vicinity of the cooling water intake structure; and identification of the species and life stages that would be most susceptible to impingement and entrainment. All spec ies should be evaluated, including the forage base and those species most important in terms of significance to commercial and recreatio nal fisheries. In addition, the applicant must identify and evaluate the primary period of reproduction, larval recruitment, and period of peak abundance for relevant taxa; data representative of the seasonal and daily activities (e.g., feeding and water c olumn migration) of biological organisms in the vicinity of the cooling water intake structure . In addition, instead of the information required at § 122.21 (r)(4)(vi), the owner or operator of an existing facility or new unit at an existing facility must identify all Federall y- listed threatened and endangered species and/or designated critical h abitat that are or may be present in the action area pursuant to paragraph § 125.95 (f). The action area can generall y be considered the area in the vicinity of impingement and entrainment at the cooling water intake structure. The applicant must also include documentation of any public participation or coordination with Federal or State agencies undertaken. If the applicant supplements the information with data collected using field studies, supporting documentation for the Source Water Baseline Biolog ical Characterization Data must include a description of all methods and quality assurance procedures for sampling, and data anal ys is including a description of the study area; taxonomic identification to the lowest taxon possible of sampled and evaluated biological*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 272 of 567 assemblages (including all life stages of fish and shellfish); and sampling and data anal ys is methods. The sampling or data anal ys is (or both) methods used must be appropriate for a quantitative survey and based on consideration of methods used in other biological studies performed in the same source waterbody . The study area should include, at a minimum, the area of influence of the cooling water intake structure. The applicant may

also identify

protective measures and stabilization ac tivities that have been implemented and describe how these measures and activities affected the baseline water condition in the vicinity

of the intake. EPA is adding item (ix ) , (x ) and ( x i ) to the S ource W ater B aseline B iological C haracterization D ata for existing facilities. It em (ix) simply defines the term “ Source Water Baseline Biological Characterization Data .” EPA is requiring item ( x i ), identification of fragile species found at the facility. EPA notes th at in contrast to the proposed rule, the permit application does not require submission of the proposed “species of concern.” EPA found that the term “species of concern” was too similar to terms as used in the context of T&E (threatened and endangered) sp ecies, and may cause confusion over existing Services or State requirements for such species. Further, despite EPA’s efforts to distinguish between species of concern and RIS (representative indicator species) in the NODA (77 FR 34325, June 11, 2011 ), EPA found that many commenters were still confused b y the language. Instead, EPA is adopting the term “fragile species” and using the term exactly as it is used with the impingement mortality data and criteria used in calculating the impingement mortality stan dards of the rule. The definition for “fragile species” at § 125.92 is a species of fish or shellfish that has an impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 273 of 567 survival rate of less than 30 percent even when the BTA technology of modified traveling screens are in operation. EPA has identif ied fragile species in the Chapter 11 of the TDD for the final rule. Further, EPA is providing examples , in the list of 14 specific species in today ’s regulatory

definition as a non - exclusive list . This list includes only those species specificall y analyzed as part of the performance standards development. If a permit applicant can sufficientl y demonstrate a record basis, the permitting Director may deem a particular species to be a fragile species f or the purpose of a particular permit . American shad ( Clupeidae ), bay anchovy ( Engraulidae ), and blueback herring ( Clupeidae ) belong to families that are specifically identified in the TDD Chapter 11 as examples of species that may be, at the Director’s discretion, excluded from performance standards on the basis of impingement survival . A s another example , threadfi n shad (a species not specificall y identified as fragile in today’s rule) are prone to fall die - off when the water temperature reach es 42 degrees. The EPA does not intend for such naturally occurring mortality to be counted against a facility’s performance in reducing impingement mortality . EPA is aware of limited success in flow reduction and b ehavioral deterrent sy stems in protecting fragile species. However, there are no demonstrated and available technologies for industry as a whole to address fragile species. EPA has long recognized these species as having low survival rates under the best o f conditions, and established different mechanisms to address these in today ’s final rule. Today ’s BTA for impingement mortality

allows the Director to establish site - specific controls under § 125.94(c)( 9 ) to address fragile species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 274 of 567 EPA notes the change in terminology to “fragile species” eliminates the proposed rule burden on States to review and approve each facility ’s site - specific species of concern, and eliminates confusion over any T&E or RI S that may be subject to more stringent requirements under other Federal, State, and Tribal law. Further, use of “fragile species” instead of “species of concern” greatl y increases the transparency of the Agency ’s impingement mortality performance standards. In addition, EPA notes that (r)(4)(vi) requires the applicant to submit information on all threatened and endangered species, not just those T&E species that are fish or shellfish. Examples of T&E species that are not fish or shellfish are corals, sea turtles and marine mammals. 4. § 122.21(r)(5) Cooling W ater S ys tem D ata The Director uses this data in determining the appropriate standards that would be applied to the facility. Facilities are able to use this information, along with the water balance diagram required by § 1 22.21(r)(3), to demonstrate the ex tent to which flow reductions have already been achieved at the facility level . The applicant must provide the following information for each cooling water intake structure they use: a narrative description of the operation of the cooling water system and its relationship to cooling water intake structures (including the use of helper towers) ; the proportion of the design intake flow that is used in the sy stem including a distribution of water used for contact cooling, non - contact cooling, and process uses ; a distribution of water reuse (to include cooling water reused as process water, process water reused for cooling, and the use of gray water for cooling ); description of reductions in total water withdrawals including*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 275 of 567 cooling water intake flow reductions already achieved through minimized process water withdrawals; description of any cooling water that is used in a manufacturing process either before or after it is used for cooling, including other recycled process water flows; the proportion of the source waterbody withdrawn (monthly); the number of day s of the ye ar the cooling water s ystem is in operation and seasonal changes in the operation of the sy stem, if applicable. The applicant must also submit a description of existing impingement and entrainment technologies or operational measures and a summary of their performance, including for example reductions in entrainment due to intake location and reductions in total water withdrawals and usage, and efficiencies in energy production for each producing unit that result in the use of less cooling wat er, including for example combined cycle and cogeneration. For example, the applicant may provide comparative density

data for the intake to demonstrate the extent to which location of the intake has reduced adverse environmental impact. The additional inf ormation at § 122.21(r)(5)(iii) is specific to those process units that use cooling water for purposes other than power generation or steam, and where the owner or operator intends to comply with the BTA for IM through either the use of flow reduction meas ures or the reuse of other water for cooling purposes. 5. § 122.21(r)(6) Chosen Method of Compliance with Impingement Mortality Standard Today ’s final rule is flexible in providing seven different compliance options for meeting impingement mortality requirements. Under § 122.21 (r)(6), the facility must identify its approach to meet the impingement mortality standards. The facility must*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 276 of 567 identify the compliance method for the entire facility or, alternatively , the compliance method for each cool ing water intake structure at the facility. Finding it to be unnecessary because the facility

will already

have a set of requirements to meet based on its chosen method of compliance, EPA has eliminated the proposed requirement for a separate i mpingement m ortality reduction plan. In addition, monitoring and studies conducted under the reduction plan is no longer required b y all facilities. Instead today’s final rule specifies data collection requirements onl y in those instances where the facility must demonstrate a particular performance outcome as described below. Facilities choosing to comply with § 125.94(c) b y operating a modified traveling screen (under § 125.94(c)(5)) must submit an impingement technology performance optimization study under § 122.21(r)(6)(i). The site - specific study must demonstrate the modified traveling screen as defined at § 125.92 has been optimized to minimize impingement mortality . The study must include a minimum of two years of biological data collection . This time frame is consistent with the requirements at paragraph (r)(4)(iv) to identify

primary periods of reproduction and peak abundance, as well as (r)(4)(v) to provide data representative of the seasonal activities, both of which would require at least one year worth of data collection . EPA expects facilities will either use existing biological data already required under (r)(4) to complete their site - specific impingement studies, modify

their biological data collec tions under (r)(4) to be comprehensive and inclusive, use existing performance studies, or collect supplemental data necessary to make their demonstrations . If a facility is using previously collected data or studies that are more than 10 ye ars old, the fa cility must demonstrate the data is still relevant and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 277 of 567 representative of the facility . If a facility intends to return organisms to a different waterbody from which they are withdrawn, a request for consideration of this must be made to the Director under (r)(6). The rule specifies sampling at least monthly during the two ye ar data collection effort of the impingement technology performance optimization study, and requires documentation of methods used including counting of moribund organisms, lat ent mortality , holding times, and counting of entrapment. The Director may establish more frequent collection , as well as specify sampling methods and additional protocols to be used. If the facility intends to return fish and shellfish to a different waterbody than the source waterbody that is used to withdraw cooling water, EPA expects this would be identified as part of § 122.21(r)(6)(i). While EPA does not expect this situation occurs very frequentl y, the permit application information at (r)(6)(i) along with (r)(4) would provide the Director the information needed to determine whether such a return location is appropriate. 98 If the site - specific impingement study demonstrates the modified traveling screen (as defined at § 125.92) has been optimized to minimize impingement mortality , the Director may then determine the modified traveling screen is the best technology

available for impingem ent mortality at the site. The Director would then include permit conditions that ensure the technology will perform as demonstrated. If the

98 For example, the St. Lucie generating facility determined that this arrangement was not appropriate at their site; see DCN 10 - 6515. The Brunswick facility, has a fish return flume that goes to a tributary rather than the intake canal or the river. This arrangement places the a quatic organisms away from the intake canal and in a more gentle water environment to increase the organisms’ survival; see DCN 10 - 6569.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 278 of 567 Director determines that additional data is required to identify permit operating conditions, the Director has the authority to establish such requirements under § 125.95(d). Note that the EPA envisions the study will function to optimize performance, which is not the same as requiring a study merely demonstrating a specific numeric level of performance for impin gement mortality has been or can be achieved . For the majority of facilities, EPA expects annual performance using modified traveling screens will exceed the Agency ’s calculated average annual performance standards for impingement mortality . Several ex amples of modified traveling screens in EPA’s record show annual performance for impingement mortality that is superior to the impingement mortality performance standard (e.g., lower than 10 percent). Similarly, facilities choosing to comply w ith § 125.94(c) b y operating a s ystem of technologies (under § 125.94(c)(6)) that will achieve the impingement mortality standard must submit a impingement technology performance optimization study under § 122.21(r)(6)(ii). The site - specific study must provide a description of the technologies, operational measures, or sampling approaches or any combination of them to be used to meet the BTA for impingement mortality . The study must demonstrate that the sy stem of technologies has been opti mized to minimize impingement mortality . EPA notes the “sy stem” may

consist of one or more technologies already in place, or may

be combined with newly

installed technologies. Further, the study must include a minimum of two ye ars of biological d ata collection , as just described. The EPA is aware that it is possible for a facility to reduce its rate of impingement, but the same number of impinged fish die. This has the unintended*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 279 of 567 consequence of increasing the percent impingement mortality calculated by

the facility . EPA does not intend for such facilities to be penalized for significant reductions in impingement rates obtained through existing technologies and practices in place. Therefore, one difference in the required study for the sy stem of technologies compliance alternative (as compared to the study required for modified traveling screens) is an understanding that operational measures, best management practices, intake location, and other technologies do not alway s lend themselves to direc t impingement mortality measurements or data collection . Thus the study can include flow measurements and monitoring the rate of impingement (as opposed to directly monitoring mortality) as described below. If the facility

chooses to rely

on cre dit for reductions in the rate of impingement already achieved, the impingement technology performance optimization study must document the reductions to be used as credit. The estimated reductions in impingement must be based on a comparison of the facili ty to a once - through cooling s ys tem with a traveling screen located on the shoreline of the source waterbody . For example, a facility with an offshore intake, an intake canal, or an intake located immediatel y downstream of a dam in a cold water s tream, could demonstrate the population of fish at the intake is lower in these areas, resulting in lower rates of impingement. This provision is intended to allow a facility that conducted or completed a baseline characterization under the Phase II rule t o use that same information as part of their demonstration under this rule . As discussed in Section VI, EPA has identified flow reduction as one of the best way s to reduce both impingement and entrainment. Today ’s final rule, as part of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 280 of 567 sy stem of techn ologies compliance option at § 125.94(c)(6), provides the owner or operator of a facility

the opportunity

to demonstrate flow reduction as part of meeting the IM standards. If the facility chooses flow reduction to reduce impingement, the study at § 122.21(r)(6)(ii) must include two years of intake flows measured daily . This flow information plus the data collected under § 122.21(r)(4)(iv) would be used to document how the fl ow reduction results in a reduced rate of impingement, as well as documenting the extent to which such reductions are seasonal or intermittent. Many pumps operate at only one speed, which doesn’t allow the facility to adjust its intake flow to changing con ditions . As a potential application of § 125.94(c)(6), EPA is aware of a manufacturing facility that installed multiple pumps of different sizes, and the operator only utilized those pumps that were necessary to obtain the exact amount of cooling wat er needed . As another example, variable speed drives offer many facilities an opportunity to reduce their intake flows b y as much as 10 percent. Variable speed drives are available at all facilities, and EPA expects variable speed drives will be considered when replacing existing recirculating pumps ; however, EPA also acknowledges variable speed drives may not be practical in all cases. Nevertheless, EPA expects variable speed drives will be considered b y the Director when establishing entrainment requirem ents under today ’s final rule. EPA provided an example of how a facility would receive credit for existing technologies in the NODA (see 77 FR 34322, June 11, 2011 ). An additional sample calculation that includes flow reduction is provided later in this se ction. The study must identify

each of these contributing components, and requires the calculation of the impingement mortality reflecting each component of the sy stem. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 281 of 567 impingement technology

performance optimization study must demonstrate the sy stem o f technologies has been optimized to minimize impingement mortality . In addition, the study must document the percent impingement mortality reflecting optimized operation of the total sy stem of technologies, operational measures, and best management practi ces at § 122.21(r)(6)(ii)(D). The Director may then determine the s ys tem of technologies is the best technology

available for impingement reduction at the site. The Director would then include permit conditions that ensure the technology will perform as de monstrated. 6. § 122.21(r)(7) Entrainment P erformance S tudies EPA proposed that a facility must submit all previously conducted performance studies, but has revised this provision in the final rule to include only entrainment related studies. Impingement p erformance studies, where relevant, are already part of the permit application at § 122.21(r)(6). This avoids imposing a requirement on all facilities to submit previous impingement studies that may be unnecessary , and eliminates a burden on the Director t o review all such studies, many of which may

no longer be relevant. 99 Under today ’s final rule, the applicant must submit a description of any biological survival studies conducted at the facility and a summary of any conclusions or results, including the f

ollowing: site - specific studies addressing technology efficacy , through facility entrainment survival (distinguished for eggs and larvae) , entrainment analy ses , or

99 For example, the study may be old and no longer representative, the study may address a pilot study of a technology n o longer under consideration by the facility, or the facility may have already selected one of the compliance methods for IM based on pre - approved technologies at § 125.94(c)(1 ), (2) or (4).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 282 of 567 studies conducted at other locations including a justification as to why the data are relevant and representative of conditions at the facility . Because of changes in the waterbody over time, studies older than 10 years must include an explanati on of why the data are still relevant and representativ e of conditions at the facility. I f the data are no longer relevant and representative, the Director may reject the data. The Director uses such studies when establishing technology- based requirements for entrainment. Permit applicants are not required to conduct new studies simply to fulfill this requirement. This requirement is rather aimed at obtaining results for relevant studies that have already been conducted as part of past permit proceedings or for other purposes even if those studies were not completed or conducted entirel y as planned. 7. § 122.21(r)(8) Operational S tatus The applicant must submit a description of the operational status of each unit for which a cooling water intake structure provides water for cooling, including the following: descriptions of each individual unit’s operating status including age of the unit, capacity utilization for the previous five years (including any unusual or extended outages that significantly affect th e facility ’s reporting of flow, impingement, or other data) , and any

major upgrades completed in the past 15 years (e.g., boiler or condenser replacement, changes to fuel ty pe , a new production line ); a description of completed, approved, or scheduled uprates and NRC (Nuclear Regulatory Commission) relicensing status for nuclear facilities; a description of plans or schedules for decommissioning or replacement of units; and a description of current and future production schedules for manufacturing facilitie s. The Director will use such information in determining the BTA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 283 of 567 for entrainment as well as when establishing compliance schedules. For example, where the remaining useful plant life is considerabl y shorter than the useful life of an entrainment technology or where a facility has a planned retirement within the next permit cycle , this information is useful to support a determination regarding that specific entrainment technology . This information would also be used under § 125.94(c)( 12 ) to document infre quently

used power generating units that operate with a capacity utilization of less than 8 percent averaged over a 24 - month block contiguous period and that the Director may

therefore determine warrants IM controls less stringent than (c)(1) through (c)(7). With respect to entrainment, the BTA for entrainment is determined b y the Director for each site, and energy reliability

is one factor the Director may consider when establishing entrainment controls (s ee § 125.98(f)(3)) . EPA expects the information submitted on energy

reliability

will be considered by

the Director when making a BTA determination for entrainment for low CUR units. 8. § 122.21(r)(9) Entrainment Characterization S tudy Facilities that withdraw greater than 125 mg d AIF must develop a study that includes a minimum of two years of entrainment data collection . EPA envisions the facility would extend the data collection methods and frequency to develop the source water characteri zation already required b y § 1 22.21(r)(4) to develop the Entrainment Characterization Study . The study would include complete documentation of the data collection period and frequency of entrainment characterization, and an identification of the organisms sampled to the lowest taxon possible. The data collection must be representative of the entrainment at each intake, and the study must docume nt how the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 284 of 567 location of the intake in the waterbody and the water column are accounted for. The study must document the intake flows associated with the data collection . Consistent with the permit application requirements requiring biol ogical data collection at § 122.21(r)(4) and (6), EPA requires at least two years of data to sufficiently characterize annual, seasonal, and diel variations in entrainment, including variations related to climate, weather, spawning, feeding, and water column migration. Also consistent with the permit application requirements at § 122.21(r)(4) and (6), facilities may use historical data that are representative of current operation of the facility and conditions at the site with documentation regarding the continued relevance of the data. The study must include anal ys is of the data to determine total entrainment and entrainment mortality . Documentation in the study must include the method in which latent mortality would be identified, and all methods and quality assurance/quality

control procedures for sampling and data anal ys is would be described . The sampling and data anal ys is methods must be appropriate for a quantitative survey . This information will help the Director determine the site - specific BTA for entrainment. For facilities with no entrainment technologies currentl y in place, this information characterizes the total potential for entrainment. The information can also be used to demonstrate that technologies and other measures already in place, or site specific factors such as intake location or design, already reduce entrainment. For example, abundance data might demonstrate lower comparative densities that can significantl y lower entrainment rates. The informati on could also be used by new units under § 125.94(e)( 2 ) to demonstrate that an alternative technology or combination of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 285 of 56 7 technologies reduce entrainment at that site to a level commensurate with closed - cycle cooling. 9. § 122.21(r)(10) Comprehensive Technic al Feasibility and Cost Evaluation Study The owner or operator of the facility must submit an engineering study of the technical feasibility

and incremental costs of candidate entrainment control technologies. The study must include an evaluation of techni cal feasibility of closed - cycle cooling and fine - mesh screens with a mesh size of 2 mm or smaller, reuse of water or alternate sources of cooling water , and any other entrainment reduction technologies identified by the applicant or requested by the Director. This study

must include a description of all technologies and operational measures considered (which could include alternative designs of closed - cycle recirculating s ys tems such as natural draft cooling towers, hy brid designs, compact or multi - ce ll arrangements , or the conversion of helper towers to a full y recirculating s ys tem); and documentation of factors that make a candidate technology impractical or infeasible for further evaluation. For example, a discussion of land availability

might inclu de an evaluation of adjacent land , and acres potentially available because of generating unit retirements, production unit retirements, other buildings and equipment retirements, ponds, coal piles, rail yards, transmission yards, and parking lots; decommis sioning of existing units; repurposing of existing land uses; documentation that insufficient acres are available on - site; and evidence of the feasibility of the purchase or other acquisition of property adjacent to the facility . For the anal ys is of water reuse and use of alternate sources of cooling water, the owner or operator must examine the available alternatives for reuse of effluent from*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 286 of 567 within the facility

or from other dischargers in the vicinity . The volume of water available need not be for the full intake flow; reuse of water could contribute to a parti al reduction in flow at the facility . Additionally , if the facility were to retrofit to a closed cycle sy stem, the significant reduction in flow may make nearby

alternative sources more feasible. This analy sis should include an estimate of the cost to buil d any new infrastructure (e.g., piping, pump houses) and the ongoing operational costs (e.g., pump costs) for the Director’s consideration. The final rule require s that the cost information be presented as both the facility ’s compliance costs and the social costs, and in net present value (NPV) terms and the corresponding annual value . Social costs are the costs estimated from the viewpoint of society , rather than individual stakeholders . Social cost represents the total burden imposed on the econom y; it is the sum of all opportunity costs incurred . See Chapter 8 of EPA’s 2010 Guidelines for Preparing Economic Analy ses (DCN 10 - 3258) . Some adjustments to facility

compliance costs to produce social costs cause them to be higher than compliance costs, while other cause social costs to be lower. Although a facility makes investment decisions by taking tax consequences into account (after - tax costs), the favorable tax treatment of investments is viewed as a transfer and not a real resource cost, thus pre - tax cost s are used in social cost anal ys is. From society’s viewpoint, costs in the future must be amortized and discounted to net present value using a social discount rate, rather than a market cost of capital as reflected in market interest rates. The Office of Management and Budget ( OMB ) Circular A - 4 (DCN 10 - 3266) instructs agencies to use both 3 percent and 7 percent discount rates. Certain administrative costs are not borne by*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 287 of 567 a facility, but rather by the D irector , and are social costs. Compliance costs include the facility ’s administrative costs, including costs of permit application, while the social cost adjustment includes the Director’s administrative costs. EPA has estimated the Directors’ adm inistrative costs in the I CR for the final rule, and describes the methodology for estimating these costs in detail in the EA. Facilities may adopt a similar approach to including Director’s administrative costs in their social cost estimates. In additio n, this component is not expected to be large or to vary significantly

across technology

options considered. From a facility ’s viewpoint, downtime costs include lost net revenue, while from society ’s viewpoint, if another facility is dispatched or inventory of manufactured goods can be sold, the onl y social cost of downtime is any increase in marginal costs of production at other facilities dispatched or the cost of holding inventory . Unless a facility can demonstrate that its costs of compliance will result in lower overall supply in the markets in which its products are sold, and that the effect of the lowered supply is an increase in market price and lower quantity of product sold, the facility should not make a social cost adjustment to reflect these larger market impacts. In addition to the required social costs, the owner or operator may choose to provide facility

level compliance costs ; however , such costs must be provided and discussed separatel y from social costs . The cost evaluation component of thi s study must include engineering cost estimates of all technologies considered above and also discuss and provide documentation of any outages, downtime, energy penalties or other effects on revenue . The cost evaluation should be based on least - cost approa ches to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 288 of 567 implementing each candidate technology while meeting all regulatory and operational requirements of the facility . Depreciation schedules, interest rates, further consideration of remaining useful life of the facility as discussed in § 1 22.21(r)(8), and any related assumptions must be identified . The owner or operator of the facility must obtain peer review of the Comprehensive Technical Feasibility and Cost Evaluation Stu dy , as described in S ection 12. 10. § 122.21(r)(11) Benefits Valuation Study The owner or operator of the facility must submit a detailed discussion of the benefits of the candidate entrainment reduction technologies evaluated in § 1 22.21(r)(10) and using data in the Entrainment C haracterization S tudy in § 1 22.21(r)(9 ) . Each category of benefits should be described narratively , and when possible benefits should be quantified in ph ys ical or biological units and monetized using appropriate economic valuation methods. This includ es incremental changes in the impingement mortality and entrainment of individual fish and shellfish for all exposed life stages , estimation of changes in stock and harvest levels of commercial and recreational species, and description of any monetization . This may include monetization using market values, market p roxies ( e.g., models based on travel costs or other methodologies), benefits transfer and stated preference methods. Benefits that cannot be monetized should be quantified where feasible and discussed qualitatively where not . The study must identify increase d or decreased thermal discharges , and must evaluate the potential changes in facility capacity , operations, and reliability due to relaxed permitting constraint s related to thermal discharges. The study must also include discussion of rec ent mitigation efforts*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 289 of 567 already completed and how these have affected fish abundance and ecos ys tem viability in the intake structure’s area of influence. Finally , the study must identify

other benefits to the environment and the community , including improve ments for mammals, birds, and other organisms and aquatic habitats. The owner or operator of the facility must obtain peer review of the benefits evaluation study , as described in S ection 12 . EPA expects peer reviewers to have appropriate qualifications ( e.g. , fisheries biologist, economist) for the subject matter. The Director may consult with EPA and Federal, State and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected b y the cooling water intake structure(s) to determine which peer review comments must b e addressed by the final study . The dollar values in the social benefits anal ys is should be based on the principle of willingness - to - pay (WTP), which captures monetary benefits by

measuring what individuals are willing to forgo in order to enj oy a particular benefit. While the Director must consider benefit and cost information, the Director will also determine if this information is of sufficient rigor to make a decision on entrainment controls on the basis of this information. For instance, the Director may decide not to rel y on benefit - cost information in establishing the entrainment controls when the benefits anal ys is includes only a qualitative discussion of nonuse benefits. Willingness - to - pay

for nonuse benefits can be measured using ben efits transfer or a stated preference survey . However, the rule does not require the Director to require a facility owner or operator to conduct or submit a stated preference survey to assess benefits .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 290 of 567 11. § 122.21(r)(12) Non - Water Quality Environmental an d Other Impacts Assessment The owner or operator of the facility must submit a detailed discussion of the changes in non - water quality environmental and other factors attributed to technologies or operational measures, or both, considered. These changes may include, for example, increases or decreases in the following: energy consumption; air pollutant emissions and their health and environmental impacts; noise; safety concerns, such as the potential for plumes, icing, and availability of emergency

cooling water; grid reliability , including an estimate of changes to facility capacity, operations, and reliability due to cooling water availability ; consumptive water use (including effects of surface water evaporation of thermal discharges); and facility reliability , such as production of steam and impacts to production based on process unit heating or cooling. The owner or operator of the facility must provide for peer review of the Non - Water Quality Environmental and Other Impacts Assessment as desc ribed in the following section. 12. § 122.21(r)(13) Peer Review The owner or operator of the facility must provide for peer review of the permit application studies required at § 122.21(r)(10) Comprehensi ve Technical Feasibility and Cost Evaluation Study , § 122.21(r)(11) Benefits Valuation Study , and § 122.21(r)(12) Non - Water Quality and Other Impacts Assessment . While facilities that withdraw more than 125 mgd AIF must conduct these studies and therefore must provide for peer review, facilities that withdraw equal to or less than 125 mgd AIF may have study requirements including peer review as determined b y the Director. In today ’s final rule , EPA did not adopt separate peer review requirements for the Entrainment Characterization Study at §*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 291 of 567 122.21(r)(9 ) , because this data would be included in the Comprehensive Technical Feasibility

and Cost Evaluation Study, Benefits Valuation Study , and Non - Water Quality and Other Impacts Assessment , and these studies are already subject to peer review. For these reasons, EPA reduced the burden in the final rule by eliminating the peer review requirement for entrainment characterization. EPA recognized at proposal that in many cases it is more efficient for permit a pplicants to combine the required studies into one document and have them reviewed holistically

by a single set of peer reviewers. Such an approach is allowed by the final rule , as long as the peer review panel has the background appropriate to conduct a complete and combined review and the Director approves. The Director may

consult with Federal, State and Tribal fish and wildlife management agencies with resp onsibility for fish and wildlife potentially affected by

the cooling water intake structure(s). Further, the Director may require the owner or operator of the facility

to include additional peer reviewers of the studies . EPA expects peer reviewers to have appropriate qualifications (e.g., in the fields of biology , engineering) for the subject matter. An explanation for any significant reviewer comments not accepted must be included in the final study submission. Additional guidance on conducting peer review is available on EPA’s Peer Review Program website at www.epa.gov/peerreview. 13. § 122.21(r)(14) New Units New units at existing facilities must identify the compliance method for the new unit under the permit application requirements at § 122.21(r)(14) . Where the facility*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 292 of 567 complies with BTA standards for entrainment at § 125.94(e)(1) b y reducing its intake flows commensurate with that of a closed - cycle recirculating s ys tem (as defined at § 125.92(c)(1)) , the BTA standards for impingement mortality will have been met by § 125.94(c)(1). To compl y with the alternative at § 125.94(e)(2), there must be a demonstration that entrainment reductions equivalent to 90 percent or greater of the reductions that could be achieved through compliance with § 125.94(e)(1). 100 Inthis case, permit application requirement § 122.21(r)(14) requires this demonstration to include the Entrainment C haracterization S tudy at § 122.21(r)(9). The Director may determine additional data and i nformation, including data collection , is necessary to make the demonstration. **D .**  **When Are Permit**  **Application Studies Due?** The owner or operator of a facility appl yi ng for reissuance of a permit must submit the information required at § 122.21(r) to the Director no later than 180 day s before the current permit expires. Those facilities that were subject to the section 316(b) Phase II rule from February 16, 2004 until suspension of that rule on July 9, 2007 were

100 Note that a new unit may construct a ne w intake struc ture or utilize capacity from an existing intake structure. For the former, the requirements of (e)( 1are simple to conceptualize and apply. But for the latter, EPA clarifies that the new unit requirements only apply to that portion of the flow that is serving the ne w unit. For a new

unit using an existing intake structure that chooses to comply using (e)(1), demonstrating that the new unit achieves the required reduction in flow should be a relatively simple exercise in identifying intake f

lows and the distribution of cooling water from the intake structure. For a new unit using an existing intake structure that chooses to comply using (e)( 2 ), the facility would demonstrate that it has reduced entrainment for that portion of the intake flow serving the new unit by 90 percent ; the facility wo uld not be required to reduce entrainment for the flow of the entire intake structure by 90 percent , unless the Director makes such a site - specific determination for entrainment at the existing units a s well.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 293 of 567 already collecting some inf ormation required at § 122.21(r). EPA has structured this rule to take advantage of those data and expects facilities to use them when they satisfy requirements for permit applications. In some cases, required permit application information might have been collected, but reports might not have been generated or finalized prior to the rule suspension in 2007 . Further, facilities not subject to the Phase II rule ( e.g., existing power plants below 50 mgd DIF and all existing manufacturers ) might not have collected this information or might not have collected information to identify permit operating conditions. In those cases, facilities would have to collect additional data in order to have two years of biological data collection . EPA expects associated studies and reports will take several additional months to complete . For this reason, EPA has established a provision for permit application submittal for a permit expiring prior to **[INSERT date 4**  **5 months**  **after the effective date of the final rule]**  , allowing the Director flexibility to delay application requirements based on a showing b y the owner or operator that it could not develop the information by the time required for submission of the permit application. The Director would then establish a schedule for submission of the delayed permit application requirements. EPA notes that the Director has the discretion to require additional studies, data collection , or an on - site inspecti on as part of the permit process. Facilities whose permit expires after **[INSERT date 4 5**  **months after effective date of the final rule]**  would submit all required materials in § 122.21(r) with their permit renewal application.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 294 of 567 New units at existing facilities must submit the information required at § 122.21(r) to the Director no later than 180 day s before commencing operation of the new unit. Because these units are being constructed at a facility that is already

operating, the facility will have already

submitted many

of the permit application materials. The addition of a new unit would require an update of or supplement to permit application materials that have already been submitted. New units take significant time and resourc es to plan, design, and construct ; therefore the final rule does not have a provision to waive permit application requirements based on a showing b y the owner or operator that it could not develop the information by the time required for submission of the permit application. F or permit renewals subsequent to the first permit issued under today ’s rule , the new unit would be included in the assessment of the entire facility and would no longer require unique permit application submissions . As discussed previ ously , the owner or operator is encouraged to submit applications well in advance of the 180 day requirement to avoid delay . EPA is aware that some intake structures withdraw from a manmade lake or reservoir that is stocked and managed b y a State or Federal natural resources agency . In some cases, the biological characterization of the source water is heavily influenced by the actions of the natural resources agency . Further, the results of biological data collection and studies may be confounded by

such actions. Today ’s final rule at § 125.95(a)(3) gives the Director discretion to waive some or all of the permit application requirements of § 122.21(r) in such circumstances.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 295 of 567 In permit terms subsequent to the first permit issued under the final rule , the facility will re - submit the § 1 22.21(r) permit application studies , while the rule still includes two years of biological data collection for some facilities. In this manner, the biological characterization over time would be routinely evaluated, i.e., every

5 years under a standard permit cycle. To reduce the burden of such data collection, however, the final rule provides that the owner or operator of a facility may submit a request to the Director to reduce the information required . See 40 CFR 125.95(c). In most cases, EPA anticipates the facility

would make any

such request prior to conducting its two years of biological data collection . Therefore the request for reduced infor mation requirements must be submitted to the Director at least two years and six months before the expiration of the facility ’s NPDES permit . The Director may approve such a request if conditions at the facility

and in the waterbody remain substantially unchanged since the previous permit application . 101 EPA expects the Director would assess the relevant previously submitted information and determine whether it remains representative of current source water, intake structure, cooling water s ys tem, and operating conditions. Accordingl y, the Director may

accept or reject any

part of the request.

101 The presence of any habitat designated as critical, or species listed as threatened or endangered after issuance of the current permit (whose range of habitat or designated critical habit includes waters where a facility intake is located) constitutes potential for a substantial change that must be addressed by the owner/operator in subsequent permit applications, unless the facility received an exemption pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 1539(a) or there is no reasonable expectation of take.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 296 of 567 **E. How Will the Director Determine the Best Technology Available for**  **Minimizing Adverse Environmental Impacts?** 1. Review and Approval of Permit Application M aterials Under today ’s rule, the Director will review all materials submitted by an existing facility with its permit application to determine appropriate NPDES permit conditions and requirements to minimize impingement mortality and entrainment . As stated at 40 CFR 125.98(a), the Director shall not is sue a permit before receiving a permit application form and any supplemental information which are completed to his or her satisfaction (see existing Permit Application and Special NPDES Program Requirements at 40 CFR 122.21(e)). Facilities with a design intake flow at or below 2 mgd will continue to have permit conditions set on a case - by- case, best professional judgment basis under 40 CFR 125.90(b) and 401.14. For such facilities, however, the Director may choose to apply some portions of the permit application conditions in today ’s rule to aid in the BPJ determination. The Director is encouraged to expeditiously provide any

comments on submitted materials so the facility

can make responsive m odifications to its information gathering activities . For permit applications subsequent to the first permit issued under today ’s rule, the Director could indicate whether reduced or different information must be submitted with the permit application . More specific responsibilities are described below: a. I f the Director has made a BTA determination for entrainment before the effective date of the rule, and substantially the same information was already submitted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 297 of 567 and considered b y the Director in making that determination, under § 125.98( g ) the Director may

proceed with the Determination of BTA without requiring the owner to submit the information required in § 122.21(r). To clarify further, EPA has included a “ transition” provision at § 125.98(g) of to day ’s rule that makes it clear that for any facility that has submitted a permit application before the effective date of the regulation, the Director may select the best approach to development and implementation of the next permit . These provisions are i ntended to avoid any unnecessary delay in recently submitted permit application s or draft permits. EPA expects that facilities will continue with any data collection requirements, study requirements, and schedules in recentl y issued permits. b. If the Director establishes a compliance schedule under § 1 25.9 4 , the Director will establish a schedule that sets requirements as soon as p racticable . In establishing the schedule, the Director is encouraged to consider the extent to which th ose technologies proposed to be implemented to meet the requirements of § 125.94(d) will be used, or could otherwise affect a facility ’s choice of technology , to meet the requirements of § 125.94(c ) . Impacts of thermal discharges, along with other s tressors, might be a relevant consideration when assessing benefits of technologies to reduce impacts of cooling water intakes or discharges . The Director is also encouraged to consider energy reliability , transmission capacity, and grid requirements when establishing a schedule for electric power generating facilities . The Director may confer with local and regional electric power agencies and state utility regulators when establishing a schedule for electric power generating facilities (see DCN 10 - 6 860 for information on the approach*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 298 of 567 taken b y California). The Director may determine that extenuating circumstances (e.g., length y scheduled outages, future production schedules) warrant establishing a different compliance date for any manufacturing fac ility . c. The Director will review the permit application materials and studies submitted under § 1 22.21(r) and determine which entrainment controls are appropriate . Factors that must be considered and factors that may be considered in making the determination are provided at § 125.98. The Director must issue a written explanation for the BTA determination and must make this determination, and any other information submitted by

third parties, available with the permit for public review. This determination is expected to be issued as part of the permit’s statement of basis under 40 CFR 124.7. 2. Role of Social Cost - Benefit Analy sis in Permit Determinations In deciding wh at technology to require a permittee to install to address entrainment, the Director may undertake an evaluation of social cost s and benefit s of implementing such requirements . This anal ys is will be based on the information submitted by

the applicant, supplemented by any information submitted by third parties, and additional information as determined appropriate by the Director. EPA recognizes the resource limitations faced by permitting authorities and does not generall y expect that the Director would develop additional information on which to base the evaluation of s ocial benefits and costs, although the Director may opt to do so. This analy sis should evaluate benefit s and costs from the perspective of society as a whole , rather than costs and benefits accruing to limited parties (e.g., very local populations or the permittee, which presents a limited set of information to the Director).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 299 of 567 It is also important to note that the stated preference survey conducted b y EPA which was discussed in the June 12, 2012 Notice of Data Availability ( 77 FR 34927 ) was designed to estimate respondents' willingness to pay for changes in the health of fish po pulations and aquatic ecosy stems and be statistically representative at large (regional and national) scales; the results were not designed to be statistically representative at the facility level for the assessment of benefits for individual site - level permitting decisions. Today ’s final rule does not require the Director to require a facility owner or operator to conduct or submit a stated preference survey to assess benefits. Further, the rule does not limit the Director’s discretion to consider non - water quality impacts in determining whether further entrainment measures are justified. A number of cost elements should be accounted for in assessing the social cost of entrainment technology

implementation. These are summarized below. a. Technology installation cost. These peer - reviewed engineering cost estimates of the phy sical construction of candidate entrainment technologies at the facility are required . These costs would be provided b y the applicant under § 1 22.21(r)(10). b . Installation downti me cost. Installation of closed - cycle coo ling s ys tems will often require facilities to take additional downtime beyond ordinary annual maintenance downtime. An estimate of downtime cost to the facility is required under § 1 22.21(r)(10) . EPA exp ects a facility will document that portion of downtime that is incremental to any downtime the facility already incurs due to, for example, routine maintenance outages, overhauls, refueling,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 300 of 567 and periodic replacement of equipment that is at the end of its u seful life. Downtime costs to the facility include the value of lost production (e.g., electricity) minus any variable cost savings, as well as any other costs to the facility associated with downtime (shutdown and startup routines, special maintenance protocols, etc. ) minus any savings associated with downtime. If they are considered in the social costs anal ys is, d owntime costs must be adjusted to reflect production made up by other facilities or firms , because these temper the real resource costs from society’s viewpoint. The cost of downtime is determined on a different basis for social cost. Specificall y, the cost of downtime to society is the cost incurred for other facilities and generating units to make up the electricity or manufactured goods that would have otherwise been generated by the facility minus the cost that would have otherwise been incurred by the facility

incurring downtime. This difference in cost reflects the additional cost, if any , that society must pay to generate the replacement goods , and may differ substantially

from the cost of downtime to the facility . c . Energy

penalty cost. Operation of closed - cycle cooling s ys tems may impose an energy penalty . EPA is using energy

penalty to mean only the opportunity costs associated with reduced power production due to derating (turbine backpressure). Energy penalty does not include the costs to operate pumps and fans associated with closed - cycle cooling, which are operation and maintenance costs (and covered below). Under well - established principles in benefit - cost analy sis, the cost of the energy penalty to the facility is not the opportunity cost to society . Instead, the cost to society is the cost of generating the electricity,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 301 of 567 whether incur

red b y the regulated facility or another facility , that is no longer available for consumption because of the energy penalty. This cost may be incurred by the facility , if it can increase the energy input to, and output from, the generating unit to generat e the electricity that is otherwise no longer available for consumption, or by another generating unit if the regulated unit cannot make up the electricity . In either case, the social cost of the energy

penalty is the cost of generating the electricity that would otherwise be available for consumption except for the energy penalty . Again, an assessment of these costs would be determined under the § 1 22.21(r)(10) demonstration . d . Operation and maintenance costs for the entrainment technology equipment . The cost of energy

to operate the entrainment technology for electric generators should appear in the operation and maintenance costs, along with other labor and materials costs . In the same way as described above, the social cost of the energy required to operate entrainment technology is the cost for generating this electricity, as it is otherwise no longer available for end - use consumption. This cost could be incurred b y the regulated facility , if it has sufficient capacity to make up the loss, or by another facility , if the regulated facility is not capable of g enerating the electricity that is no longer available for end - use consumption. e . Other administrative expenses . This includes additional permitting or reporting expenses , or both. For social cost s , the estimate should include the costs to the facility and those expected to be incurred b y the Director.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 302 of 567 EPA has estimated the Directors’ administrative costs in the I CR for the final rule , as explained in the EA , and facilities may adopt a similar approach to estimating th ese costs at the permit level. For assess ing social cost, the cost elements outlined above would ty picall y be accounted for on a real cost basis

—that is, pre - tax and without adjusting for future inflation . Costs are tallied over an appropriate time frame, which will ty picall y be the expected useful life of the technology installation or the remaining life of the facility , if less . Costs should be calculated as both net present value and annualized values, using an appropriate social discount rate. The appl icant should document the basis for the discount rate chosen , and its methodology and calculations . f . Benefits In assessing the benefits of entrainment technology installation, the Director would assess the value to society from the reductions in impingement mortality and entrainment that would result from installation of a closed - cycle cooling s ystem , fine mesh screens, or other entrainment technolog ies . All benefits, including monetized, quantified and qualitative benefits, should be considered in this assessment. The benefits assessment would ty

pically look at a range of potential benefit categories , including increased harvest for commercial fisheries, increased use value s for recreational fisheries , and nonuse values (existence and bequest values). The latter may be difficult to quantify or monetize. I f appropriate data are available from benefits transfer or conducting stated preference studies or other sources that can be applied to the site being evaluated, these should be us ed to monetize nonuse values. Otherwise, nonu se values should be evaluated quantitatively

and/or qualitatively . Quantitative analy sis, even without monetization, can*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 303 of 567 be quite useful in evaluating nonuse benefits. For example, quantifyi ng impacts to forage and threatened and endangered species, and other indirect impacts on the aquatic environment, might allow the Director to derive a much more complete understanding of benefits as compared to a qualitative narrative , even if not directl y comparable to monetary costs. Quantifying and valuing the benefit categories listed above involves significant challenges, as described in the BA. For example, assessing the productivity and value of commercial fisheries involves estimating the expected increases in commercial yield of economicall y valued species over time as a result of reduced impingement mortality and entrainment , and valuing thes e at market prices minus any incremental production costs associated with the incremental catch. Similarly , assess ing recreational use benefits involves estimating the improvements in recreational fishing opportunities resulting from reduced impingement mo rtality and entrainment , and assigning a value to these improvements . The value assignment is based on the estimated population profile

—in particular, number and proximity to affected water resources

—of recreational users, the availability

of alternative c ompeting water resources for recreational usage, and the resulting estimated change in demand for use and value of the affected water resources based on reduced impingement mortality and entrainment and increased recreational fishing performance . EPA ackno wledges this could be difficult to do even on a site specific basis. N onuse benefits , which encompass existence and bequest values , include impacts in such areas as population resilience and support, nutrient cycling, natural species*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 304 of 567 assemblages, an d ecos ys tem health and integrity . N onuse value s include improving the survival probability

of a threatened or endangered species if present in the vicinity of the facility . Benefits might also need to be assessed beyond the vicinity of the facility ’ s intake if migratory

species are affected b y the intake . Residual impact s of thermal discharges might also be appropriate to consider in the social benefits calculation. In much the same way

as described for the social cost assessment, social benefits are tallied ye arl y over the expected performance life of the compliance technology . T his tallying should account for the “phase - in ” of benefits (e.g., benefits may build up over time as the impingement mortality and entrainment reductions affect commercial fisheries productivity) . Benefits are computed on a present value basis and annualized using an appropriate discount rate as described above . The same discount rate should be used for benefits and costs. Often, it is appropriate to calculate benefits and costs using more than one discount rate. For example, for regulatory impact anal ys is, OMB recommends that F ederal agencies use both a 3 percent and a 7 percent rate. However, comparison s between specific benefit and cost numbers should alway s involve values computed using the same rate. The resulting estimates of social cost and benefits must be considered in determinations on whether to require a permittee to install entrainment technology and the specific level of entrainment technology to be installed . The Director may reject otherwise available technolog ies as the BTA requirements for entrainment controls if the social costs of compliance are not justifie d by the social benefits , or if there are other adverse impacts that cannot be mitigated that the Director deems to be unacceptable . If*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 305 of 567 all technologies considered have social costs not justified by the social benefits, or have unacceptable adverse impacts that cannot be mitigated, the Director may determine that no additional control requirements are necessary beyond what the facility

is already doing. The Director should document the basis for such a determination and include it in the public notice for the draft permit. 3 . Streamlined Process The process for compl yi ng with the impingement mortality standards is expected to be highl y streamlined. As shown in Exhibit VIII - 1, EPA expects more than 99 percent of facilities will comply

by one of the six compliance options that do not require continual biological compliance monitoring (one of the three compliance alternatives based on pre - approved technologies or one of the three streamlined compliance alternatives). If a facility chooses to comply b y operating a modified traveling screen, the Director will review the impingement technology performance optimization study , including the identification of species, duration an d structure of the study, and any monitoring requirements. 4. De Minimus Provision The Director may , based on a review of data submitted under § 122.21(r), conclude that the documented rate of impingement at the cooling water intake structures is so lo w that no additional controls are warranted . As described in section I.A.H, low flow facilities may

in particular be candidates for such consideration, although the authority of the Director is not limited to low flow facilities. The Director may want to consider facility

withdrawal rates in relation to the mean annual flow of the river and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 306 of 567 possible co - location with other CWI Ss when making a de minimis determination . Notice of this determination would be included in the draft permit made available for pub lic comment, and the Director’s response to any comment on this determination must be included in the record for the final permit. EPA considers low rates of impingement to be measured as an organism or age - one equivalent count, and not as the effect of impingement on fish populations. The Director may require data collection to demonstrate support for a de minimis level of impingement. In addition, E PA does not expect that a de minimis exemption would apply to facilities with no technology present other than trash racks , a technology that nearly all facilities employ . In making a determination that no additional controls are warranted, the Director may wish to consider factors such as whether the waters are subject to a TMDL for an aquatic life use , the waters are not attaining a designated use , and there would be more than minor detrimental effec ts on threatened or endangered species or critical habitat. The Director will still establish proper operation and maintenance conditions in the permit whenever making a de minimis finding that no additional controls are warranted. EPA notes that the de minimis provision for impingement does not necessaril y mean a facility ha s a de minimis level of entrainment. The life stages affected by impingement are different than those affected b y entrainment, and low counts of impingeable life stages do not alway s mean the counts of entrained organism are similarly low. Since the entrainment requirements are already determined b y the Director for each site, EPA concluded that specific regulatory

language for de minimis entrainment was unnecessary . 5. Low Capacity Utilization Units*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 307 of 567 The Director may

consider less stringent controls for intakes dedicated to low capacity utilization rate (CUR) power generating units . I f an existing facility has a cooling water intake structure used exclusively for on e or more existing electric generating units, each with an annual average capacity utilization rating of less than 8 percent averaged over a 24 - month block contiguous period , the owner or operator may request that the Direct or establish BTA standards for impingement mortality for that cooling water intake structure which are less stringent than (c)(1) to (c)(7). When determining the permit’s IM requirements associated with the low CUR unit , the Director may consider, after conferring with any appropriate state co - regulators ( such as public utility commissioners ) and with regional transmission organizations , independent sy stem operators or other planning authorities , the significance of the unit’s operation to the overall reliability

of electric power in the area . In addition, in determining the IM requirements associated with a low CUR uni t , the Director should consider any seasonal factors for affected species that might justify seasonal limits on the unit’s operation, for example any increased impacts resulting from the unit’s operation during spawning runs. Also, when considering the pr esence and potential effects to threatened and endangered species, the Director should consider whether the life stages present at the location are at risk of being impinged or entrained at the low CUR unit’s cooling water intake. In the event that the Director determines less stringent controls for intakes dedicated to low capacity utilization power generating units are appropriate, they should consider, at a minimum, the following in establishing controls:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 308 of 567 Strategies for minimizing water withdrawal during stand by periods of operation, startup/shutdown, and on - line periods of operation; The effectiveness of installing variable speed pump drives to reduce water withdrawals during all periods of operation, particularly during stand - by

periods of operation; and The effectiveness of installing alternative equipment (e.g. behavioral deterrents) to minimize impingement mortality . The owner or operator would demonstrate whether they have an intake only serving one or more low capacity utilization power generating units in permit application requirements at § 122.21(r)(3) and (8). Under § 122.21(r)(6), the owner or operator would indicate a request that the Director establish alternative BTA standards that are less stringent than § 125.94(c)(1) through (7). EPA recognizes the contribution of peaking units in serving peak electricity demands , and maintaining a reliable electricity grid. However, if peaking units are in standby mode for long periods relative to periods when they

are generating electricity, the result is a capacity utilization of the cooling water intake that is greater than the capacity utilization of the generator. Significant periods of standb y could contribute to a greater impact on aquatic life. While the 8 percent capacity

uti lization is an industry

standard that distinguishes those units making the greatest contribution to a smoothly function ing electricity grid, a Director may still determine that the impacts to aquatic life are significant enough to deny a request that BTA at that intake should be less stringent than (c)(1) to (c)(7). EPA anticipates the Director will have the information necessary to determine BTA in such circumstances*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 309 of 567 based on the permit application requirements , including but not limited to an identification of the number of day s the cooling water s ys tem is in operation , flow on those day s, and seasonal changes in the operation of the sy stem under § 122.21(r)(5) and the biological information under § 122.21(r)(4). As discussed previousl y, the Director w ill determine the BTA for entrainment for low CUR units on a site - specific basis. EPA expects that many of the same factors discussed above

– including the significance of the unit’s operation to the overall reliability of electric power in the area, the diversity of fuels available for the unit, and the impact of the costs of any potential entrainment requirements on the unit’s cooling water intake structure on overall reliability of electric power in the area

– will be relevant in making site - specific BTA entrainment determinations for low CUR units. The Director may

consider the factors at § 125.98(f)(3) when making these determinations for low CUR units, which includes grid reliability , among other factors. 6. Monitoring The Director will re view any impingement mortality

and entrainment monitoring reports submitted by

the facility

to ensure ongoing compliance. EPA is shifting toward an electronic discharge monitoring report sy stem, and many of the impingement mortality and entrainment standards can be incorporated into the discharge monitoring report itself, rather than requiring a separate report . Except for facilities choosing alternatives § 125.94(c)(7 ), detailed biological data collection would only be included as part of the facility ’s permit application submission and not for compliance purposes . The Director has the discretion to request additional information, including inspection of the facility, at*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 310 of 567 § 125.95 (d) ( i.e. , permit application and supporting information requirements) and § 125.96 (c) ( i.e. , additional monitoring requirements). 7. Nuclear Units The rule includes a provision that permits the owner of a nuclear facility to demonstrate to the Director that compliance with the rule woul d result in a conflict with safety requirements for their facility . See § 125.94(f). EPA anticipates that this provision w ould be implemented as follows. Initiall y, the Director will draft a permit and will share the draft permit with the owner or operator of the nuclear facility . Upon reviewing the draft permit, the owner or operator will determine whether in their view a conflict with a safety requirement established by the Nuclear Regulatory Commission , the Department of Energy or the Naval Nuclear Propulsion Program exists. I f a conflict exists, the owner or operator should communicate the conflict to the NRC , Department or Program and the Director. In all cases, whether a conflict exists or not, the Director should notify

the NRC , Department or Program and the owner or operator of the facility that he or she wishes to informally con fer regarding the permit. Such inter actions should be scheduled , conducted and documented. Where a conflict is identified, the Director would make a site - specific BTA determination. **F. What are Example Permit Conditions and Compliance Monitoring for**  **Impingement Mortality?** As previously

disc ussed, the owner or operator must comply with BTA standards as soon as practica

b l e on a schedule of requirements established by the Director. EPA did not specify

dates b y which the BTA standards for impingement mortality must be met*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 311 of 567 because the specific method of compliance with the BTA standards for impingement mortality is tied to the determination of BTA requirements for entrainment. Further discussion of this alignment of compliance deadlines is provided in Section A . Today ’s final rule provides for several methods of compliance with the BTA for impingement mortality . This section discusses each of the methods for compliance, how they follow from the permit application requirements at § 122.21 (r), and any minimum monitoring and reporting requirements associated with each method. 1. Closed - cycle recirculating s ys tem In this method of compliance, an existing facility must operate a closed - cycle recirculating s ys tem as defined at § 125.92 (c) . The facility would indicate the choice to use this compliance method under § 122.21(r)(6) in its permit application. As specified in § 122.21(r)(1), the facility would need to submit (r)( 9) through (13 ) , if it exceeds 125 mgd AIF and these requirements are not waived by the Director. The information still required at (r)(2) to ( 8) is considerabl y less burdensome. The monitoring must be representative of normal operating conditions, and must include measuring cooling water withdrawals, make - up water, and blowdown flows. The facility must monitor actual intake flows at a minimum frequency of dail y, or may monitor the representative cycles of concentration at a minimum frequency of daily . These monitoring data would be used by the Director to determine that make - up and blowdown flows have been minimized. The owner or operator would submit these data with their existing DMR or equivalent state report. Facilities complying using closed - cycle cooling are not subject to biological compliance monitoring unless otherwise specified by the Director (see § 1 25.96( c ) ) .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 312 of 567 2. 0.5 Feet per Second Through - S creen D esign V elocity In this method of compliance, the facility must operate a cooling water intake structure that has a maximum design through - screen intake velocity of 0.5 feet per second . The facility

must submit information under § 122.21(r) to the Director that demonstrates that the maximum design intake velocity as water passes through the structural components of a screen measured perpendicular to the screen mesh could not exceed 0.5 fee t per second. The maximum velocity must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using hydrological data) and during periods of maximum head loss across the screens or other devices during normal operation of the intak e structure. EPA notes a cylindrical wedgewire screen, in general, is designed for 0.5 feet per second. In Phase II, EPA pre - approved wedgewire screens under specific operational conditions. Today ’s final rule simplifies the demonstration requirements for a facility employing cylindrical wedgewire screens to that of demonstrating the maximum design through - screen velocity i s 0.5 feet per second. As another example, a facility may have pumping and piping constrictions that phy sicall y limit the design intake velocity to less than 0.5 feet per second. The Director may choose to establish permit conditions that address the ph ys ical limitations of the intake, such as requiring a pump be removed from service, or that only

one of two (redundant) pumps may operate at any time. Facilities choosing to compl y under this section do not have monitoring requirements under this section.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 313 of 567 3. 0.5 F eet per S econd Through - screen Actual Velocity This method of compliance is similar to the des ign velocity alternative discussed above, except that the intake’s maximum design velocity can exceed 0.5 fps, as long as the intake is operated such that the actual, measured velocity does not. As an example, a facility may have orig inally

been constructed with a maximum design intake of 1.0 feet per second, but now , because it has retired generating capacity but not pumps , may onl y withdraw cooling water such that the actual intake velocity at the intake never exceeds 0.5 feet per se cond. This would constitute compliance with the impingement mortality standard. The maximum velocity must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using hydrological data) and during p eriods of maximum head loss across the screens or other devices during normal operation of the intake structure. Monitoring the velocity at the screen face or immediately adjacent to the screen face must be conducted at a minimum frequency of daily . Monitoring of the approach velocity does not meet this requirement. However, in lieu of velocity monitoring at the scre en face, the owner or operator may calculate the through - screen velocity using intake water flow, water depth, and the screen open area . EPA is requiring this point of measurement to ensure that fish are actuall y able to swim away (not into an embay ment from which they

cannot escape) from the location within the intake structure at which they are most susceptible to being impinged. Under today ’s final rule, the Director may authorize the facility

to exceed the low velocity compliance alternative for brief periods for the purpose of maintaining the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 314 of 567 cooling water intake s ys tem, such as backwashing the screen face. In this compliance option , fa cilities are not subject to biological compliance monitoring unless otherwise specified by

the D irector (see § 1 25.96( c ) ) . 4. Existing Offshore Velocity Cap In this method of compliance, facilities will submit information under § 122.21(r) that they operate an offshore velocity cap that meets the definition at § 125.92 (v) and that was installed prio r to the effective date of this rule. The definition of offshore velocity cap includes the requirement that the velocity cap be located a minimum of 800 feet offshore. The velocity cap must include devices to exclude marine animals, such as bar screens. The velocity cap must be designed to change the direction of water withdraw from vertical to horizontal, thereb y creating velocity patterns that can be sensed and trigger an avoidance response by fish and other aquatic organisms. Intake flow must be mon itored at a minimum frequency of dail y. This information will confirm the intended velocity patterns are created. Inthis c ompliance option , fa cilities are not subject to biological compliance monitoring unless otherwise specified by the Director ( see § 1 25.96( c ) ) . EPA notes that facilities choosing to construct a velocity cap at an offshore location after the effective date of this rule would use compliance options § 125.94 (c)(6) (Sy stems of Technologies as the S ite - specific BTA for Impingement Mortality) or § 125.94 (c)(7) (Impingement M ortality P erformance Standard).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 315 of 567 5. Modified Traveling Screens In this method of compliance, a facility must first operate a modified traveling screen that meets the definitio n at § 125.92 (s) . The definition identifies and requires those features of a traveling water screen that provide for an appropriate level of fish protection: collection buckets (or equivalent) to minimize turbulence to aquatic life; guard rails or barrier s to prevent loss of fish from the collection sy stem; screen panel materials such as smooth woven mesh, drilled mesh, molded mesh, or similar materials to protect fish from descaling; continuous or near- continuous rotation of screens and operation of colle ction equipment to recover impinged fish as soon as practical; low pressure wash or vacuum to remove collected organisms from the screens; fish handling and return with sufficient water flow to return fish directly to the source water in a manner that does not promote predation or the re - impingement of the fish, or a large vertical drop. EPA intends for this definition to generall y include modified Ristroph screens (including Geiger screens, Beaudrey WIP screens, and Hydrolox screens) , dual flow screens, and rotary

screens. Modified traveling screens with a fish return and handling s ys tem is the technology

basis for the impingement mortality standard, therefore the EPA fully expects biological monitoring of a properl y designed, built, and operated modified traveling screen would consistently be able to meet the impingement mortality performance standard. If EPA were to simply set a performance standard based on the numeric performance levels achievable b y modified traveling screens, a facility wou ld have to conduct continual biological monitoring to demonstrate compliance. A far more efficient*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 316 of 567 way to demonstrate compliance would be for facilities to optimize the operation of their technologies for their site - specific conditions and identify the con ditions that distinguish proper operation at their facility . The optimized operation of the technology would be largel y demonstrated through the biological data collection and studies required in the permit application at § 122.21(r)(4) and (6)(i ), including an impingement technology performance optimization study . Biological data collection should follow the sampling protocols described in section 7 below. The optimized operation documented b y the impingement technology performance optimization study will result in more than just meeting the impingement mortality standard, and results in a facility achieving the best possible performance. 102 The biological data collection and anal y sis in the impingement technology performance optimization study will identify the operating conditions that result in optimized performance, such as fish sluicing spray pressures, rotation speed and frequency of the screens, angle of the fish sluicing spray s, fish return trough water flows, and fish return trough location. 103 The Director will then establish these operating conditions as permit conditions, along with an equipment inspection condition to assure proper functioning of the technology . As long as the permit conditions are met, the EPA does not expect any

102 As demonstrated by the numerous studies included in the record for today’s final rule, many facilities are able to achieve less than 10 percent impingement mortality, a performance level comparable to the im pingement morta lity of closed - cycle cooling. Merely requiring facilities to achieve a numerical performance standard through modified traveling screens creates disincentives to perform better. 103 EPA also requires the entrapment of organisms , as well as organisms that are carried over the screens, to be counted as im

pingement mortality.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 317 of 567 biological compliance monitoring will be required, unless otherwise specified by the Director , for example, for the protection of shellfish or fragile species (see § 1 25.96( c ) ) . Note that EPA does not intend for facilities to install closed - cycle cooling solely for the purpose of meeting the IM requirements. 6. Sy stems of Technologies as the BTA for Impingement Mortality In this method of compliance, a facility must demonstrate a s ys t em of technologies is employed that will meet the impingement mortality standard. This option will allow a facility

the flexibility

to choose the s ystems approach of technologies, management practices, and operational measures it will use to demonstrate co mpliance, including but not limited to flow reductions, intake location, behavioral deterrents, unit closures, seasonal operations, and newl y installed velocity caps. Like the compliance option for modified traveling screens, the optimized operation of the sy stem of technologies will be largely demonstrated through the biological data collection and studies required in the permit application at § 122.21(r)(4) and (6)(ii). However, the anal ys is and studies for combining the performance of varied te chnologies is more involved. If the s ys tem of technologies includes credit for reductions in the rate of impingement b y the s ys tem, the impingement technology performance optimization study required at § 122.21(r)(6)(ii) will provide an estimate of those reductions including relevant supporting documentation. The estimated reductions in rate of impingement must be based on a comparison of the facility ’s sy stem to a once - through cooling system with a traveling screen whose point of withdrawal from the surface water source is*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 318 of 567 located at the shoreline of the source waterbody . EPA expects Phase II facilities will use information already collected as part of their calculation baseline (69 FR 41594 , July 9, 2004 ). In addition, the study must include two years of biological data collection demonstrating the rate of impingement resulting from the sy stem. For this demonstration, data collection must be conducted no le ss frequently than monthly . The Director may establish more frequent data collection or a longer period of study . If the s ys tem of technologies includes credit for reductions in impingement mortality already obtained at the facility, the study must include two years of monthly biological data collection demonstrating the level of impingement mortality the optimized sy stem achiev es. Biological data collection must be representative of the impingement and the impingement mortali ty at the intakes and should follow the sampling protocols described in s ection 7 below. The impingement technology performance optimization study must provide a description of any sampling approach used in measuring impingement mor

tality , including a taxonomic identification to the lowest taxon possible of all organisms to be sampled ; the method in which naturall y moribund organisms are identified and taken into account ; and the method in which mortality due to holding times is taken into account . In addition, the study must describe how the location of the cooling water intake structure in the waterbody and the water column are accounted for in the sampling locations . EPA requires the entra pment of organisms , as well as organisms that are carried over the screen, to be counted as impingement mortality . If the s ys tem of technologies specificall y includes flow reduction to reduce impingement, the impingement technology performance optimizatio n study must include*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 319 of 567 two years of intake flows, measured daily , as part of the demonstration, and must describe the extent to which flow reductions are seasonal or intermittent. The rule clarifies that credit for flow reductions must result from actual red uctions in flow, therefore the AIF will be used as a point of comparison, and not the DIF. The study must document how the flow reduction results in reduced impingement, and how the reduction in impingement has reduced the site - specific impingement mortali ty . Today ’s final rule at § 125.98(f) (3)(iii) further clarifies that credit in reduced impingement or impingement mortality resulting from unit closures will be valid for a period of 10 ye ars . 104 This is also reflected in permit application requirements for an owner or operator planning to retire the facility

in the current permit term at 40 CFR 122.21 (r)(1)(ii )(F), or in the following permit cycle at 40 CFR 122.21 (r)(1)(ii)(G). The Director must determine the sy stem of technologies, management practices , and operational measures that is the best technology available for impingement reduction at the site. As the basis for the Director’s determination, the facility must demonstrate that the sy stem of technology has been optimized to minimize impingement mortality of all non - fragile species . In addition to the impingement technology performance optimization study , the Director may also use the biological source water characterization and/or the entrainment characterization studies in the permit application . EPA expects the

104 Because a permit may be administratively continued or may not be issued every 5 years, EPA has specified 10 years rather than two permit cycles to avoid facilities from taking credit for a unit closure that potentially occurred decades prior.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 320 of 567 Director’s decision will be informed b y comparing the impingement mortality data under § 122.21(r)(6)(ii) to the impingement mortality performance standard that would otherwise appl y under § 125.94(c) (7). In addition, the impingement technology performance optimization study requires documentation of the percent impingement mortality reflecting optimized operation of the total sy stem of technologies, operational measures, and best management practices and all supporting calculations. The following example illustrates how these provisions w ill adjust for flow, location, and other technologies in demonstrating the IM performance for a s ys tem of technologies. The example uses values that simplify the calculations to better illustrate the adjustments, and are not intended to reflect values that EPA expects at any facility . To simplify the example further, the facility has onl y fish and does not have shellfish in its source waters. EPA has chosen a h ypothetical facility that examined each ch ange in a separate study . 105 The h ypothetical facility intake is located at a submerged offshore location, has an acoustical deterrent , and installed variable speed drives. For the purposes of this example, the facility has completed sampling at the forebay for two years as part of § 122.21(r)(4) and (6). During the most recent 12 months, the counts of non - f ragile species totals 4 0 ,000 impinged fish. During the 24 - hour holding period following each

105 EPA recognizes that facilities often examine the combined effect of two or more technologies (e.g., deterrents and offshore location) within a single study. In applying these provisions, the fa cility could use the outcomes associated with the combined performance of multiple technologies, but this would result in permit conditions that would also be combined.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 321 of 567 monthly sample collection, the total fish that died were counted , for a total of 12 ,000 dead fish for the preceding 12 months . The facility then calculated the average IM for the preceding 12 months at 30 percent as follows:

% IM = (impinged fish that are killed) x 100 (total number of impinged fish) = (12,000) / (40,000) x100 = 30 % To adjust the observed percent IMfor a submerged offshore location and acoustical deterrent , the facility first extracts information from its previously conducted studies related to performance and calculation basel ine. Alternativel y, the facility could conduct a performance study during the same two year period in which it conducts its biological data collection as part of the permit application requirements at § 122.21(r). For the submerged offshore location adjustment, fish density and flow data show the offshore location reduces the rate of impingement for all species by 4,000 fish annually . For the acoustical deterrent , performance data show a reduction in the rate of impingement of fi sh by

11,000 organ isms annually . For purposes of this example, assume none of the 15,000 fish are assumed to contribute to further mortality; in other words, all of the fish that avoided impingement in the first place survive. Therefore, the facility has reduced impingement by 15,000 fish ( i.e. , sum of both submerged offshore location and acoustical deterrent). The facility then takes credit for this reduction by adding the forgone impingement to the denominator of the percent IM calculations as follows:

% IM = (impinged fi sh that are killed) x 100 (total number of impinged fish)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 322 of 567 = (12,000) / (40,000+15,000) x100 = 22 % In summary , calculating percent IMat the forebay yields a 30 percent IM, and then applying the performance for existing technologies shows the effec tive percent IM is actuall y 22 percent. Next, to adjust for the variable speed drives, the facility has determined from flow monitoring that the volume of cooling water flow has been reduced by 11 percent. In this example, assume the flow reduction does not vary considerabl y each month. The volume of reduced flow multiplied by the density

of fish near the intake is calculated each month for 12 months , and the facility projects that the re duced flow excludes an additional 8,000 f ish from impingement each ye ar . Then the facility would apply the reduction in annual counts of impinged fish to the denominator, as follows: % IM = (impinged fish that are killed) x 100 (total number of impinged fish) = (12,000) / (40,000+15,000+ 8,000) x100 = 19% Thus , the facility ’s site - specific s ys tem of technologies including optimized operation of acoustical deterrents has a total s ys tem performance of 19 percent annual impingement mortality . This example is intended to illustrate how faci lities would obtain credit for existing technologies in a s ys tems approach . While this example includes acoustical deterrents, it does not imply that acoustical deterrents are an appropriate technology

for all facilities. EPA expects a facility will use th e required two ye ars’ worth of monthly

biological data collection and studies to conduct a similar analysis for each month. The minimum required data collection and studies will result in annual average*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 323 of 567 performance calculations for 12 consecutive months. The facility will use this information as part of its demonstration to the Director. If the Director determines the sy stem of technologies, management practices, and operational measures is the best technology available for impingem ent reduction at the site, the Director will establish specific operating conditions as permit conditions, along with appropriate equipment inspection conditions to assure proper functioning of each technology . For example, a sy stem with acoustical deterrents would likely have permit conditions related to frequency of tones, volume, location, and frequency of operation of the acoustical deterrents. The Director will also establish monitoring requirements for intake flow and velocity

where such measures are an important part of the system of technologies, such as the case of variable speed drives. For example, a sy stem that includes seasonal flow reductions would likely have permit conditions for flow monitoring. As long as the permit conditions are met, the EPA does not expect any biological compliance monitoring will be required, unless otherwise specified by the Director (see § 1 25.96( c ) ) . 7. Impingement Mortality Performance Standard In this method of compliance, facilities are required to monitor to demonstrate compliance with the impingement mortality performance standard at § 1 25.94( c)(7) b y demonstrating a 12 - month average mor t ality of 24 percent or less . The facility is required to monitor at a minimum frequency of monthly , unless a greater frequency is specified b y the Director . For each monitoring event, the facility would determine the number of non fragile organisms that are collected or retained on sieve with a maximum spacing of 0.56*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 324 of 567 inche s ( i.e ., that are impinged [I ]), and the number that die after impingement ( i.e. , impingement mortality

[IM]). The facility

must establish a post - impingement holding period of 18 to 96 hours otherwise specified b y the Director. Under the definition at § 1 25.92 (b) , all life stages of fish and shellfish ex cludes specified nuisance species from the totals for both impingement and impingement mortality . Also , as defined at § 1 25.92( q) , latent mortality means the delayed mortality of organisms that were initially alive upon being impinged or entrained but that do not survive the delayed effects of impingement and entrainment during an extended holding period. Delayed effects of impingement and entrainment may

be due to stresses that include but are not limited to temperature change, phy sical stresses, and chemical stresses. The manner in which latent mortality is counted must be identified in the Entrainment Characterization Study at § 122.21(r)(9) , and must also be counted in the Impingement mortality performance standard at § 125.94(c)(7) . Fish that are included in any carryover from a traveling screen or removed from a screen as part of debris removal must be counted as impingement mortality . Fis h that are entrapped b y the cooling water intake s ys tem must be counted as impingement mortality . The 12 - month average of impingement mortality is calculated as the sum of total impingement mortality

over 12 months divided by the sum of the total imp ingement over the same 12 months, as shown by the following equation: % = × 100 Note that this equation would be applicable to calculating the annual average for the previous 12 months. Although facilities will be conducting biological m onitoring*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 325 of 567 monthly (or more frequently) and reporting that data in their discharge monitoring reports, facilities are not required to meet a monthly impingement mortality performance standard . Therefore, in this equation, IM is the sum of all impingem ent mortality over the course of the previous 12 months, and I is the sum of all impinged fish for the previous 12 months. If the facility’s calculated annual average percentage impingement mortality is less than the 12 - month average perfor mance standard , it will be deemed to be in compliance with the 12 - month average performance standard . In establishing the monitoring requirements, EPA expects any approved monitoring protocols w ill consider the entire dail y and (where appropriate) tidal cycles over which data collection should occur. Ty picall y, facilities have collected impingement samples continuously

for 6 or 8 hours and repeated this cycle to cover an entire 24 - hour period. Stratifying collection in this manner allow s an anal ys is of the diel variation exhibited by

many aquatic organisms , which may be important . EPA also expects the approved monitoring protocols w ill ensure that sampling occurs during periods of representative intake flow and not during periods of non - peak flow or scheduled outages. The ideal point to measure impingement mortality is the location where organisms are returned to the waterbody . However, for ease of sampling and access, EPA envisions that most facilities w ill collect samples fro m the fish return s ys tem(s) at some point before the fish return discharge point . According to the studies in EPA’s database, EPA envisions that facilities w ill either (1) divert some or all of the flow from the fish return into a fish collection and holding area, or (2) place a net or basket fitted with 3/8 - inch mesh spacing in the fish return and collect and transfer the retained organisms to a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 326 of 567 holding tank. While nearly all studies in the record report the use of 3/8 - inch mesh spacing, as discussed below , the final rule allows the use of other sieve and mesh spacings with a 0.56 inch maximum opening. A f acility w ill handle the organisms in the collection device as little as possible and transfer them to a holding area with conditions as close as practicab le to the source water. The facility w ill count the number of organisms in the holding area and subsequently hold the sample using proper technique 106 to maintain the health of the collected organisms. 107 At a period of 18 to 96 hours after the initial collection, the facility w ill count the number of dead organisms and determine the percentage of organisms that died in comparison to the total number of organisms measured initially . Any

organisms not collected by the fish handling and return sy stem, such as entrapped organisms, organisms in the carryover of a traveling screen , or organisms collected b y a high - pressure wash and sent to debris bins, w ill be counted as 100 percent impingement mortality . The facility w ill keep records of this information and compare its result to the impingement mortality performance standard at § 125.94(c)(7). As explained in Section VI, the impingement mortality restrictions in the final rule are based on the operation of a modified traveling screen with a fish return. Because EPA wants to ensure that a facility’s monitoring plan is consistent with the technical

106 EPA recognizes that at present, there are no standard methods for conducting impingem ent and entrainment studies and that there can be variability in designing a sampling plan between sites. However, some elements should be incorporated into any sampling plan, as outlined in DCN 10 - 6708. 107 Facilities that divert the flow directly would similarly pass the flow through a net or debris basket fitted with 3/8 - inch mesh spacing or would count only organisms that would have been collected with such a basket or net.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 327 of 567 basis for today ’s requirements, EPA is requiring facilities to monitor impingement mortality using a sample that has been passe d through a sieve or net with no more than 0.56 inches maximum opening , so that onl y organisms that do not pass through this mesh size are counted. 108 Indoing so, facilities would retain (and therefore count) only organisms that would have been impinged on a 3/8” mesh screen, which was the technological basis used for developing the impingement mortality performance standard . 109 Facilities could similarly appl y a “h ypothetical net” in that they could elect to count only

organisms that would not have passe d through a net with mesh openings less than 0.56 inches . For example, a facility that uses a fine - mesh screen of 0.5 mm or diverts the flow directl y to a sampling bay will need to count only organisms that remain if the flow passed through a net, screen, or debris basket fitted with 3/8 - inch mesh spacing. EPA further expects the impingement mortality restrictions could be applied to other fish protection technologies and provides a compliance route for future technologies that are better performing.

108 For a discussion of how EPA has changed its view of screen mesh size, see Section III of the proposed rule (76 FR 22188, April 20, 2011) . EPA recognizes that smaller organisms that previously would have passed through a screen and been entrained might be “converted” by a fine mesh screen to an impinged organism; because organis ms size would affect the rate of mortality, EPA has chosen not to rely on definitions of impingement and entrainment based on a physical process, but instead to define impingement mo rtality and entrainment mortality based on organisms sizes. 109 EPA’s analys is of impingement survival rates is based on data from facilities with 3/8” mesh screens; the performance standard may be applied differently at facilities with smaller mesh size. Therefore, these standards do not provide a disincentive t o facilities from using finer - me shed screens (i.e., screens with a mesh opening smaller than 3/8 inch) on their traveling screens. As long as the organisms that are large enough to have been impinged on a coarse mesh screen achieve the required survival rates, the facility will be considered to meet the impingement mortality requirements.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 3 28 of 567 In tod ay ’s rule, EPA is including provisions for reduced biological monitoring. EPA determined that monthly monitoring at a minimum is appropriate for at least the first full permit term. In permit terms subsequent to the first permit issued under today ’s rule , the owner or operator may request the Director to reduce monitoring requirements under § 125.95(c). EPA expects the Director would reduce monitoring requirements as appropriate , if the facility demonstrates that its operational and biological conditions h ave remained the same . Given that the source waterbody may change over time (including hosting different or increased numbers of individuals or species), the biological characterization required at § 122.21(r)(4) including two ye ars of data serves to alert interested parties as to the status of the waterbody and any changes in the biology of the waterbody . Under the compliance option (7) impingement mortality performance standard, EPA expec ts that as new technologies are successfully demonstrated, in subsequent permits facilities would request less frequent monitoring, or be able to incorporate such technologies in a permit application choosing a § 125.94(c)(6), s ys tem of technologies, demon stration. Once the Director has determined the technology is fully demonstrated for that site , the facility would therefore reduce their biological data collection to the minimum required b y the permit application at § 122.21(r) and any monitorin g the Director determines to be appropriate for verifying permit operating conditions. 8. Additional Measures Sections § 125.94(c)( 8 ) and (9) provide the Director discretion to require additional measures to protect shellfish and fragile species. An example of shellfish*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 329 of 567 protection measure s is a barrier net, including seasonal deploy ment of such nets. An example of additional protection measures for fragile species is an acoustical deterrent sy stem . 9 . Summary The following E xhibit VI II - 4 summarizes the monitoring requirements for impingement mortality

by compliance approach alternative . The Director has the discretion to require additional monitoring under § 125.96(c) and (d). Since all permits must have requirements for visual inspections, these are not included in the exhibit. **Exhibit VIII -**  **4. Summary of monitoring requirements for impingement mortality Compliance approach**  **Type of monitoring Frequency**  Closed - cycle recirculating system Intake, makeup and blowdown flows (or cycles of concentration) Daily Velocity (DIF) None None Velocity (AIF) Velocity (measured or calculated from flow) Daily Velocity cap Intake flow Daily Modified traveling screens TBD a TBD a Systems of Technologies TBD b TBD b Impingement mortality performance standard Biological monitoring Monthly a Monitoring requirements may vary, depending on the permit - specific operating conditions. b The monitoring requirements are based on the technologies employed. For example, seasonal flow reduction would require flow monitoring.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 330 of 567 **G. What Monitori**  **ng is Required for Entrainment?** Where the Director establishes entrainment controls , the Director is required to establish monitoring requirements. The final rule requires that the permit application studies at § 1 22.21(r) be submitted for each permit renewal. For facilities that withdraw 125 mgd AIF, EPA expects that the Director w ill us e these studies, including the Source Water Baseline Biological Characterization Data at § 1 22.21(r)( 4) and the Entrainment Characterization Study

at § 1 22.21(r)(9), as a basis for any monitoring requirements for entrainment . To facilitate the determinatio n of entrainment requirements for facilities below 125 mgd AIF, a Director may require the owner or operator to submit some or all of the study

requirements at § 122.21(r)(9) through (13) or variations thereof . The Director may

require additional monitorin g necessary to demonstrate compliance with § 1 25.94(d) , additional measures to protect Federally- listed endangered and threatened species and designated critical habitat requirements under § 125.94(g), interim standards under § 1 25.94 (h), and any more stringent standards under § 1 25.94( i ). Under § 1 25.96( d), existing facilities with new units are required to conduct compliance monitoring to demonstrate flow reductions consistent with the requirements of § 1 25.94( e ) (1) , or equivalent impin gement and entrainment reductions. The Director may establish flow monitoring or monitoring of cycles of concentration as discussed in Section F. Such measures w ill be used to document that the facility has minimi zed make up and blowdown flows.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 331 of 567 For fa cilities complying under § 125.94(e)( 2 ), the frequency of monitoring will be determined b y the Director and wi ll vary depending on the facility ’s chosen method of compliance. To meet requirements under § 1 25.94( e )( 2 ), facilities must measure AIF to establish a site - specific baseline without any new technologies or emplo yi ng additional operational measures. The facility must also measure the density of entrainable organisms (E D ) at a proximity

to the intake that is representative of the entrainable organisms present without the cooling water intake structure. Samples w ill be collected o ver a 24 - hour period to monitor each species as required b y the Director. Samples w ill be collected no less than biweekl y during the primary period of reproduction, larval recruitment, and peak abundance identified during the Source Water Baseline Biological Characterization Data required under § 1 22.21(r)(4). Samples w ill be representative of the cooling water intake when the structure is in operation. In addition, sufficient samples must be collected to allow for calculation of 12 - month average entrainment levels. The sampling w ill measure the total count of entrainable organisms or density of organisms, unless the Director approves of a different metric for such measurements. If the abundance varies seasonally , the Director may require several measurements of entrainment through the year, from which a 12 - month average can be calculated. For the purpose of today ’s rule, entrainable is defined as any organism that passes through a sieve with a maximum open ing of 0.56 inches. As discussed in Section VI , this would avoid any confusion as to which organisms are subject to which standards (i.e. , requirements for IM or requirements for E) . The regulation specifies that the sieve used*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 332 of 567 for calculating impingement must be the same sieve used for calculating entrainment, so all organisms are ac counted for . Facilities can also monitor the latent entrainment mortality in front of the intake structure. Entrainable organisms passing through the cooling water intake structure are to be counted as 100 percent entrainment mortality unless the facility

demonstrates to the approval of the Director that the mortality for each species is less than 100 percent. In addition, facilities must monitor the AIF for e ach intake. The AIF must be measured at the same time as the samples of entrainable organisms are collected. The following equation illustrates how to calculate a baseline level of entrainment ( E B ): E B = E D × AIF Performance commensurate with a closed - cycle recirculating system ( E CCRS ) can therefore be determined by reducing E

B by the percentage of flow reduced through the use of a closed - cycle cooling s ys tem. For example, a facility withdrawing make - up water from a freshwater source (as described above, would achieve a reduction of 97.5 percent) w ill calculate its performance as follows: E CCRS = ( E B ) × (100

– 97.5) ÷ 100 The resulting value, E CCRS , is the required level of entrainment performance (as measured b y entrainment mortality). The facility could implement any

combination of flow reduction, technologies, and operational measures to meet the required level of entrainment performance. For example, a facility withdraws 200 mgd AIF from a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 333 of 567 fres hwater river. The annual average entrainment density in the proximity

of the intake structure is 6,400 organisms per 100 cubic meters withdrawn. E B = E D × AIF 6,400 organisms/100m 3 × (100m 3 / 26,417 gallons) × 200,000,000 gallons per day = 48 × 10 6 organisms per day The maximum entrainment mortality for a closed - cycle cooling s ys tem is thus E CCRS = ( E B ) × (100

– 97.5) ÷ 100 = (48 × 10 6 organisms per day) × (100

– 97.5) ÷ 100 = 1.2 × 10 6 organisms per day . The minimum required level of performanc e for demonstrating entrainment mortality at a comparable level (

E C) to a closed - cycle cooling sy stem is the level corresponding to 90 percent 110 of the reduction that a facility with a closed - cycle cooling sy stem could achieve: E C = ( E B ) × (100

– (97.5 × .9 )) ÷ 100 = (48 × 10 6 organisms per day) × (100

– (97.5 x .9)) ÷ 100 = 5. 88 × 10 6 organisms per day .

110 The 90 percent metric is required in Phase I, and adopted here because new units are subject to requirements similar to the Phase I requirements. Phase I, at 40 CFR 125. 86 specifies, “reduced both im pingement mortality and entrainment of all life stages of fish and shellfish to 90 percent or greater of the reduction that would be achieved through § 125.84(b)(1) and (2).”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 334 of 567 The Director may

require additional monitoring necessary to demonstrate compliance with § 1 25.94(d) , endangered species requirements under § 125.94(g), interim standards under § 1 25.94 (h), and any more stringent standards under § 125.94( i ). In addition, all facilities will either conduct visual inspections or employ remote monitoring devices when the cooling water intake structure is in operation. The facility will conduct such inspections at least weekl y to ensure that any technologies installed to comply with § 1 25.94 are maintained and operated to ensure that they will continue to function as designed. EPA is aware that for some facilities, this requirement could pose a feasibility challenge ( for example due to ice cover in the winter season, inability of divers to see through more than a few inches of water, or certain intakes in deep water). The rule, therefore, authorizes the Director to establish alternative procedures . See § 125.96(e). **H .**  **What Reports Am**  **I Required To Submit?**  1. Status Reports If the Director establishes a compliance schedule, the Director will also establish any status reporting requirements. These reports may include updates on biological monitoring, technology

testing results, construction schedul es, or other appropriate topics and serve as milestones for the facility and the Director to evaluate the progress of the facility in meeting BTA . See §§ 125.94(b) and (d) and 125.9 7(b). 2. Monitoring Reports The required reports for monitoring activities are similar to requirements that are already in NPDES permits for effluent discharges. EPA expects such reports to be*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 335 of 567 included with the Discharge Monitoring Reports (DMRs) or equivalent state reports. Facilities would report any monitoring, demonstration, and other information required by the permit sufficient to determine compliance with th e permit requirements established under § 125.94, as well as any other monitoring requirements specified in the permit . See 40 CFR 125. 9 7 (a). Entrainment requirements will be determined on a site - specific basis by the Director . For facilities that are require d to install entrainment controls, EPA expects that these facilities would generall y conduct ongoing flow (or other) monitoring as verification that entrainment has been reduced. See § 125.96(b ) and (c ). However, the Director may

require f acilities to report entrainment monitoring and anal ys is , including :  The compliance measurement location.

 A description of the flow monitoring procedure.

 Documentation of flow reductions.

 Any other monitoring requirements specified in the permit . The report must inc lude any monitoring and analy sis required as part of additional measures for threatened and endangered species, shellfish, or fragile species as established by

the Director. Further, your report will include documentation of cooling water that is proce ss water, gray water, waste water, reclaimed water, or other water reused as cooling water in lieu of water obtained by an intake. The Director will evaluate these reports for compliance with permit requirements as appropriate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 336 of 567 3. Annual Certifications Tod ay ’s rule requires a facility to submit an annual certification statement signed by the responsible corporate officer. See § 125.97(c). In most cases, the statement would indicate the information from the previous statement is still pertinent. If modifications were made to the facility

that impacts cooling water withdrawals or operation of the cooling water intake structures, the statement would indicate such, and the facility w ould submit revisions to the information required in the ir permit application at § 122.21(r) . 4. Other Reporting In addition, EPA notes that supplemental reporting may be required under the ESA as part of any incidental take statement or permit (50 CFR 402.14(i)) or a s ection 10 permit (50 CFR 222.307) that is issued by the United States Fish and Wildlife Service or the National Marine Fisheries Service to ensure compliance with the Endangered Species Act. **I .**  **What Records Will**  **I Be Required to Keep?** As described at § 125. 97(d) , facilities are required to keep all permit application s , status, monitoring, and annual reports and related supporting information and materials at least until the subsequent permit is issued . F acilities might wish to keep records for a longer perio d to maintain a complete regulatory history of the facility . For example, existing source water biological studies submitted with a facility ’s permit application could contain data that has been collected in the past 10 or more ye ars. When the Director has approved a request for reduced information collection in the permit application , the rule requires that records of submissions that are part of a previous permit application be*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 337 of 567 kept until the subsequent permit is issued. See § 125.95(e). Records supportin g the BTA determination for entrainment must be kept until such time as the Director revises the determination. The Director may establish additional record - keeping requirements in the permit, such as additional records documenting compliance monitoring , data collection , or more frequent reports . Facilities must also keep records of all data used to complete the permit application and show compliance with the requirements of § 1 25.94, any supplemental information developed under § 1 25.95, and any complianc e monitoring data submitted under § 1 25.96. The Director may require that these records be kept for a longer period. **J .**  **What Are the Respective Federal, State, and Tribal Roles?** T oday ’s final rule affects authorized State and Tribal NPDES permit programs. Under 40 CFR 123.62(e), any existing approved section 402 permitting program must be revised to be consistent with new program requirements within one year from the date of this promulgation, unless the NPDES - authorized State or Tribe must amend or enact a statute to make the required revisions. If a State or Tribe must amend or enact a statute to conform to today ’s final rule, the revision must be made within two years of this promulgation. States and Tribes seeking new EPA authorization to implement the NPDES program must comply with the requirements when authorization is approved. This final regulation does not alter State authority under section 510 of the CWA . In addition to updating their programs to be consistent with today ’s final rule, States and Tribes authorized to implement the NPDES program are required under NPDES State program requirements to implement the cooling water intake structure*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 338 of 567 requirements of subpart J following promulgation of the final regulations. The permit requirements in this fi nal rule must be implemented upon the first issuance or reissuance of permits following promulgation . Duties of an authorized State or Tribe under this regulation are described throughout this section and include reviewing permit application materials, det ermining appropriate requirements, reviewing monitoring and reporting data, and assessing whether a facility is compl yi ng with the final rule’s requirements. EPA recognizes that some States have invested considerable effort in developing and implementing s ection 316(b) permits . This final regulation at § 125.98(b) and (g) allows the Director flexibility where there are ongoing permit proceedings or where a BTA determination has already been made based on substantially the same information required at § 122. 21(r) . EPA will implement these requirements where States or Tribes are not authorized to implement the NPDES program. **K. Protection of Endangered and Threatened Species**  **and Designated Critical Habitat**  1. Existing Requirements under s ection 9 of the Endangered Species Act The ESA imposes duties not just on Federal agencies but also on other entities. Section 9 of the ESA specificall y provides that it is unlawful for any person to “take” any endangered species of fish or wildlife except under defined circumstances. The Services (National Marine Fisheries Service or U.S. Fish and Wildlife Service) may provide an exemption to the prohibition on take in one of two way s. Take may be permitted un der s ection 10 of the ESA ( 16 U.S.C. § 1539 ) or the Services may provide an exemption for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 339 of 567 take that is incidental to otherwise legal activity through a statement that is included with the Services’ biological opinion developed during Federal agency consult ation. (16 U.S.C. 1536(o)) The incidental take statement specifies the terms and conditions necessary to implement reasonable and prudent measures which minimize incidental take. Nothing in today ’s rule changes the existing, independent obligations of the facilities subject to this rule under section 9 of the ESA . Unless ex empted by an incidental take statement or section 10 permit, facilities have been prohibited from taking (for example, harming or killing) endangered species of fish or wildlife . In order to obtain a section 10 permit, the facility would be required to develop a Habitat Conservation Plan (HCP) , which is a mandatory component of an incidental take permit application . The HCP must specify

the anticipated effects of the proposed taking, ho w those impacts will be minimized or mitigated, the alternative actions to the taking that the applicant considered, the reasons for not utilizing those alternatives, and other necessary or appropriate measures that the Secretary may require. 2. EPA’s Consultation Under Section 7 of the ESA Under s ection 7 of the Endangered Species Act , each Federal a gency must insure that any action authorized, funded, or carried out by the agency

“is not likely

to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined b y the Secretary , after consultation as appropriate with affected States, to be critical. . . .” 16 U.S.C. 1535(a)(2). In the case of any F ederal agency action subject to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 340 of 567 the ESA that may

affect listed species or critical habitat, the F ederal agency must consult with the concerned offices with responsibilities under the ESA, specificall y NMFS and/or FWS. 50 CFR 402.14(a). In July 2012, EPA began informal consultation with the NMFS about the proposed section 316(b) regulations. In October 2012, EPA began informal consultation with the FWS. EPA prepared a draft biological evaluation of the effects of this rule on threatened and endangered species and in it concluded that the rule was not likely to adversel y affect listed species or designated critical habitat. EPA was unable t o obtain the Services’ concurrence on EPA’s “not likely to adversel y affect” finding. In June 2013, EPA requested formal consultation with the Services under the Endangered Species Act and with that request submitted a final biological evaluation to the S ervices. EPA completed consultations with the Services and has included the Services’ biological opinion and associated documents in the record for this rulemaking. Among the organisms potentially subject to impingement and entrainment at cooling wat er intake structures are those that are listed as threatened and endangered . In addition to impinging or entraining threatened and endangered species, operation of CWI Ss may

also adversely

affect their critical habitat. Today ’s rule includes a number of provisions specificall y designed to address incidental take of all federally- listed threatened and endangered species and to insure that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse mo dification of critical habitat. These provisions are described below.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 341 of 567 The regulatory

model adopted by

EPA in the Phase I rule and later in the subsequently- withdrawn Phase II rule for large existing power producing facilities provided a structure to ad dress and minimize adverse impacts to threatened and endangered species. EPA’s approach required that facilities subject to the 316(b) rules, at the permit application stage of the permitting process must, among other things, identify threatened and endan gered species that might be subject to impingement and entrainment in order to ensure that the permitting authority would have the requisite information on which to make a decision about the need for controls to protect threatened and endangered species. See 40 C.F.R. § 122.21(r)(4). The Phase I and Phase II regulations specifically authorized the permit writer (referred to as the “Director” in EPA’s permitting regulations) to adopt measures designed to protect threatened and endangered species. Thus, fo r example, EPA’s Phase I regulations for cooling water intake structures at new facilities require that, under one of the compliance options, an owner or operator must select and implement impingement and entrainment minimization measures “if there are threatened or endangered or otherwise protected Federal, State or Tribal species.” Moreover, the permit writer may require additional impingement and entrainment reduction measures if the permit writer determines that the facility after meeting the required performance standard would “still contribute unacceptable stress to the protected species, critical habitat of those species or species of concern.” 40 C.F.R. 125.84(b)(4) & (5). The Phase II regulation continued the general approach followed in the Ph ase I regulation for protection of threatened and endangered species. Permit applicants needed*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 342 of 567 to submit the same information on threatened and endangered species required in the Phase I rule. In addition, building on the earlier information requirements , the regulation also would have required facilities selecting and implementing certain of the alternative BTA compliance measures to submit a Comprehensive Demonstration Study that, among other things, characterized impingement and entrainment at the faci lity . Further, the rule would have required a facility to submit an Impingement Mortality and/or Entrainment Characterization Study

that included taxonomic identification, characterization and documentation of current impingement mortality and entrainment of all life stages of fish, shellfish and any species protected under Federal, State or Tribal law (including threatened or endangered species). 69 FR 41687 - 88, July 9, 2004. In addition, the Phase I and II rules included a requirement for the facility t o include in their permit application documentation of any public participation or consultation with Federal or State agencies on impacts of their cooling water intake structure on threatened and endangered species. The regulation then would have required the permit writer to determine appropriate permit requirements and conditions. EPA noted that its existing NPDES permitting regulations reference a number of Federal laws that might appl y to Federally- issued NPDES permits, including the Endangered Spe cies Act. 69 FR 41643 - 44, July 9, 2004. Threatened and endangered species were important considerations in the proposal to today ’s rule and were of particular concern to the EPA. The preamble to the proposal reflects at a number of points that, in looki ng at the benefits of different regulatory options, EPA attempted to assess the benefits to threatened and endangered species. See 76 FR 22174, 22197, 22207. The proposal also noted the importance of obtaining*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 343 of 567 information for the permit writer about potential entrainment reductions. Thus, the proposal would have required certain facilities to develop and submit with their permit application detailed information on their operations as well as an engineering study of the technical feasibility

and increment al costs of candidate entrainment mortality control technologies and a detailed discussion of the magnitude of non - water quality benefits. EPA proposed that some facilities would need to submit an Entrainment Characterization Study that included an entrai nment mortality data collection plan that would indicate, at a minimum, taxonomic identification, latent mortality identification, documentation of all methods, and quality

assurance/quality

control procedures or sampling and data anal ys is appropriate for a quantitative survey . Under the proposal, EPA would also have required peer review of the entrainment mortality data collection plan. Peer reviewers would be selected in consultation with the Director who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially

affected by

the cooling water intake structure(s). Further, facilities with greater than 125 mg d AIF would complete an entrainment study . The entrainment study co uld include information already collected to meet the Phase II requirements at § 122.21(r)(2) - (r)(4) before those requirements were suspended . EPA and the Services have completed consultations on the rule. EPA has received the final biological opinion and associated documents from the U.S. Fish and Wildlife Service and the U.S. National Marine Fisheries Service and has included them in the record for the rule. The Services have concluded that the rule is not likely to jeopardize*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 344 of 567 the continued existence of listed species or result in the destruction or adverse modification of designated critical habitat. 3. Final R

ule P rovisions R elated to Threatened and Endangered S pecies As noted previousl y, establishing standards for cooling water intake structures to minimize impingement and entrainment of all aquatic organisms will promote and enhance protection of T&E species. In addition, the rule contains a number of provisions that specificall y concern T&E species; these provisions were developed in light of EPA’s consultation with the Services and were established by EPA to insure that this rule is not likely to jeopardize listed species or result in the destruction or adverse modification of designated critical habitat. To be clear, the ESA provisions of the rule extend to all listed T&E species, not just fish and shellfish. The treatment of T&E species in today ’s rule follows directl y from the Agency’s longstanding approach as well as from EPA’s proposed 2011 rule which indicated the EPA’s intention t o address protection of T&E spe cies. The rule adopts the identical approach followed in the Phase I and II rules, while adding some refinements to that earlier model which EPA discussed in the proposed rule. First, it adopts the proposed requirements that insure an adequate information base is submitted to the permit writer. As was the case with the Phase I and withdrawn Phase II rule, apprising the permit writer of the presence and extent of T&E species at a facility ’s intake continues to be an important element of the permit application requirements for existing facilities . While retaining the existing permit application requirement of 40 C.F.R. § 122.21(r), EPA has included in today ’s rule a provision at § 125.95(f) that requires a facility in its permit*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 345 of 567 application to identify

all Federall y- listed threatened and endangered species and designated critical habitat that are or may be present in the action area . The action area can generall y be considered the area in the vicinity of the cooling water i ntake structure. The evaluation is to be based on information readily available to the facility at the time of the permit application. In addition, the rule requires the largest withdrawing facilities to provide taxonomic identification of species in the vicinity of the intake, thus providing a mechanism for facilities to determine more accurately their potential impact on protected species. The rule requires that the Director transmit all permit applications to the Services upon receipt . The rule pro vides the Services with 60 day s to review the permit application. This 60 day

review takes place prior to the public notice of the State or Tribe’s draft or proposed permit. EPA expects that the Services will respond within 60 day s and provide to the Direc tor (1) any corrections to the list of Federally- listed threatened and endangered species and critical habitat included in the permit application, (2) any measures that the Services recommend (including monitoring and reporting) for the protection of liste d species, including any measures that would minimize any incidental take of listed species , and/or avoid likely jeopardy to a listed species or destruction or adverse modification of critical habitat, and/or (3) notify the State or Tribe that the Service( s) have no corrections to the list of species and critical habitat and/or that the Service(s) do not recommend any control measures. The Services’ 60 day review period does not constrain the Director’s ability to process the applicant’s permit application; however, the Director may not propose/publish the draft permit until the 60*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 346 of 567 day review period has ended , unless the Director has received the Services’ response prior to that time. In addition, the Services will receive, pursuant to existing regulations at 40 C.F.R. 124.10(c)(1)(iii) and (e), all permit applications, as well as fact sheets or statements of basis (for EPA - issued permits), draft permits, and public notices for all permits. At this stage of the process, the Services will have the opportunity to review the draft permit and other materials and provide any additional input or suggested control measures to address effects to listed species or critical habitat. Together, the existing and new requirements related to transmittal of permitting docum ents to the Services will ensure that the Services have the opportunity to provide information and recommendations to the permit writer relating to any facility that may affect listed species. This information will be part of the public record for the per mitting decision and the Director would be required to consider it as a relevant factor, along with all of the other relevant factors, in deciding what conditions to establish in the permit. Further, as explained in the MOA between EPA and the Services dis cussed elsewhere in today’s notice, EPA will use the full extent of its CWA authority to object to a permit where EPA finds that issuance of the permit is likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat. The rule ’s requirements insure a full vetting of information and concerns in the permitting process that must be considered by the Director . These requirements , coupled with the EPA’s commitment to exercise its oversight authority , i nsure that today ’s rule is not likely to jeopardize the continued*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 347 of 567 existence of a listed species or result in the destruction or adverse modification of designated critical habitat. Among the recommendations that may be made by

the Services to the facility and the Director are measures to minimize incidental take. EPA expects that any measures the Services recommend to minimize incidental take wil l be consistent with ESA regulations and guidances concerning reasonable and prudent measures. As stated in the ESA regulations under 50 CFR Part 402.14(i)(2), “Reasonable and prudent measures, along with the terms and conditions that implement them, canno t alter the basic design, location, scope, duration, or timing of the action and may involve onl y minor changes.” The Endangered Species Handbook (FWS and NMFS, 1998) explains that: “Measures are considered reasonable and prudent when they are consistent with the proposed action's basic design (e.g., narrowing of disturbed right - of - way at known species locations), location (e.g., temporary storage of equipment or other materials), scope, duration, and timing. Reasonable and prudent measures and terms and conditions should be developed in coordination with the action agency and applicant, if any , to ensure that the measures are reasonable, that they cause onl y minor changes to the project, and that they are within the legal authority and jurisdiction of the agency or applicant to carry out.” Installation of closed - cycle cooling is a major design alteration of a facility involving significant design and construction activities (the range of costs associated with closed - cycle cooling is described elsewhere in today ’s notice). Because installation of closed - c ycl e cooling does alter the basic design of a facility and would involve more than*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 348 of 567 minor changes, as described in the Serv ices’ regulations and Handbook, EPA does not expect that installation of closed - c ycl e cooling would be specified as a measure solel y for purposes of minimizing incidental take. The final rule at § 125.98(j) provides that nothing in this rule authorizes the take of threatened or endangered species of fish or wildlife. However, the Services may exempt take through an incidental take statement issued pursuant to ESA s ection 7( o ) or a permit under ESA s ection 10. See 16 U.S.C. 1536 (o) and 16 U.S.C. 1539. This Clean Water Act rule cannot authorize take and does not purport to do so (nor can NPDES permit s authorize take prohibited under the ESA). Accordingl y, under § 125.98(b)(1), the permit writer, including EPA, must include, in the 316 (b) permit requirements, standard language that states the permit does not authorize the take of Federall y- listed threatened and endangered species . In addition, under § 125.96(g) (additional monitoring requirements) and § 125.97(g) (additional reporting requirements),where the Director requires additional measures to protect listed species, monitoring and reporting requirements associated with those measure s will be included in the permit. 4. EPA Oversight of State - issued NPDES P ermits to P rotect Threatened and Endangered S pecies. In 2001, the EPA, FWS, and NMFS signed a Memorandum of Agreement (MOA), (66 FR 11202 , Feb. 22, 2001 ) with the objective of enhancing coordination between the agencies and to assist the agencies in executing their respective responsibilities under the Clean Water Act and Endangered Species Act . The MOA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 349 of 56 7 reflects, in part, the EPA’s longstanding commitment to overseeing the operation of state NPDES programs to ensure protection of endangered species with existing regulatory requirements. The EPA reaffirms its commitment to ensure coordination of the EPA’s and Services’ programs and appropriate protection of listed species, and EPA will follow the procedures in the MOA in overseeing implementation of this rule. The MOA committed the EPA to a number of specific actions that are pertinent to today ’s rule. Under the MOA, EPA committed, when contacted by the Services, to coordinate with the Services and the State/Tribe during the permit development process, in order to ensure that permits will comply with all applicable CWA requirements. One way in which coordination b etween EPA and the Services is facilitated is through the exchange of information about permits. The MOA facilitates such information exchange, as do EPA’s NPDES permit regulations at 40 C.F.R. § 124.10, that preceded the MOA. These regulations require the Director to provide public notice and a comment period for draft permits, and to notify persons identified at 40 C.F.R. § 124.10(c)(1)(iii) and (iv). Such persons specifically include Federal and State agencies with jurisdiction over fish, shellfish, and wildlife resource and over coastal zone management plans and thus include the U.S. Fish and Wildlife Service and the National Marine Fisheries Service . EPA’s commitment to coordinate effe ctivel y with the Services includes following the procedures in section IX.A.6 and 7 of the MOA: EPA may make a formal objection, where consistent with its CWA authority , or take other appropriate action, where EPA fin ds that a State or Tribal NPDES*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 350 of 567 permit will likely

have more than minor detrimental effect on Federally- listed species or critical habitat. For those NPDES permits with detrimental effects on Federall y- listed species or critical habitat that are minor, it is the intention of the Services and EPA that the Services will work with the State or Tribe to reduce the detrimental effects stemming from the permit. For those NPDES permits that have detrimental effects on Federall y- listed species or critical habit at that are more than minor, including circumstances where the discharge fails to ensure the protection and propagation of fish, shellfish and wildlife, and where the State or Tribe and the Services are unable to resolve the issues, it is the intention o f the Services and EPA that EPA would work with the State or Tribe to remove or reduce the detrimental impacts of the permit, including, in appropriate cases, b y objecting to and Federalizing the permit where consistent with EPA's CWA authority . EPA will use the full extent of its CWA authority to object to a State or Tribal permit where EPA finds (taking into account all available information, including any anal ys is conducted by

the Services) that a State or Tribal permit is likely to jeopardize the conti nued existence of any listed species or result in the destruction or adverse modification of critical habitat. EPA may review or waive review of draft State or Tribal NPDES permits (40 CFR 123.24(d)). EPA will work with the Services through the local/regio nal coordinating teams to help determine which categories of permits should be reviewed for endangered species concerns. If EPA finds that a draft permit has a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 351 of 567 reasonable potential to have more than a minor detrimental effect on listed species or critical habitat, and review of a draft permit has been waived, EPA will withdraw this waiver during the public comment period (see 40 CFR 123.24(e)(1)). The grounds for EPA’s exercise of its discretionary authority to object to State or Tribal permits are described in the NPDES regulations at 40 C.F.R. § 123.44. These include that the proposed permit fails to comply , or to ensure compliance with, any applica ble requirement of this part, for example, that a permit application did not contain information sufficient to demonstrate that the permit will ensure compliance with applicable requirements. See 40 C.F.R. § 123.44(c)(1). If EPA objects to a NPDES permit under the MOA, EPA will follow the permit objection procedures outlined in 40 CFR 123.44 and coordinate with the Services in seeking to have the State o r Tribe revise its permit. A State or Tribe may not issue a permit over an outstanding EPA objection. If EPA assumes permit issuing authority for a NPDES permit, EPA will consult with the Service prior to issuance of the permit (as a Fed eral action) as appropriate under s ection 7 of the ESA. While the MOA was adopted by the agencies in the context of NPDES permits for discharges of pollutants, it applies equally to NPDES permits that contain conditions for cooling water intake structures. Moreover, section 316(b) of the CWA accords EPA broad authority to protect waters of the United States from adverse environmental*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 352 of 567 impacts associated with cooling water intake s tructures, including adverse effects to Federall y- listed species and designated critical habitat. In implementing this provision, EPA is authorized to consider costs and benefits of different approaches to minimizing these impacts. The importance of list ed species, and accordingl y the benefits associated with preventing their extinction, animated Congress’s enactment of the Endangered Species Act in 1973. In the case of aquatic organisms that are listed as endangered or threatened, and designated critical habitat, EPA has the authority , and will exercise the full extent of its authority , to object to a permit proposed by a State where EPA finds (taking into account all available information, and giving, as appropriate, substantial weight to the views of the Services) that a State or Tribal permit is likely to jeopardize the continued existence of such species or result in the destruction or adverse modification of such critical habitat. If the State permit is not modified to address EPA’s objection s, EPA w ill issue the permit in co nsultation with the Services. EPA’s commitment to use the full extent of its CWA authority to object to permits that are likel y to jeopardize listed species or result in the destruction or adverse modification of critical habitat is a safeguard for the protection of listed species and critical habitat. Additionally , where the Service communicates in writing to EPA its conclusion that a proposed State permit is likely

to jeopardize the continued existence of a listed species, EPA wi ll, upon request, provide the Service a written response. EPA’s commitment to use the full extent of its CWA authority , along with the other provisions of the rule requiring the EPA, the Services, and State Directors to fully consider effects to threatened and endangered species and critical habitat and include appropriate protections in NPDES permits, insures*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 353 of 567 that the rule is not likely

to jeopardize the continued existence of listed species o r result in the destruction or adverse modification of designated critical habitat . **L .**  **Permits for Existing Facilities Are**  **Subject to Requirements under Other Federal Statutes**  EPA’s NPDES permitting regulations at § 1 22.49 list Federal laws that might apply to the issuance of NPDES permits under the NPDES rules . These include the Wild and Scenic Rivers Act, 16 U.S.C. 1273 et seq.; the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.; the Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental Policy Act, 42 U.S.C. 4321 et seq. For a brief description of each of these laws, see § 1 22.49. The provisions of the Magnuson - Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq., relating to essential fish hab itat might also be relevant. EPA’s permit application requirements ensure that FWS and NMFS wil l have

— and other Federal agencies as well, should have

—a broader information base from which to make informed decisions. Note also that, in the case of EPA - issued permits, EPA’s NPDES permitting regulations specificall y require following the requirements o f specific Federal laws that may apply to the issuance of NPDES permits. **I X.**  **Cost Development and Economic Impact Analysis**  This section summarizes EPA’s anal ys is of the soci al cost and economic impact for three regulatory

options . Inaddition to today ’s rule, referred to as the Final Rule, EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 354 of 567 anal yz ed two other options similar to those options at proposal (see section VI .D Other Options Con sidered for Today ’s Final Regulation for more context). The regulatory options can be described as follows :

 Final Rule: Flexible i mpingement mortality performance standard for existing units based on modified traveling screens with fish returns for all facilities with DIF greater than 2 mgd, closed - cycle cooling or its equivalent for new units for impingement and entrainment, and a national BTA standard that requires a site determination of entrainment BTA for all other existing units at existing facilities;

 Proposal Option 2: Intake flow commensurate with closed - cycle cooling for facilities that have a design intake flow of greater than 125 mgd , flexible impingement mortality limitations based on modified traveling screens with fish returns for all facilities with DIF greater than 2 mgd , and closed - cycle cooling or its equivalent for new units ; and

 Proposal Option 4: Flexible i mpingement mortality limitations based on modified traveling screens for all facilities with DIF greater than 50 mgd, closed - cycle cooling or its equivalent for new units, and a site - specific determination of entrainment BTA for all other facilities and for impingement mortality

controls at facilities with flow less than or equal to 50 mgd .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 355 of 567 The firs t part of this section provides an overall summary of the costs of the regulatory

options to regulated faciliti es and F ederal and S tate governments. This discussion is followed by a review of the method for developing compliance cost estimates. The third part provides an estimate of the total social costs of the regulatory options. The final part reviews the econom ic impact of the regulatory options. **A. Overview of Costs to**  **Regulated Fa**  **cilities and Federal and State Governments**  In estimating the total cost of the regulatory options, EPA estimated costs for the following components: capital costs and other one - time costs; installation downtime costs; annual operation and maintenance costs; and recordkeeping, monitoring, entrainment - related studies, and reporting costs. All of these costs are included in the economic impact analy sis for the final rule. The cost estimates reflect the incremental costs attributed only

to this final rule. For example, facilities already having closed - cycle recirculating s ys tems a s defined at § 125.92 will meet the impingement mortality and entrainment standards of today ’s rule and , therefore , will not incur costs to retrofit new technologies . These facilities , including those in New York and California, will still incur permitting costs . EPA has established that existing closed - cycle recirculating sy stems will comply

with the impingement BTA requirements . For the economic analy s i s , EPA distinguished between the two industry groups regulated by

the standards for existing facilities as follows:

 Electric P ower P roducers (electric generators)

— facilities owned by investor owned utilities, municipalities, States, F ederal authorities, cooperatives, and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 356 of 567 nonutilities, whose primary business is electric power generation or related electric power services.

 Manufacturing and Other Industries (manufacturers)

—facilities in the paper, aluminum, steel, chemicals, petroleum, food and kindred products (primary manufacturing industries), and other industries. In addition to engaging in production activities, some of these facilities also generate electricity for their own use and occasionally produce excess power for sale. F or a more detailed discussion of costs to regulated facilities and costs to F ederal, State, and local governments , see Chapter 8 of the TDD and Chapter 3 of the EA. Electric g enerators incurring costs include facilities owned by private firms, governments, and electric cooperatives. Manufacturers incurring costs include facilities own ed b y private firms only. The administrative costs to F ederal, State, and local governments include the costs of rule implementation

—e.g., permits, monitoring, and working with facilities subject to the final rule to achieve compliance . In the economic anal ys i s , EPA accounted for these c osts on an as - incurred basis. They are reported on a pre - tax or after - tax basis, depending on the specific component of the anal ys is. These costs also underlie the anal ys is of the social costs of the regulatory options. **B. Development of Compliance Costs**  This section describes the data and methods used to estimate compliance costs of the options considered for today ’s final rule . Costs were developed for technology controls to address impingement mortality separately

from technology controls for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 357 of 567 entrainment because the requirements of the various rule options considered may lead to different technologies being used b y each facility to comply . The options considered may impose different compliance timelines for imp ingement mortality and entrainment control technologies , although decision making has been s ynchronized to avoid investments in impingement BTA controls that could later be rendered obsolete by the BTA requirements for entrainment . D ifferent methodologies were used and each is briefl y described below . More detailed information on these methodologies and costs of other technologies and regulatory approaches are available in Chapter 8 of the TDD. 1. Combined Facility- S pecific and Model - F acility Approach EPA estimated national level cost s for regulated facilities under the final rule and other regulatory options . In general, facility- specific data can be used to determine the requirements that appl y t o a facility and whether that facility already meet s the final rule ’s requirements . This approach requires facility- specific technical data for the approximately 1, 065 facilities that EPA estimates will be subject to the final rule . The change in the number of facilities subject to the final rule compared to the number estimated at proposal is attributable to changes in how EPA accounted for baseline closures. See Appendix H of the EA for more details. An alternative approach is to develop a series of model facilities that exhibit the ty pical characteristics of the regulated facilities and calculate costs for each model facility; EPA would then determine how many of each model facility

would be needed to accurately represent the full universe of regulated facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 358 of 567 The approach used in this effort involved calculating compliance technology costs for 338 individual facilities for which EPA had detailed technical data from its questionnaires regarding the intake design and technology . Specifically , these are the facilities that completed the detailed technical questionnaire . Where facilities reported data for separate cooling water intake structures, EPA derived compliance technology costs for each intake , and summed these intake costs to obtain total costs for each facility . EPA used the actual facility data to construct model facilities . Each model facility’s costs were then multiplied b y a specific weighting factor , derived from a statistical analy sis of the industry

questionnaire , to obtain industry- wide costs . The weighting factors are similar to the ones derived during the development of the 2004 Phase II and 2006 Phase III r ule s . 2. Updates to the Survey Data For the 2004 Phase II rule anal ys is , EPA developed facility- specific cost estimates for all facilities and published those costs in an a ppendix (69 FR 41669 , July 9, 2004 ) . Since the initial implementation of the 2004 Phase II rule, EPA identified several concerns with using onl y the facility- specific costing approach, and the use of those costs in Appendix A . Since 2004 EPA has collected data from industry an d other groups as described in S ection III of the proposed rule (76 FR 22183 , April 20, 2011 ). These data generall y reflect changes to actual intake flow, design intake flow, intake velocity, technology

in place, and operational status . EPA developed a new master database including this new data to supplement the data from the detailed technical questionnaire. Although it has been more than 10 years since the detailed technical questionnaire was*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 359 of 567 initially collected, EPA has undertaken more than 50 site visits and reviewed available literature . In addition, EPA compared its data with that collected b y Edison Electric Institute, Electric Power Research Institute , and the Energy Information Administration. On the basis of that review , EPA con cluded that the master database is representative and reasonabl y reflects costs for all facilities. 111 The following section describes how EPA used this new databas e to estimate compliance costs. 3. Tools for Developing Compliance Costs During development o f the 2004 Phase II rule, EPA began developing a spreadsheet - based tool that would provide facilities and permit authorities with a simple and transparent method for calculating facility- specific compliance costs . EPA refined the tool in developing the Pha se III regulations. EPA has since made further refinements to the cost tool, which was used to calculate the compliance costs for impingement mortality for today ’s final rule . The cost tool employ s a decision tree (for a graphical presentation of the decis ion tree , see Chapter 8 of the TDD ) to determine a compliance response for each model facility . The decision tree assigns a technology costing “module ” for th e retrofit to a given technology . Impingement c ost estimates are derived through a series of computations that apply facility- specific data (such as DIF, width of intake screens, and such ) to the selected technology module . Cost tool outputs include

111 EPA notes that , while it has not collected updated technical information for every facility , it has updated financial d ata, as discussed later in this section.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 360 of 567 capital costs, incremental operation and maintenance costs, and installation downtime (in weeks). To calculate the compliance costs of retrofitting to closed - cycle cooling for controlling entrainment, EPA u s ed a second tool based on a cost - estimating spreadsheet using a modified version of a similar tool developed by the Electric Power Research Institute (E PRI ). EPRI’s first draft methodology presented three levels of capital cost according to the relative difficulty of the retrofit project ( e as y, average, and difficult) . For electric generators, EPA used costs for the average level of difficulty because it was developed across a broad spectrum of facilities and is the most appropriate for estimating national level costs rather than lower or upper bounds. For manufacturers, EPA used the difficult level of retrofit costs. This reflects the more complex wat er s ys tems and technical challenges to retrofitting closed - cycle cooling at multiple locations within a manufacturing facility . In site visits, EPA found the largest manufacturing facilities had multiple intakes, distributed the water to multiple productio n processes, have already significantl y increased water reuse as a result of water audits, and generally operate a complicated water distribution network at the entire facility, and would therefore require multiple retrofits to convert the facility to be c ommensurate with closed - cycle recirculating s ys tem. 112 A ccordingl y , EPA determined that the difficult level of retrofit costs is more representative for purposes of estimating national level costs . EPA’s tool

112 A refinery, for example, may have dozens of heat exchange processes throughout the facility , including a mix of wet and dry non - contact cooling equipment.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 361 of 567 includes additional modifications to EPRI ’s metho dology , such as increased compliance costs for approximately

25 percent of facilities to reflect the additional expense of noise control or plume 113 abatement, and using onl y the cooling water flow rate for non - contact cooling water flow 114 for purposes of estimating costs for closed - cycle cooling . EPA has included the spreadsheet tools in the docket for today ’s final rule to assist both facilities and permit authorities in estimating compliance costs ( s ee DCNs 12 - 6650 and 12 - 6651 for the cost tool, as w ell as and DCN 10 - 6930 for EPRI ’s retrofit anal ys is ). 4. Which Technologies Form the Basis for Compliance Cost Estimates? EPA identified two broad classes of control technologies that may be used singularl y or in combination to comply with the final rule . These classes of control technologies are ( 1) technologies that address impingement mortality , and ( 2) technologies that address entrainment . For further details , s ee Section VI . For the impingement mortality requirements, EPA anal yz ed data from a wide variety of technologies and facilities, and concluded that modified ( Ristroph or equivalent) 3/8” mesh traveling screens with fish - friendly fish handling and returns are the most ap propriate basis for determining compliance costs. 115 As discussed in Section

113 The EPRI tool includes drift abatement technologies in its cost assumptions, so no additional costs were included for drift eliminators. 114 As described in the TDD, EPA used only non - contact cooling water flows in determining the proper size for wet cooling towers. Cooling towers are not widely used for contact cooling or process water, so these flows were excluded. For electric generators, the vast majority of flow is non - contact cooling, but manufacturers are more varied in their water usage. 115 Note that this does not preclude the use of other technologies; EPA simply used the available performance data in deriving the performance requirements. EPA’s research has shown that other*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 362 of 567 VI of th is preamble, a facility may also comply

with impingement mortality requirements by meeting a low velocity compliance alternative , operating a closed - cycle recirculating sy stem as defined at § 125.92 (c) , or employing an existing offshore velocity cap as defined at § 125.92 (v) . On the basis of facility- specific data, EPA made a preliminary assessment of which model facilities would not currentl y meet imping ement mortality requirements through any of these pre - approved technologies , and assigned technology costs on the basis of modified traveling screens with a fish handling and return sy stem if the existing intake us ed traveling screens. If the intake does not currentl y use traveling screens , EPA assigned costs for install ing technologies that would compl y with the low velocity compliance alternative (larger intakes, wedgewire screens, or variable speed pumps) based on site - specific conditions . These assigned technologies will meet the BTA standard (see § 1 25.94(b)) . Although EPA no longer requires installation of barrier nets or equivalent technologies to protect shellfish in all tidal waters, EPA included the cost of barrier net technology at approx imately 10 percent of the intakes as a cost component for the “sy stems” approach to compliance with the IM standards . EPA also anal yz ed the costs of those options associated with entrainment requirements based on wet cooling s ys tems. EPA also evaluated other technologies for reducing entrainment, such as seasonal operation of cooling towers, partial towers, variable speed pumps, and fine - mesh screens. The costs of the final rule include but are technologies may also be capable of meeting the final rule requirements; however, these technologies are not available at all facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 363 of 567 not limited to permit applications; characterization of the source water, intake structures and any technologies in place; studies of impingement and entrainment; and recordkeeping, monitoring, and reporting. The costs also include costs of technologies for complying with the BTA for IM; the cost of additional technologies that may be required to meet the site - specific BTA for entrainment are not included , nor are costs for additional measures that may be required for protection of listed threatened and endangered species . Section VI further describes the performance of these technologies . A detailed discussion of how the costs were developed is in Chapter 8 of the TDD . 5. How is In stallation Downtime Assessed? Installation d owntime is the length of time that a facility might need to shut down for install ing a compliance technology . Downtime estimates primaril y assume that the facility would need to completely shut down operations for some portion of the installation period to retrofit an intake, such as relocating an intake, connecting wet cooling sy stems into the facility , or reinforcing co ndenser housings. EPA estimated downtime as incremental outages, taking into account the periodic outages all facilities incur as part of preventative maintenance or routinely scheduled outages. For example, nuclear facilities have refueling outages approx imately every 18 months lasting approximately

40 day s. 116 The entrainment control implementation periods under Proposal Option 2 , 10 years for fossil fuel facilities and 15 years for nuclear facilities ,

116 Nuclear Energy Institute reported average length of outage from 2003 to 2009.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 364 of 567 would provide facilities with an opportunity to schedule the retrofit when other major upgrades are being done, thereb y significantl y reducing downtime. For most facilities subject to impingement mortality , EPA assigned no incremental downtime . Facilities that are replacing or rehabilitating existing traveling screens typically do so one intake bay at a time without affecting the overall operations . 117 EPA has also found that facilities that need to scrub screens do so during other routinel y scheduled outages. For some compliance technologies , however, such as relocating an intake or expanding an existing intake to lower the intake velocity , several weeks of downtime may

be incurred because these are more invasive tasks. See TDD Exhibit 8 - 4 for EPA’s net construction downtime for the various IM compliance technologies. EPA reviewed historical retrofit data and site visits conducted since 2004 and has largel y retained its assumptions for downtime from the Phase II and Phase III rules for facilities retrofitting to closed - cycle cooling. On average , EPA assumes the net installation downtime for retrofitting to closed - cycle cooling for non - nuclear electric generators is 4 weeks . This total downtime allows for the tie - in of the closed - cycle sy stem to the existing cooling water s ys tem. The ref ueling outage downtime, the safetysensitive nature of nuclear facility retrofits, and other data in EPA’s record supports 28 weeks as the net construction downtime for nuclear facilities . EPA converted downtime

117 EPA’s data shows that facilities have an average of 4 to 5 bays.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 365 of 567 for manufacturing facilities that use coolin g water for power and steam generation into the incremental cost for purchas ing electricity during the outage . For individual process units other than power generation units at a manufacturing facility , on average the downtime was assumed to be zero. In EP A’s extensive experience with manufacturers, EPA ’s record reflects that manufacturers are generally able to shut down individual intakes for specific process lines, use inventory approaches such as temporary increases of intermediate products, and develop other workarounds without interrupting the production of the entire facility . F or further discussion of how EPA accounted for installation downtime in estimating national costs , s ee below. 6. How is the Energy Penalty Assessed? The term energy

penalty in relation to a conversion to closed - cycle cooling has a number of different interpretations . The first is the extra power required to operate fans at a mechanical draft cooling tower and additional pumping requirements ( sometimes referred to as auxiliary energy requirements or parasitic loads ) . The second is the lost power output because of the reduction in steam turbine efficiency from an increase in cooling water temperature relative to once - through cooling (often referred to as the turbine efficiency

penalty or turbine backpressure penalty) . EPA is clarifying that it views the former as incremental O&M costs, and the latter is EPA’s interpretation of the energy penalty . Energy

penalty costs appl y only to facilities retrofitting to cl osed - cycle cooling without replacing the condenser . F acilities installing a new impingement mortality technology

will not generall y face an energy penalty and will generall y see little or no measureable change in auxiliary power consumption . EPA’s national - level*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 366 of 567 costs include both these costs . The auxiliary power consumption was included as a separate component in the operation and maintenance costs and was assessed for all facilities . The turbine efficiency penalty was typically expressed as a percentage of power output . EPA estimates the turbine efficiency energy penalty for nuclear and non - nuclear power generation would be 2.5 and 1.5 percent , respectively (see Chapter 8 of the TDD) . For most manufacturers generating their own electricity , EPA assumed th e same energy penalty for turbine efficiency

loss as estimated for non - nuclear power facilities (i.e., 1.5 percent ). 7. How Did EPA Assess Facility- Level Costs for the National and Regional Economic Impacts Analys i s? As part of the economic impact anal ys i s, EPA assessed the impact of the final rule’s requirements on electric generators in the context of national and regional electricity markets. For this analysis, EPA used the Integrated Planning Model (IPM ® ) , a comprehensive electricity market optimization model that assesses such impacts within the context of regional and national electricity markets. EPA has used IPM to anal yz e the impacts of various regulatory actions affecting the electric power sector ov er the last decade, particularly Clean Air Act regulations. Because IPM requires facility- specific cost s for each analyzed facility , yet compliance costs were developed as weighted sums of model facility costs, EPA developed a method to distribute the a ggregate costs to facilities that were not themselves model facilities . For these facilities, EPA converted facility- level costs developed for m odel facilities to a cost per mgd DIF and then averaged these values to derive cost*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 367 of 567 equations using DIF as the i ndependent variable . Th e s e cost equation s provide average costs that can be applied to any facility by simpl y scaling to that facility ’s DIF . For details on the IPM anal ys is , s e e the EA, Chapter 6 . For details on facility cost development, see the TDD, Ch apter 8. 8. How Did EPA Assess Costs for New Units? Power generation and manufacturing units that are a new unit as defined at § 125.92 (u) must meet an entrainment reduction performance standard based on closed cycle cooling or an equivalent reduction in entrainment for the cooling water component of the intake flow based on the DIF. This section briefl y describes the data and methods used t o estimate compliance costs for new units at existing electric generators and manufacturers. Chapter 8 of the TDD has a complete description of the methodology . a. New Units at Existing Electric Generators Compliance costs for new units at existing electric generators are estimated using a similar methodology

to that used for estimating compliance costs for existing facilities. As described in Chapter s 6 and 8 of the TDD, however, there are a number of differences in costs between a closed - cycle coo ling retrofit at an existing facility compared to installing closed - cycle cooling at a new unit. In general, these differences result in lower costs for the installation of a closed - cycle recirculating s ys tem at a new unit (as compared to a retrofit scenario), due to improved efficiency of the turbine, the elimination of construction downtime, greater ease of integrating the closed - cycle sy stem into the design and construction of the new unit, offsetting costs of certain system and construction components, and greater overall s ys tem optimization.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 368 of 567 EPA could not determine precisel y which facilities will construct new units. Instead, EPA used an approach to estimate what portion of the new capacity (i.e., additional megawatts capacity to be constructed each year) would be subject to the final rule. Using national projections of increased generating capacity , 118 EPA categorized the new capacity into three groups for 316(b) compliance purposes: 1) subject to the Phase I rule, 119 2 ) subject to today ’s final rule, but projected to install a cooling s ys tem that complies with the rule regardless of the rule requirements, 120 and 3 ) subject to today ’s rule and projected to incur compliance costs. Exhibit IX - 1 presents the estimated total new capacity and the estimated capacity for new s tand - alone units. Exhibit IX - 1

**Fuel Type**  **Total Including Phase**  **I Existing**  **Facility New Units Only New**  **Capacity Stand**  **- Alone** 

**MW MW**  **Fossil Fuel** 295 80 **Combined Cycle** 3,264 147 **Total** 3,559 227

118 Capacity increases include considerations for fuel type . See Chapter 8 of the TDD for details. 119 New capacity that is part of a new facility (as defined by the Phase I rule) is subject to separate requirements not addressed by today’s rule. Today’s requirements for new units require flow reduction commensurate with a closed - cycle recirculating cooling system. 120 Data in the record show a marked increase in the use of closed - cycle cooling in facilities constructed in recent years and for those projected to b e constructed in the near future. These data indicate that in the 1990s (prior to the Phase I rule), 83 percent of new cooling systems installed were closed - cycle cooling systems and that the current trend was approximately 97 percent. Based on these d ata EPA assumed that 75 percent to 90 percent of new units will be designed with a closed - cycle recirculating cooling system regardless of the requirements of today’s rule. See DCN 12 - 6672 . As a result, this category of ne w capacity wa s not assigned any compliance costs.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 369 of 567 Costs for closed - cycle cooling are assigned t o a portion of new stand - alone units, as shown the generating capacities in Exhibit IX - 3 . **Exhibit IX -**  **3**

**Fuel Type**  **Annual Only**  **24 -**  **year Total Only**  **Stand -** **Alone Stand**  **- Alone**  **MW MW**  **Fossil Fuel** 8 **191 Combined Cycle**  15 **353 Total**  23 **544** EPA then estimated the total costs for the third group (i.e., those units that would incur compliance costs) to comply with requirements for new units. EPA used certain assumptions regarding cooling s ys tem design to modify cost equations used for estimating closed - cycle retrofit costs at exis ting units and then applied the cost equations to the portion of projected new unit generating capacities that w ould be subject to the new unit provisions of today ’s rule. These costs include capital 121 and O&M costs, as

121 The record indicates that the total estimated capital cost for installing a closed - cycle recirculating system at a new unit to comply with today’ s rule ranges from a negative value (as compared to the cost for installing a once - through system) to a positive value that could approach the cost of an existing facility retrofit. Said differently, if one assumes that the new unit would have constructed a new intake structure, EPA’s record shows that the capital costs for the new unit once - through system would be greater than if the new unit installs a closed - cycle recirculating system. (See DCN 10 - 6650.) Alternatively, if the new unit did not require mod ification of the existing cooling system infrastructure, then the capital costs for installing a closed - cycle recirculating system would be similar to an existing facility retrofit minus some tie - in costs since the condenser is being replaced. While EPA envisions that the actual costs will vary (i.e., some will be in the negative portion of the range and others will be in the positive), EPA is also unable to project what cooling water intake arrangements a new unit will use. Consequently, for all new units, EPA selected a capital cost equal to the midpoint between the tower only and the easy retrofit costs. As a result, EPA assumed that the capital costs for these units was $154 per gpm in 2009 dollars which converts to $30,800 to $60,060 per MW capacity dep ending on fuel type. For a more detailed discussion, see TDD Chapter 8.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 370 of 567 well as a reduction in net generating capacity due to auxiliary

power consumption to operate the closed - cycle recirculating s ys tem. Due to the complex nature of constructing a new unit, there is no increase in the length of the construction project as a result of employing a closed - cycle sy stem; similarly , there is no downtime, as the unit has not yet begun operating. See Chapter 8 of the TDD for more information. b. New Units at Existing Manufacturers On the basis of site visits to manufacturing facilities, EPA has observed that manufacturers are increasingl y taking advantage of water conservation and reuse measures as a means of cost - cutting. EPA also notes that manufacturers are subject to a wide vari ety of E LGs and that, in the course of complying with requirements for those EL Gs, a facility

may also reduce its intake flow. (See Chapter 4 of the TDD.) A new unit provides the opportunity

to employ

such measures to the fullest extent in designing the new unit. The availability of water conservation and reuse opportunities, coupled with operational flexibility

at facilities with multiple industrial processes, leads EPA to conclude that facilities installing new units at existing manufacturer s will comply with the new unit provisions through achieving the 90 percent reduction required at § 125.94(e)(2). Thus, EPA concluded that the new unit provisions would result in no*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 371 of 567 additional compliance costs for achieving flow commensurate with clos ed - cycle cooling at new units. 122 To the extent that manufacturers are not able to incorporate water reuse measures as a means of complying with the new unit provision, EPA’s estimate of new unit costs for manufacturers may

be an underestimate. Manufacturers generall y withdraw less water than electric generators (including manufacturers who generate their own electricity). Thus EPA has concluded that any underestimation would be insignificant. **C. Social Cost**  **s** EPA assessed the costs to society resulting from the final rule and other options considered in development of this rule . The findings presented in this section assume that facilities with impoundments will qualify as having closed - cycle recirculating s ys tems in the baseline . 123 As a result, EPA assigned no compliance technology costs to these facilities; however, these facilities remain subject to today ’s rule and are assigned administrative costs. To the extent that some of these facilities do not qualify as having closed - cycle recirculating s ys tems in the baseline, the costs reported in this section may be underestimates. The social cost of regulatory actions include s costs to e lectric g enerators and m anufacturers to compl y with the final rule , and costs to State s and the F ederal government to administer the rule. These costs are the opportunity cost s to

122 EPA also notes that some manufacturers may also be able to increase reuse to a degree where the facility no longer meets the applicability thresholds of today’s rule. 123 In other words, EPA assumed facilities indicating use of an impoundment in response to their technical survey have la wfully created such impoundments for the purposes of cooling water.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 372 of 567 society of employing scarce resources to prevent the environmental damage that would occur without today ’s rule. EPA estimated total social costs for existing and new units at exi sting facilities. In estimating social costs , EPA assumed that the final rule and other options considered in development of this rule will not affect the aggregate quantity of electricity or other affected goods and services sold to consumers. Thus, the s ocial cost of regulatory requirements includes no loss in consumer and producer surplus from reduced sales of electricity or other goods and services produced by regulated facilities . The Agency calculated the social cost of the final rule and the other op tions considered using two discount rate s : 3 percent and 7 percent. For existing facilities, EPA assumes that all facilities subject to the final rule will begin bearing costs associated with today ’s rule beginning as soon as 2014, and likely complete investments associated with today ’s rule by 20 30 , depending on the technologyinstallation schedules for the final rule and other regulatory options considered. 124 EPA performed the social cost anal ys is over a 5 1 - year period to reflect (1) the last year in which individual facilities are expected to achieve compliance (20 30 ) under the final rule

124 EPA conducted the cost and economic impact analyses on a calendar - y ear basis . For these analyses, EPA used calendar year 2013 as the promulgation year of today’s rule and 201 4 as the first post promulgation analysis year . This slight difference from the actual promulgation year of 2014 results from the fact that EPA completed its cost and economic impact analyses for the final rule and alternative options before EPA decided to delay promulgation from 2013 to 2014. Because the rule is being promulgated during the first half of 2014, EPA concl uded that it would be reasonable to continue using 2013 as the assumed promulgation year fo r the regulatory analysis . EPA expects the d ifferences in the estimated costs and benefits of the rule due to this slight imprecision to be minimal.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 373 of 567 or any of the options considered , (2) the life of the longest - lived co mpliance technology installed at any

facility (30 years), and (3) a period of five ye ars after the last year of compliance technology

operation during which benefits continue to accrue . Under this framework, the last ye ar for which EPA has calculated proje cted costs is 205 9 , with benefits continuing beyond 2059, though on a diminishing basis, through 206 4 . 125 To estimate social costs for existing facilities, EPA developed a year - explicit schedule of compliance outlay s over the 46 - ye ar period from 2014 to 2059 according to cost - incurrence assumptions (for details on cost - incurrence assumptions, see EA, Chapter 3 ). EPA then adjust ed the se costs for predicted real change (i.e., adjusted for inflation) to the year of their incurrence and discounted all costs to th e beginning of 201 3 , the promulgation ye ar used for the anal ys is. Because the anal ys is period extends beyond the useful life of some compliance equipment, the social cost anal ys is accounts for re installation of impingement mortality compliance technologies after the end of th eir initial useful life periods. However, for the regulatory option that requires a specific entrainment control technology (e.g., wet cooling sy stems)

—Proposal Option 2

—EPA does not expect regulated facilities t o completely rebuild these sy stems (components such as piping and the concrete basin can be reused) . EPA accounted for other technology

125 For this analy sis, EPA assumed that th e last year of technology installation for all regulated facilities under any of the regulatory options

— i.e., 2030

—is also the first year of steady - state compliance with regulatory requirements .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 374 of 567 replacement costs (such as pumps and fill material) as part of ongoing operations and maintenance expenses. For new unit s at existing electric generators, EPA calculate d an average annual amount of new capacity to be constructed during the 46 - year social cost analysis period, beginning in 2014 . While EPA does not expect the annual construction of new units to be constant, predicting the year - to - ye ar fluctuatio ns would be resource intensive. O n average, EPA assumes that its estimate of new unit costs is reasonable. EPA accounted for compliance costs for these units on an as - incurred basis, as done for existing facilities. Similar to compliance costs for facilities subject to the final rule, EPA analyzed costs incurred b y State and F ederal governments for administering the regulati on on a year explicit basis over the 46 - ye ar social cost analy sis period. Exhibit IX - 4 presents social cost s for existing units at existing facilities under the final rule and other options considered, calculated using 3 percent and 7 percent discount rates. At the 3 percent discount rate, EPA estimates total annualized social costs of $ 272 million for the existing unit provision of today ’s rule, $ 252 million for Proposal Option 4, and $ 3, 643 million for Proposal Option 2. At the 7 percent discount rate, these costs are $ 295 million for today ’s rule, $ 272 million for Proposal Option 4, and $ 3, 583 million for Proposal Option 2. 126 See the EA (Chap ter 7 ) for an explanation of why the annualized

126 Because EPA was unable to identify those facilities for which entrainment control technology would be established as BTA standards on a site - specific basis, the Agency did not analyze technology costs associated with these site - specific requirements. Consequently, the cost and econ omic analyses conducted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 375 of 567 costs at the 3 percent discount rate are lower than the annualized costs at the 7 percent discount rate for the final rule and Proposal Option 4, while the inverse is the case for Proposal Option 2 (annualize d costs at the 3 percent discount rate are higher than at the 7 percent discount rate). The largest component of social cost is the cost of regulatory compliance incurred b y regulated facilities (as opposed to administrative costs estimated for States and the F ederal government) . These costs include (1) one - time technology and other initial costs of complying with the rule, (2) one - time costs of installation downtime, (3) annual fixed and variable operating and maintenance costs , including auxiliary energy requirement , (4) value of energy penalty from operation of compliance technology , and (5) permitting costs ( initial and follow - up start - up costs, initial permit costs, annual ly recurring costs associated with monitoring, and non - annuall y recurring p ermitting costs) . Co mpliance cost s estimated for electric generators account for the largest share of total compliance - related social cost and direct compliance cost under all three options. On a per - facility

basis and at the 3 percent discount rate, the annualized pre - tax compliance costs for the electric generators segment under today ’s final rule are $ 0.4

in support of today’s rule assume that under the existing unit provision of the final rule and Proposal Option 4, Electric Generators and Manufacturers install IM technology only. These analyses also assume that under Proposal Optio n 2, Electric Generators with DIF exceeding 125 mgd install only cooling towers and all other Electric G enerators install only IM technologies. Under Proposal Option 2, a small number of Manufacturers are assigned both IM and entrainment control technologi es because of engineering issues associated with maintaining separation of contact and non - contact cooling water in some manufacturing operations. Although EPA did not estimate technology costs for facilities for which entrainment technology is established as BTA on a site - specific basis, EPA did include the costs for data collection and studies that facilities will need to perform in order to provide information to Directors to make these site - specific determinations. EPA included these costs in the admini strative costs that are estimated for the final rule and other options considered.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 376 of 567 million, $ 0.4 million under Proposal Option 4, and $ 6 million und er Proposal Option 2. 127 For manufacturers, the average cost per regulated facility at the 3 percent discount rate is $ 0.1 million under the final rule and Proposal Option 4, and $0. 4 million under Proposal Option 2. 128 EPA’s anal ys i s found a similar profile of per facility costs using the 7 percent discount rate (see EA Chapter 7 for additional detail). EPA’s estimate of F ederal and State government costs for administering this rule is small in relation to the estimated direct cost of regulatory

compliance. EPA estimates $ 1 million in annual administrative costs to States and F ederal government for the final rule, using both the 3 and 7 percent discount rates . These cost values are the same for Proposal Option 4. EPA estimates $ 0.7 million in annual administrative costs to States and the F ederal government for Proposal Option 2, regardless of the discount rate used. **Exhibit IX -**  **4. Total a**  **nnualized social costs –**  **existing units at existing**  **facilities (in millions, 2011 dollars) a**  Pr oposal Option 4 Final Rule Proposal Option 2 Using 3 percent discount rate Direct Compliance Costs Electric Generators $ 202.9 $ 203.7 $3, 413 .3 Manufacturers $ 47.8 $ 67 .7 $ 229.2 Total Direct Compliance Cost $ 250 .7 $ 271.4 $ 3, 642.5 State and Federal Administrative Costs $1. 0 $1. 0 $0.7 Total Social Costs $ 251.8 $ 272.4 $ 3, 643.2 Using 7 percent discount rate Direct Compliance Cost: Electric Generators $ 219.2 $ 220.0 $3, 339.3

127 Calculated by dividing direct compliance costs for each type of facility by the total of 544 electric generators subject to today’s rule on the basis of fac ility count - based weights (see EA Appendix H). 128 Calculated using the total of 521 manufacturers subject to today’s rule on the basis of technical weights (see EA Appendix H).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 377 of 567 Pr oposal Option 4 Final Rule Proposal Option 2 Manufacturers $ 51.9 $ 74.2 $ 243.0 Total Direct Compliance Cost $ 271 . 1 $ 294.3 $3, 582 .3 State and Federal Administrative Costs $ 1 .0 $ 1 .0 $0.7 Total Social Costs $ 272 . 1 $ 295.3 $3, 583 .0 a Cost estimates exclude costs associated with baseline closure facilities. EPA also esti mated the cost for installing closed - c yc le recirculating s ys tems at new units at existing electric generators , to reflect the costs of today ’s rule. As shown in Exhibit IX - 5 , EPA estimated that the new unit provision of the final rule will result in an annualized cost of $ 2.5 million and $ 2 .0 million using 3 percent and 7 percent discount rates, respectivel y, including compliance costs to facilities and adminis trative costs to States and F ederal government. The Agency

estimated that at a 3 percent discount rate, the total social cost of the final rule, including the existing and new unit provisions, will be $ 275 million. At a 7 percent discount rate, this cost is $ 297 million. **Exhibit IX -**  **5 .**  **Annualized total social cost of the final rule –**  **existing and new units at existing facilities (in millions, 2011 dollars)**  **a ,b**  3% Discount Rate 7% Discount Rate New Units $ 2.5 $ 2 .0 Existing Units $ 272.4 $ 295.3 Existing and New Units $ 274.9 $ 297.3 a Cost estimates exclude costs associated with baseline closure facilities. b Values may not add due to rounding. **D. Economic**  **Im pact**  **s** EPA used several anal ytic approaches to assess the economic impact of today ’s rule and the other options considered, on electric generators and manufacturers. EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 378 of 567 conducted separate anal yses for electric generators and manufacturers using different methodologies for each regulated facilities segment. The following sections summarize the method ologies EPA used to conduct the economic impact anal ys es and the findings of these analy ses . EPA conducted the economic impact anal ys es discussed in this section for existing facilities; the Agency used compliance cost estimates from the EPA engineering anal ys is (see TDD S ection X .B). 1 . Electric Generators For the electric generators segment, EPA assessed the economic impact of the existing unit provision of the final rule and other options it considered in three way s: (1) the financial burden associated with a particular regulatory option on facilities and entities that own them , (2) how potential changes in the price of electricity would a ffect electricity consumers , in general, and residential households, in particular , and (3) broader economic impacts on the electricity market , taking into account the interconnectedness of regional and national electricity markets. In preparing the first two sets of anal ys es, EPA developed and used sample weights to extrapolate impacts assessed initial ly at the level of sample of facilities , to the full popu lation of facilities subject to the final rule. F or information on how EPA developed and used sample weights, s ee the EA, Appendix H . In addition, EPA asse ssed the impact of the new unit provision of the final rule on decisions of existing facilities to construct stand - alone new units that would be subject to the new unit provision. EPA made this assessment in two way s: (1) on the basis of comparison , on a per MW basis, of compliance cos ts for new units to the overall cost of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 379 of 567 building and operating generating units and (2) as is the case with the existing unit provision, in the context of regional and national electricity market s , taking into account the ir interconnectedness. a . Cost - to - R evenue Anal ys is for Regulated Facilities and Their Parent Entities

– Existing Unit Provision of the Final Rule EPA assessed the cost to regulated facilities and their parent entities on the basis of a cost - to - revenue analy s i s. For each analy sis level (facility and parent entity) , the Agency assumed, for analy

tic convenience and as a worst - case scenario, that none of the compliance costs would be passed on to consumers through electricity rate increases and , in stead, would be absorbed by regulated facil ities and their parent entities. 129 EPA developed this anal ys is for 544 electric generators. 130 i . Cost - to - Revenue Anal ys is for Regulated Facilities To provide insight into the potential significance of the compliance costs to regulated facilities, EPA calcul ated the ratio of annualized after - tax compliance costs to baseline annual facility- level revenues. In the cost - to - revenue comparisons, EPA used

129 As discussed in EA Chapter 2 A : Industry Profiles, the majority of re gulated electric generators operate in S tates with regulated electricity markets. EPA estimates that facilities located in these States may be able to recover compliance cost - based increases in their production costs through increased electricity prices. T his depends on the business operation model of the facility ow ner(s), the ownership and operating structure of the facility itself, and the role of market mechanisms used to sell electricity. In contrast, in States where electric power generation has been deregulated, cost recovery is less certain. While facilities operating within deregulated electricity markets may be able to recover some of their additional production costs through increased revenue, EPA cannot determine the extent of cost recovery abili ty for each facility. 130 EPA calculated this number as a weighted estimate using facility count - based weights. This number excludes facilities assumed either to have already retired their steam operations or expected to do so in the future.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 380 of 567 cost - to - revenue thresholds of 1 and 3 percent to categorize facilities according the potential economic impact of the rule . EPA concludes that facilities incurring costs below 1 percent of revenue will not face significant economic impacts, while facilities with costs of at least 1 percent but less than 3 percent of revenue have a chance of facing economic impacts , and f

acilities incurring costs of at least 3 percent of revenue have a higher probability

of significant economic impacts. F or a more detailed discussion of the methodology EPA used for the facility- level cost - to - revenue analy sis , s ee EA Chapt er 4. Exhibit IX - 6 presents a summary of the facility- level cost - to - revenue anal ysis results for the final rule and other options considered . EPA estimates that overall, under the final rule, 86 p ercent of regulated facilities will incur compliance costs of less than 1 percent of revenue. Under Proposal Option 4, 87 percent of regulated facilities would also incur costs of less than 1 percent of revenue. EPA estimates that Proposal Option 2 would result in 42 percent of facilities incurring costs exce eding 1 percent of revenue, and 43 percent incurring costs exceeding 3 percent of revenue.

**Exhibit IX -**  **6 .**  **Facility -**  **level cost -**  **to -**  **revenue analysis results for the final rule and options considered a** 

**Option Number of facilities with cost** **- to**  **- revenue ratio** 

**< 1%**  **≥ 1% and < 3%**  **≥ 3%**  **# %**  **# %**  **# %**  Proposal Option 4 475 87.4 % 35 6.5 % 31 5.7 % Final Rule 470 86.5 % 40 7.4 % 31 5.7 % Proposal Option 2 228 41.9 % 79 14. 5 % 235 43 . 2 % a Facility counts exclude baseline closures. b EIA reports no revenue for 1 facility (2 on a weighted basis). Therefore, EPA conducted this analysis for 339 facilities (542 on a weighted basis). For more information on facility sample weights see EA Appendix H.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 381 of 567 ii . Cost - to - Revenue Anal ys is for Regulated Parent Entities EPA also assessed the economic impact using the cost - to - revenue metric at the level of the parent entity . This analy sis, which focuses on domestic parent entities with the largest ownership share in the facility , prov ides insight on the impact of compliance requirements on those entities that own more than one regulated facility . The anal ys is helps to answer the question of whether owning multiple facilities that are required to comply with today ’s rule causes financial stress at the entity level. For each identified parent entity, EPA aggregated facility- level , annualized , after - tax compliance costs to the level of the parent entity

and compared these entity- level costs to entity- level revenue. Similarly to the facility- level anal ys is, EPA used cost - to - revenue thresholds of 1 and 3 percent to categorize facilities according the potential economic impact of the rule . EPA used two weighting approaches for this analysis: (1) facility- level wei ghts, but without entity- level weights and (2) entity- level weights, but without facility- level weights. These approaches, which are described in Appendix H of the EA, provide a range of estimates for the number of entities incurring compliance costs and the costs incurred b y any entity that owns a regulated facility. ( F or a more detailed discussion of the methodology

used for the entity- level cost - to - revenue anal ys is , s ee EA Chapter 4). Exhibit IX - 7 presents results for the entity- level analy sis for the two weighting approaches . EPA estimates that between 123 and 159 entities own regulated facilities. Further, the Agency estimates that between 91 and 94 percent of parent entities will incur annualized costs of less than 1 percent of revenues under the final rule . This finding also holds under the two other options EPA considered, with between 91 and 94 percent of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 382 of 567 entities incurring costs of less than 1 percent of revenue under Proposal Option 4 and between 70 and 78 percent under Proposal Option 2 . **Exhibit IX -**  **7 .**  **Entity -**  **level cost -**  **to -**  **revenue analysis results**  **b Parent entity type**  **Total number of**  **entities Number of entities with cost** **- to**  **- revenue ratio of** 

**< 1% ≥**  **1% and < 3% ≥**  **3% Unknown**  a **# %**  **# %**  **# %**  **# %**  **Using Facility -**  **Level Weights** Proposal Option 4 123 112 91.1 % 3 2. 4 % 0 0. 0 % 8 6. 5 % Final Rule 123 112 91.1 % 3 2. 4 % 0 0. 0 % 8 6. 5 % Proposal Option 2 123 86 69.9 % 17 13.8 % 12 9 .8% 8 6. 5 % **Using Entity -**  **Level Weights** Proposal Option 4 159 150 94.2 % 0 0.0 % 0 0.0% 9 5. 8 % Final Rule 159 150 94.2 % 0 0.0 % 0 0.0% 9 5. 8 % Proposal Option 2 159 124 78.1 % 18 11.6 % 7 4.4 % 9 5. 8 % a EPA was unable to determine revenues for 8 parent entities ( 9 weighted). b This analysis assumes no cost pass - through to electricity consumers. b . Potential Electricity Price Effects

– Existing Unit Provision of the Final Rule As an additional measure of economic impact, EPA conducted two assess ments of the potential price effects on electricity of today ’s rule: (1) the annual increase in electricity costs per MWh (megawatt ho ur) of total electricity sales and (2) the potential annual increase in household electricity costs. F or anal ytic convenience and as a worst case scenario, these assessments assume that all compliance costs will be passed through on a pre - tax basis to consumers as increased electricity prices . This full cost pass - through assumption represents a “worst - case” impact scenario from the perspective of electricity consumers. Facilities th at are merchant providers can pass along costs onl y to the degree*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 383 of 567 that they are competitive with other generators in the dispatch process. 131 This assumption is the opposite of EPA’s assumption in the facility- and entity- level anal ys es discussed above

—that facilities will pass none of the compliance costs through to consumers in electricity

rate increases. If facilities are able to pass through all costs, the impacts in the previous subsection would not occur. The two conditions (no cost pass through an d full cost pass - through) could not occur at the same time . Thus, the results of the electricity price - effects analy ses discussed in this section, and of the facility- and entity- level anal ys es discussed in Section IX .D. a .1 , should not be combined . EPA co nducted this anal ys is for 544 electric generators . i . Compliance Cost per Unit of Electricity Sales EPA assessed the potential increase in electricity rates by NERC region based on the annual cost of the regulatory options per unit of electricity sold. The Agency used two data inputs : (1) total pre - tax compliance cost by NERC region, and (2) estimated total electricity sales in the year 2020, to gauge the full effects of the rule . T o calculate the total estimated annual cost in each NERC region , the Agency summed sample - weighted , pre - tax annualized compliance costs over regulated facilities by region. EPA then calculated the approximate average price impact per unit of electricity consumption by

131 As di scus sed earlier in Section X.D.b.1, even though individual regulated facilities may not be able to recover all of their compliance costs through increased revenues, the market - level effect may still be that consumers will see higher overall electricity pri ces because of changes in the cost structure of electricity supply and resulting changes in market - clearing prices in deregulated electricity markets .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 384 of 567 dividing total compliance costs by the reported total MWh o f sales in each NERC region. ( Details of this anal ys is are presented in the EA, Chapter 4. ) As reported in Exhibit IX - 8 , under the existing unit provision of the final rule, annualized compliance costs (in cents per kWh sales) range from nearl y $0.00 in the WECC region to $ 0. 04 0 in the HI CC region. EPA reached the same f inding s for Proposal Option 4. Under Proposal Option 2, costs range from $0.00 in the WECC region to $ 0. 351 in the HI CC region. On avera ge, across the United States, the final rule and Proposal Option 4 result in a cost of $ 0. 009 per kWh , while Proposal O ption 2 results in a higher cost of $ 0. 155 per kWh .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 385 of 567 **Exhibit IX -**  **8 .**  **Compliance cost per unit of electricity sales in 2020 by regulatory option and NERC region**  **(2011 ¢/ KWh sales) a b**  **NERC Region c,d**  **Proposal Option 4 Final Rule**  **Proposal Option 2** ASCC 0.000 0.000 0.000 FRCC 0. 014 0. 014 0. 171 HICC 0. 040 0. 040 0. 351 MRO 0. 010 0. 010 0. 174 NPCC 0.008 0.008 0.126 RFC 0. 011 0. 011 0. 200 SERC 0. 01 3 0. 01 3 0. 2 19 SPP 0. 009 0. 009 0. 078 TRE 0. 008 0. 008 0. 206 WECC 0.000 0.000 0.000 United States **0. 009**  **0. 009**  **0. 155**  a This analysis assumes full pass - through of all compliance costs to electricity consumers. b Cost values exclude baseline closures. c ASCC – Alaska Systems Coordinating Council; FRCC – Florida Reliability Coordinating Council; HICC – Hawaii Coordinating Co uncil; MRO – Midwest Reliability Organization; NPCC – Northeast Power Coordinating Council; RFC – ReliabilityFirst Corporation; SERC – Southeastern Electric Reliability Council; SPP – Southwest Power Pool; TRE - Texas Reliability Entity, and WECC – Western Energy Coordinating Council. d No explicitly analyzed facilities are in the ASCC region. For more information on explicitly and implicitly analyzed regulated facilities, see EA Appendix H. ii . Cost to Households As an additional measure of the potential electricity price effects associated with the final rule , EPA estimated the potential annual increase in electricity costs per household and by

NERC region. EPA used total annualized pre - tax compliance cost per MWh of sales, as estimated for the electricity rate impact anal ys is discussed above and the quantity

of residential electricity sales per household as reported in the 2011 EIA database. To calculate the potential annual cost impact per household , EPA multipl i ed the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 386 of 567 average cost per kWh by

the average kWh per household estimated for each NERC region. ( Chapter 4 of the EA presents details of this analy sis. ) As presented in Exhibit IX - 9 , under the existing unit provision of the final rule, the average annual cost per residential household varies across NERC regions, ranging from $ 0.01 in WECC to $ 2. 8 2 in HI CC. EPA reached the same finding s for Proposal Option 4. Under Proposal Option 2, the average annual cost per residential household also varies across NERC regions, ranging from $ 0.01 in WECC to $ 31.72 in SERC . EPA estimated that o n average, for a typical U.S. household, the final rule will result in an annual cost of $ 1. 03 in higher electricity rates per household. E PA estimates that this cost would be $ 1. 03 per household under Proposal Option 4 and $ 17.2 3 per household under Proposal Option 2.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 387 of 567 **Exhibit IX -**  **9. Average annual cost burden per residential household in 2020 for the final rule and options**  **considered, and by NERC region (2011 dollars)**  **a b NERC region**  **c,d Proposal Option 4**  **Final Rule Proposal Option 2**  ASCC $0.00 $0.00 $0.00 FRCC $1. 91 $1. 91 $23. 15 HICC $2. 82 $2. 82 $24. 61 MRO $ 0.99 $1. 02 $ 18.10 NPCC $0. 61 $0.62 $9. 5 2 RFC $1. 10 $1. 10 $ 20.64 SERC $ 1.9 6 $ 1.9 6 $ 31.72 SPP $ 1.30 $ 1.30 $ 10.71 TRE $ 1.15 $ 1.15 $ 30. 59 WECC $0.01 $0.01 $0.01 **United States $1.**  **03 $1.**  **03 $**  **17.2 3**  a The rate impact analysis assumes full pass - through of all compliance costs to electricity consumers. b Cost estimates exclude baseline closures. c ASCC – Alaska Systems Coordinating Council; FRCC – Florida Reliability Coordinating Council; HICC – Hawaii Coordinating Council; MRO – Midwest Reliability Organization; NPCC – Northeast Power Coordinating Council; RFC

– ReliabilityFirst Corporation; SERC – Southeastern Electric Reliability Council; SPP – Southwest Power Pool; TRE - Texas Reliability Entity, and WECC – Western Energy Coordinating Council. d No explicitly analyzed facilities are in the ASCC region. For more information on explicitly and impl icitly analyzed regulated facilities, see EA Appendix H. As noted above, this analy sis assumes that facilities will pass through to consumers all compliance costs through increased electricity rates. However, facilities and owner entities might not be able to recover all these costs through rate increases , thereb y reducing the impact of today ’s rule on electricity consumers. At the same time, EPA recognizes that e lectric g enerators that operate as regulated public utilities will generall y r ecover environmental compliance costs through rate increases to consumers. c . Barrier - to - Development Analy sis

– New Unit Provision of the Final Rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 388 of 567 EPA asse ssed the impact of the new unit provision of the final rule on decisions of existing facilities to construct stand - alone new units that w ould be subject to the new unit provision. As discussed earlier in this preamble, under this provision, electric power generating units that meet the definition of a new unit will be required to achieve intake flow commensurate with closed - cycle cooling. Th e question of potential impact of this provision on the construction of new stand - alone units is important because new stand alone units will general ly operate with higher energy efficiency

and lower environmental impact than older electric generating capacity , which the new units would tend to displace as a source of electric power generation. As such, EPA sought to ensure that the new unit provision would not impede construction of stand - alone new units . For this anal ys is, EPA compared the compliance costs for new units to the overall cost of building and operating generating units, on a per MW basis. The purpose of this anal ys is is to determine wheth er the required addition of a closed - cycle recirculating sy stem (CCRS) as part of a new unit would substantially increase the cost for the new stand - alone unit, and adversel y affect the decision to construct the new stand - alone unit. This analy sis showed that given the low cost of CCRS in relation to the cost of new capacity , the CCRS requirement will not pose a barrier to development of new stand alone units. EPA also assessed the cos ts associated with the new unit provision of the final rule as part o f it s electricity market anal ys i s, as discussed in the following section (Section IX.D). This analy sis tests the impact of the new unit requirements on electricity markets accounting for the expected number and timing of new unit installations, and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 389 of 567 provides ad ditional insight on whether the costs of complying with the new unit provision of the final rule would affect future capacity additions. This analy sis found no material effe ct of the final rule’s new unit provision on the number and type of new units that would be constructed. This finding also supports EPA’s conclusion that the new unit provision will not be a barrier to development of new capacity. d . Impacts in the Context of Electricity Markets

– Existing and New Unit Provisions of the Final Rule In the anal ys es for the previous 316(b) regulations, including the proposed rule, EPA used the Integrated Planning Model (IPM®) , 132 a comprehensive electricity market optimization model , to assess the economic impact of regulatory options within the context of regional and national electricity markets. To assess facility and market - level effects of the final rule, EPA used an updated version of this same anal ytic sy stem, the Integrated Planning Model Version 4.10 MATS (IPM V4.10_MATS) platform. Use of a comprehensive, market anal ys is sy stem is important in assessing the potential impact of the final rule because of the interdependence of electricity generating units in supplying power to the electric transmission grid. Increases in electricity production costs and potential reductions in electricity output at regulated facilities

– due to the temporary

shutdown of existing electric generating units during technology

132 Developed by ICF, Inc.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 390 of 567 installation

– can have a range of broader market impacts that extend beyond the effect on regulated facili ties and their direct customers. In addition, the impact of compliance requirements on regulated facilities may be seen differentl y when the analysis considers the impact on those facilities in the context of the broader electricity marke t instead of looking at the impact on a stand - alone, single - facility basis. The IPM V4.10_MATS platform provides outputs for the NERC regions that lie within the continental United States. This IPM platform does not anal yz e electric power operations in Alaska and Hawaii because these operations are not connected to the continental U.S. power grid. The IPM V4.10_MATS platform is based on an inventory of U.S. utility- and non - utility- owned boilers and generators that provide power to the integrated electric transmiss ion grid, as recorded in the EIA 860 (2006) and EIA 767 (2005) databases. 136 IP M does not include electric power facilities that do not provide power to the U.S. power grid (e.g., some generating units at industrial facilities). The IPM V4.10_MATS universe consists of 14,920 generating units at 4,910 existing electric power facilities, including 520 of the 544 regulated electric power facilities subject to the final rule. 137

136 In some instances, facili ty information has been updated to reflect known material changes in a facility ’s generating capacity since 2006. 137 Facilities excluded from the IPM analysis include three facilities in Hawaii and one facility in Alaska (i.e., areas that are outside the ge ographic scope of the model), four on - site facilities that are not connected to the integrated electric transmission grid, four facilities excluded from the IPM baseline as the result of custom adjustments made by ICF, and 12 facilities that did not respond to the 316(b) survey .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 391 of 567 This IPM V4.10_MATS platform embeds a baseline energy demand forecast from the Department of Energy ’s Annual Energy Outlook 2010 (AEO2010), with adjustments by

EPA to account for the effect of certain voluntary energy efficiency programs. This platform also incorporates in its analy tic baseline the expected compliance response to exi sting regulatory requirements for the following promulgated air regulations affecting the power sector: the final Mercury and Air Toxics Standards (MATS) rule; the final Cross - State Air Pollution Rule (CSAPR); 138 regulatory SO2 emission rates arising from S tate Implementation Plans (SIP); Title IV of the Clean Air Act Amendments; NOx SIP Call trading program; Clean Air Act Reasonable Available Control Technology

requirements and Title IV unit specific rate limits for NOx; the Regional Greenhouse Gas Initiati ve; Renewable Portfolio Standards; New Source Review Settlements; and several state - level regulations affecting emissions of SO2, NOx, and mercury

that are already

in place or expected to come into force by 2017. In contrast to the screening - level anal ys es described earlier, which are static anal ys es and do not account for interdependence of electric generating units in supplying

138 EPA’s Cross - State Air Pollution Rule (CSAPR) was promulgated to replace EPA’s Clean Air Interstate Rule (CAIR) , which had been remanded to EPA in 2008. However, on December 30, 2011, the U.S. Court of Appeals for the D.C. Circuit stayed CSAPR pending judicial review and left CAIR in place. On August 21, 2012 the Court issued an opinion vacating CSAPR and again leaving CAIR in place pending development of a valid replacement . On March 29, 2013, the United States filed a petition asking the Supreme Court to review the D.C. Circuit’s opinion. Nevertheless, as explained above, CAIR remains in effect at this time. In light of the continuing uncertainty on CAIR and CSAPR, EPA determined it would not be appropriate or possible at this time to adjust emission projections on the basis of speculative alternative emission reduction requirements in 2020 . EPA expects that the decision vacating CSAPR and leaving CAIR in place has minimal effect on the results of the analysis conducted in support of the final rule .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 3 92 of 567 power to the electric transmission grid, IPM accounts for potential changes in the generation profile of individual electric power facilities and consequent changes in market - level generation costs, as a result of the final rule. The model is dyn amic in that the anal ys is covers a multiple - decade period with information and decisions in any specific period depending on the anal ys is i nformation and optimization results for the entire anal ys is period. The model is also forward - looking in that it uses forecasts of future conditions to make decisions for the present. Finally, in contrast to the screening level anal ys es in which EPA assume d either no pass through of compliance costs (facility and entity cost - to - revenue anal ys es discussed in Section IX.D.a.1) or full cost pass through (anal ys is of potential electricity price effects , Section IX.D.b.1), IP M assesses price and revenue effects from increased costs in competitive wholesale electricity markets, where some recovery of compliance costs through increased electricity prices is possible but not guaranteed. In performing anal ys es based on the IPM V4.10_MATS platform, EPA used as its baseline a projection of electricity markets and facility

operations without the final rule requirements (baseline case). As discussed above, this baseline accounts for compliance with the recentl y promulgated F ederal air rules. EPA then overlaid this base line with the estimated compliance costs and other operating effects

– downtime for installation of IM technologies at existing units and auxiliary energy requirement to operate cooling towers at new units

– for regulated facilities under the policy case. As discussed in Appendix P of the EA report, the IPM V4.10_MATS platform models the electric power market over the 43 - ye ar period from 2012 to 2054. Within this*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 393 of 567 total analy sis period, EPA looked at shorter IPM anal ys is periods (run - year windows) 139 to asses s the effect of the final rule on national and regional electricity markets. Specificall y, to assess the impact of the final rule during the period when regulated facilities temporaril y suspend their operation to install compliance technologies

– the short - term effects anal ys is or the downtime effects anal ys is

– EPA used results reported for the 2020 IPM run ye ar, which represent an 8 - year window of 2017 through 2024. 140 The incurrence of downtime may lead to higher electricity generation costs overall, as g enerating units at regulated facilities are taken out of service to complete technology installation and other generating units , presumabl y with higher production costs, are dispatched to meet electricity demand. Because of the potential resulting increase in electricity generation costs, it is important to examine market - level effects during the period in which downtime would occur. To assess the longer term effect of the final rule on electricity markets during the period after compliance technology is in stalled at all regulated facilities

– the steady- state post - compliance period

– EPA anal yz ed results reported for the IP M 2030 run year,

139 Due to the highly data - and calculation - intensive computational procedures required for the IPM dynamic optimization algorithm, IPM is run only for a limit ed number of years. Run years are selected based on analytical requirements and the necessity to maintain a balanced choice of run years throughout the modeled time horizon. Each run year represent s adjacent years in addition to the run year itself. 140 As d iscussed earlier in this document, for the cost and economic impact analyses, EPA assumed that e lectric g enerators will install IM technologies during the 5 - year window of 2018 through 2022. Because this technology - installation window falls within the time period captured by the 2020 run year (i.e., 2017 through 2024) , EPA judges that 2020 is an appropriate year to capture the effects of technology - installation dow ntime.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 394 of 567 which represents a 10 - ye ar window of 2025 through 2034. 141 Effects that may occur during this steady- state period inclu de increased electricity production costs at regulated facilities and potential permanent losses in generating capacity from earl y retirement (closure) of generating units. Both effects may lead to higher overall electricity generation costs through not on ly the increased production cost in regulated facilities, but also through dispatch of higher production cost units to offset capacity losses , reflecting the general upward shift in production costs. 142 EPA measured the impacts of the final rule as the difference between key economic and operational impact metrics between the baseline case and the policy case. All analy sis results presented below are representative of modeled market conditions in the years 2017 - 2034. While costs are in 2011 dollars, they are reflective of costs in the modeled years and are not discounted to the start of EPA’s anal ys is period of 2013. 143 In

141 EPA expects this steady - state period to begin in the last year of the technology - inst allation window , i.e., 2022, and continue into the future. The 2022 analysis year is captured in the IPM 2020 run year, as opposed to the 2030 run year. However, because all analysis years represented by the 2030 run year (i.e., 2025 - 2034) fall outside the technology - installation window of 2018 through 2022, EPA judges that 2030 is an appropriate year to capture longer term, steady - state effects of the final rule. 142 I n seeking to minimize the cost of meeting electricity demand, IPM will tend to shift production away from regulated facilities that incur com pliance costs , and will shift production to either non - regulated facilities , which incur no compliance costs, or to regulated facilities that incur relatively lower compliance costs. Any of these changes

– whether a simple increase in production costs for previously dispatched units or changes in the profile of generating unit dispatch

– mean increased total costs for electricity generation, compared to the pre - regulation baseline. 143 In contrast, the social cost estimated in Section IX.C reflects the discounted value of compliance costs over the entire 51 - year analysis period, as of 201 3 . Additionally, screening - level analyses presented in earlier sections are static analyses and do not account for interdependence of electric generating units in supplying power to the electric transmission grid. In contrast, IPM accounts for potential changes in the generation profile of steam electric and other units and consequent changes in market - level generation costs, as the electric power market responds to higher generation costs for steam electric units due to the final rule .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 395 of 567 contrast to the earlier statement that the cost and economic impact anal ys is findings presented in this preamble may be underestimates becaus e EPA assumed that no facilities with impoundments will install compliance technology , the market - based analy sis presented in this section reflects the opposite assumption. Namely , despite the final rule ’ s treatment of impoundments, for purposes of this an aly sis, none of the facilities with impoundments are treated as having closed - c ycle cooling in the baseline. As a result, to the extent that some of these facilities may qualify as having closed - c ycle recirculating sy stems in the baseline, and thus would not need to install compliance technology , the costs and economic impacts reported in this section may be overestimate d . i. Analy sis Results for the Year 2030

– To Reflect Steady State, Post - Compliance Operations For the steady- state analy sis (2030), EPA considered impact metrics of interest at three levels of aggregation: (1) impact on national and regional electricity markets, (2) impact on the group of 520 regulated facilities modeled in IPM, and (3) impact on individual 520 regulated facilities. Impact on National and Regional Electricity Markets For the assessment of market - level impacts, EPA considered six output metrics: (1) incremental capacity retirements (closures); (2) changes in capacity retirements as a percent of total baseline capacity (3) ch anges in new capacity additions; (4) changes in variable production costs per MWh, calculated as the sum of total fuel and variable O&M*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 396 of 567 costs divided by

net generation; (5) changes in total generation costs (fuel, variable O&M, fixed O&M, and capital); and (6) changes in wholesale electricity prices. As shown in Exhibit IX - 10 , the final rule has small effects on the electricity market, on both the national and regional sub - market basis, in 2030. At the national level, the anal ys is shows a total net increase in retired capacity of approximately

1 GW, or less than 0.1 percent of the total baseline capacity in 2030 (capacity retirements are discussed in greater detail in the next section , Impact on Regulated Facilities as a Group) . Th is 1 GW of net capacity

loss reflects a combination of closures and avoided closures of generating units. “ Avoided closure” means a generating unit that was projected to close in the baseline case but remains open in the policy case because of changes in the relative operating economics of generating capacity . In some instances an avoided closure can result in an avoided full facility closure. Overall, the final rule will lead to earl y retirement of approximately 4 GW of generating capacity and approximately 3 GW of avoid ed closure of capacity otherwise projected to retire b y 2030 , resulting in a net closure of approximately 1 GW of generating capacity . W ith only one exception, these retirements involve older, less efficient generating units with very low capacity

utilization rates. Five of the eight anal yz ed NERC regions record modest increases in retired capacity , with the largest increase, 0.8 percent of baseline retired capacity, projected to occur in TRE. One NERC region

– SPP

– avoids capacity closures, where 1.5 percent of capacity otherwise projected to retire in the baseline, becomes a more economically viable source of electricity in the policy case due to changes in the relative economics of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 397 of 567 electricity production across the full market, and thus avoids closure. 144 Consequently, the final rule is not expected to have a material ongoing effect on capacity availability and supply

reliability

at either the national or the NERC region level. The 1 GW of retired capacity is replaced by new, more efficient, and less polluting capacity . Because the new capacity is more efficient and less costly to run than the retired capacity , it will run at a higher capacity utilization rate than the retired capacity ; less new capacity is required to meet electricity demand than the reti red capacity that it replaces. As shown in Exhibit IX - 1 1 , under the final rule, new capacity additions increase b y 1 GW at the national level; this increase represents 0.5 percent of new baseline capacity

and 0.1 percent of total baseline capacity ( see Exhibit IX - 10 ). This increase in new capacity

is mostly comprised of combined cycle capacity followed by other non - steam capacity, with coal steam capacity additions remaining zero in both the baseline case and the policy case. Consequently , this analy sis shows that the final rule is not likely to impede construction of new combined cycle and coal steam generating units. 145 As reported in Exhibit IX - 10 , overall, the final rule has only a slight impact on electricity prices. For three out of eight NERC regions, electricity prices decline slightly

144 Avoided closures may occur among facilities that in cur no compliance costs under the final rule or for which compliance costs are low relative to the costs estimated for other regulated facilities . 145 As described earlier in this preamble , under the new unit provision of the final rule, new units as defined at 125.92 include , stand - alone foss il fuel and combined cycle units. As described in Chapter 6 of the EA , the IPM analysis accounts only for compliance costs associated with new units. Further, EPA assigned these costs only to coal steam and combined cycle capacity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 398 of 567 – by no more than $0.05 per MWh ( 0.1 percent) in TRE. Electricity prices increase in the remaining five NERC regions, with the largest increase, $0.29 per MWh (0.4 percent), occurring in NPCC. These very small estimated changes in electricity prices are essentially within the analy tic “noise” of the electricity market modeling sy stem. At the national level, total generation costs increase by 0.3 percent of the baseline value

– again, a very

modest amount. Across regions, no NERC region records an increase in total costs exceeding 0.5 percent. The change in variable production costs ($/MWh)

– a specific measure of the effect of the final rule on short - run electricity generation costs

– is nearly zero with no NERC region recording a consequential change. **Exhibit IX -**  **10. Impact of the Final Rule on National and Regional Markets, at the Year 2030**  **NERC Region a**  **Total**

**Baseline Capacity**  **(GW) Net Changes in Early** 

**Retirements Changes in Variable Costs**  **Changes in Total Costs** 

**GW % of** 

**Total Baseline**  **Capacity $2011/MWh**  **% of Baseline Mill 2011$**  **% of Baseline**  FRCC 68 0 0.30% - $ 0. 03 - 0.10% $51 0.30% MRO 76 0 0.00% $ 0. 01 0.10% $62 0.40% NPCC 73 0 0.50% $0.00 0. 00 % $ 28 0.20% RFC 237 0 0.10% $0.01 0.00% $157 0.30% SERC 274 0 0.10% $ 0. 02 0.10% $182 0.30% SPP 59 - 1 - 1 .50 % $0.02 0.10% $31 0.30% TRE 98 1 0.80% - $0.01 0.00% $48 0.30% WECC 220 0 0.00% $0.00 0.00% $9 0.00% **Total 1,106**  **1 0.10%**  **$0.00 0.00%**  **$568 0.30%** *** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 399 of 567 **a** FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and WECC (Western Electric ity Coordinating Council)

**Exhibit IX -**  **11. Impact of the**  **Final Rule on New Capacity (GW), at the Year 2030** 

**Capacity Type Base** 

**line Valu**  **e Final Rule** 

**Value Difference**  **% Cha**  **nge** Coal Stea m 0 0 0 NA Combined Cycle 7

5 76 1 0.8% Combustion Turbine 6 6 0 0

. 0 % Hydro 0 0 0 NA Nuclear 0 0 0 NA O/G Steam 0 0 0 NA Other Non Steam a 2

5 25 0 0

. 1 % Other Steam b 9 9 0 0.0% **Total 1** 

**1 4**  **1 1**  **5 1**  **0.5%**

a Other non - steam capacity includes wind, so lar, pumped storage, and fuel cell. b Other steam capacity includes biomass, geothermal, municipal solid waste, fossil waste, landfill gas, tires, and non - fossil waste.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 400 of 567 Impact on Regulated Facilities as a Group EPA used the same IPM V4.10_MATS anal ys is results for 2030 as those used to assess market - level impacts described above; however, this anal ys is considers the effect of the final rule onl y on regulated facilities modeled in IPM (i.e., 520 facilities). For this anal ys is , EPA considered four output metrics: (1) incremental capacity closures; (2) changes in capacity closures as a percent of total baseline capacity; (3) changes in total generation; and (4) changes in variable production costs per MWh. As shown i n Exhibit IX - 12 , for the group of regulated facilities, the impact of the final rule is overall slightly greater than that observed over all generating units in the IPM universe (i.e., market - level anal ys is discussed in the preceding section). This difference is due to the fact that in the electricity market as a whole, impacts on regulated facilities, which become less competitive compared to facilities that do not incur compliance costs, are offset b y changes in capacity and energy production at the other electric power facilities. Nevertheless, the impact on the group of regulated facilities remains small. For instance, while there is essentially no change in total available capacity for the overall electricity market at the national level, for the group of regulated facilities, total available capacity falls by onl y 0.4 percent (2 GW). At the regional level, five NERC regions incur loss in total capacity , with the largest percentage loss of 2.8 percent and the largest absolute loss of 0.9 GW occurring in the NPCC region. The 2 GW of capacity loss at regulated facilities reflects a combination of closures and avoided closures of generating units in the universe of regulated facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 401 of 567 Some unit closures result in full facility closures (i.e., all generati ng units at a facility close), while others result in only partial facility

closures (i.e., some, but not all, generating units at a facility close). For avoided closures, a generating unit projected to close in the baseline case but remains open under the policy case, in some instances resulting in an avoided full facility closure. Overall, 22 generating units close (4 GW) and 12 generating units avoid closure (2 GW) in the policy case, resulting in net closure of 10 generating units (approximately 2 GW) i n Electricity

Market Anal ys is - Final Rule anal ys is. The 22 generating unit closures reflect retirement of nine units at six full - closure facilities (2 GW) and retirement of 13 units at six partial - closure facilities (2 GW). W ith only one exception, these retirements involve older, less efficient generating units with very low capacity utilization rates. At the national level, for the group of regulated facilities, total generation at regulated facili ties declines by less than 2 GWh or approximately 0.1 per cent of baseline generation in these facilities. The MRO and SERC regions record slight increases in generation essentially

amounting to zero percent of baseline generation at regulated facilities in these regions, with the remaining five NERC regions reco rding a reduction in electricity generation of no more than 0.4 percent in FRCC. Over all regulated facilities, there is essentially no change in variable production costs ($/MWh) at the national level, while at the NERC region level, the change does not e xceed 0.2 percent for any of the regions. These findings of very small effects confirm EPA’s assessment that the assessed capacity closures among regulated facilities are of little economic consequence at both the national and regional levels.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 402 of 567 **Exhibit IX -**  **1 2**  **. Impact of Electricity Market Analysis Options on the Group of Regulated Facilities, at the Year 2030** 

**NERC Region**  **a Baseline** 

**Capacity (MW)**  **Net Change in Early** 

**Retirements / Closures Change in Generation**  **Change in Variable Production Cost**  **Capacity (MW)**  **% of**

**Baseline GWh**  **% of Baseline**  **$2011/MWh % of**  **Baseline** FRCC 30,794 203 0.7% - 527 - 0.4% - $0.08 - 0.2% MRO 31,747 0 0.0% 30 0.0% $0.01 0.1% NPCC 30,977 855 2.8% - 25 0.0% $0.00 0.0% RFC 126,905 223 0.2% - 619 - 0.1% $0.00 0.0% SERC 142,840 476 0.3% 3 0.0% $0.02 0.1% SPP 24,487 - 530 - 2.2% - 411 - 0.3% $0.01 0.0% TRE 38,378 808 2.1% - 163 - 0.1% - $0.02 - 0.1% WECC 34,788 0 0.0% - 8 0.0% $0.00 0.0% **Total 460,917**  **2,035 0.4%**  **- 1,721**  **- 0.1%**  **$0.00 0.0%**  a FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and WECC (Western Electricity Coordinating Council) Impact on Individual Regulated Facilities Results for the group of 520 regulated facilities as a whole may mask shifts in economic performance among individual facilities incurring compliance costs under the final rule. To assess potential facility- level effects, EPA anal yz ed facility- specific changes between the baseline case and the final rule for the following metrics: (1) capacity utilization (defined as annual generation (in MWh) divided by [capacity (MW) times 8,760 hours]) (2) electricity generation, and (3) variable production costs per MWh . Exhibit XI - 13 presents the estimated number of regulated facilities with specific degrees of change in operations and financial performance. Under the final rule, this anal ys is shows that most facilities experience onl y slight effects

– i.e., no change o r less*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 403 of 567 than a 1 percent reduction or 1 percent increase. Only six facilities are estimated to incur a reduction in capacity utilization and 13 facilities a reduction in generation of at least 1 percent, with onl y five facilities estimated to incur an incre ase in variable production costs per MWh of at least 1 percent. These facilities represent approximately 1 percent of 520 regulated facilities analyzed in IPM. **Exhibit IX -**  **1 3**  **. Impact of the Electricity Market Analysis**  **- Final Rule on Individual Regulated**  **Fa cilities at the Year 2030 (Number of Regulated Facilities With Indicated Effect)** 

**Economic Measures Reduction**  **No Change**  **Increase N/A**  **b,c**  **3%**  **1and**

**<3% <1%**  **<1%**  **1and <3%**   **3%** Change in Capacity Utilization a 1 5 45 340 35 2 0 92 Change in Generation 9 4 37 345 29 2 2 92 Change in Variable Production Costs/MWh 2 1 70 86 242 4 1 114 a The change in capacity utilization is the difference between the capacity utilization percentages in the baseline and policy cases. For all other measures, the change is expressed as the percentage change between the baseline and post - compliance values. b Facilities with status changes in either the baseline case or the policy case were excluded from these calculations. Specifically, there are 17 full baseline facility closures, 59 partial baseline facility closures, four avoided partial facility closures, six partial policy facility closures, and six partial policy facility closures. c The change in variable production cost per MWh could not be developed for 22 facilities with zero generation in either the baseline case or the policy case. i i . Analy sis Results for 2020

– To Capture the Effect of Technology- Installation Downtime This section presents market - level results for the final rule for the 2020 IP M run ye ar, which represents 2017 through 2024. As discussed above, this IPM run year captures the period when regulated facilities are expected to install compliance technologies under the final rule. Of particular importance as a potential impact, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 404 of 567 additional downtime from installation of compliance technologies could manifest as increased electricity production costs resulting from the dispatch of higher - production cost generating units during the period when units are taken offline to install compliance technologies. Because these effects are of most concern in terms of potential impact on national and regional electricity markets, this section presents results only for the overall electricity market and does not present results for the subset of regulated facilities. As shown in Exhibit IX - 14 , the estimated effects of technology- installation downtime under the final rule are small. At the national level, total production costs increase b y 0.4 percent. At the regional level, these costs increase in all NERC regions, with MRO and SPP recording the largest increase of 0.6 percent. At the national level, variable production costs ($/MWh) increase b y approximately

0.2 percent. While the effect on variable production costs varies across NERC regions, this effect is small overall, with the largest increase of less than 0.4 percent occurring in FRCC. While ele ctricity prices increase in all NERC regions, the magnitude of that increase is generally small, ranging from $0.15 per MWh (0.3 percent) in MRO and WECC to $0.56 per MWh (0.9 percent) in FRCC. **Exhibit IX -**  **1 4**  **. Short**  **- Term Effect of Technology Installation Downtime on National Electricity**  **Market Under the Final Rule –**  **2020**

**NERC Region**  **a Change in** 

**Generation Change in Variable** 

**Production Cost Change in Total Costs**  **Change in Electricity Price**  **2011$/ MWh**  **% of**

**Baseline 2011$/** 

**MWh % of** 

**Baseline Million** 

**2011$ % of** 

**Baseline 2011$/** 

**MWh % of** 

**Baseline** FRCC - 108 0.0% $0.13 0.4% $51 0.5% $0.56 0.9% MRO 52 0.0% $0.03 0.2% $64 0.6% $0.15 0.3% NPCC - 88 0.0% $0.05 0.2% $31 0.3% $0.18 0.3%*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 405 of 567 **Exhibit IX -**  **1 4**  **. Short**  **- Term Effect of Technology Installation Downtime on National Electricity**  **Market Under the Final Rule –**  **2020**

**NERC Region**  **a Change in** 

**Generation Change in Variable** 

**Production Cost Change in Total Costs**  **Change in Electricity Price**  **2011$/ MWh**  **% of**

**Baseline 2011$/** 

**MWh % of** 

**Baseline Million** 

**2011$ % of** 

**Baseline 2011$/** 

**MWh % of** 

**Baseline** RFC 447 0.0% $0.03 0.1% $164 0.4% $0.19 0.4% SERC - 369 0.0% $0.04 0.1% $185 0.4% $0.27 0.6% SPP - 53 0.0% $0.08 0.3% $56 0.6% $0.18 0.4% TRE 0 0.0% $0.08 0.3% $64 0.5% $0.21 0.4% WECC 33 0.0% $0.04 0.2% $39 0.1% $0.15 0.3% **Total -**  **88 0.0%**  **$0.05 0.2%**  **$652 0.4%**  **N/A** a FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordination Council), RFC (ReliabilityFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Reliability Entity), and WECC (Western Electricity Coordinating Council) EPA recognizes any capacity outages estimated to occur in conjunction with installation of compliance technologies at existing units will require outage coordination by the sy stem operator or other planning authority. Where possible, these outages would be scheduled in concurrence with normal scheduled maintenance outages . Permit authorities are provided flexibility to tailor compliance timelines. This flexibility will en sure that any adverse impact on local electric reliability as a result of this rule will be avoided. F acilities would receive workable construction schedules from permit writers that will allow schedule outages for i nstallation without adversel y affecting electric supply reliability.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 406 of 567 2 . Manufacturers This section presents EPA’s estimated economic impacts on m anufacturers for the final rule and the other options EPA considered . These analy ses assess the impact of regulatory

requirements on the financial performance of regulated facilities (facility- level anal ys is) and the entities that own them (entity- level anal ys is) . Similarly to the electric generators anal ys is, for the manufacturers facility - level and entity- le vel analy ses, the Agency assumed that facilities would pass none of their compliance costs forward to customers as price increases , i.e., all compliance costs will be absorbed by regulated facilities and their parent entities. For details on the cost - pass - through (CPT) anal ys is for information on this assumption, see the EA, Appendix K. EPA developed and used sample weights to extrapolate impacts assessed initially at the level of a sample of facilities to the full population of regulated facilities. F or in formation on the development and use of sample weights, s ee EA Appendix H . a . Facility- Level Impact Analysis for Manufacturers EPA conducted two separate facility- level analy ses for manufacturers: (1) a stand alone cost - to - revenue screener anal ys is and (2) a facility closure and financial stress short of closure test. For the cost - to revenue screener test, shown in Exhibit IX - 15 , EPA divided the after - tax, annualized compliance cost by facility- level revenue. Under the final rule, EPA found that of 500 Primary Manufacturing Industry

facilities, 496 incur costs less than one percent of revenue, four incur costs between one and three percent, and none incur costs greater than 3 percent. For the nine Other Industries facilities, EPA estimated that eight facilities would incur costs less than one percent and one would incur*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 407 of 567 costs between one and three percent of revenue. For Proposal Option 4, all Primary Manufacturing Industry

facilities ( 500 facilities) and Other Industry facilities (nine facilities) incur costs less than one percent of revenue. Under Proposal Option 2, 491 Primary Manufacturing Industry

facilities incur costs less than one percent and nine facilities incur costs between one and three percent, while seven Other Industry facilities incur costs less than one percent , one facility incurs costs between one and three percent , and one facility

incurs costs greater than three percent . **Exhibit IX -**  **15 .**  **Facility -**  **level cost**  **- to**  **- revenue**  **analysis results**

**Option Number of facilities with a cost** **- to**  **- revenue ratio of**  **a**

**<1% ≥**  **1**

**and < 3%**  **≥ 3%**  Primary manufacturing industries Proposal Option 4 500 0 0

Final Rule 496 4 0 Proposal Option 2 491 9 0 Other industries Proposal Option 4 9 0 0

Final Rule 8 1 0 Proposal Option 2 7 1 1 a. EPA conducted this analysis for 579 facilities in the Primary Manufacturing Industries and 10 facilities in the Other Industries. Note, these facility counts and analysis exclude facilities identified as baseline closures in the severe impact analysis, which is described below.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 408 of 567 For the second analy sis, EPA assessed how compliance costs would likel y affect financial performance and condition of the 509 manufacturers 147 using two measures: (1) facility closures (severe impacts) and associated losses in revenue and employ ment, and (2) financial stress sh ort of closure (moderate impacts). For the anal ys is of severe impacts, EPA identified a facility as a regulatory closure if it would have operated under baseline conditions but would not be financiall y viable under the new regulatory requirements and the costs of the final rule leading to that finding exceeded a threshold of 0.1 percent of revenue . Specifically , the Agency examined the facility ’s going - concern value before and after meeting regulatory requirements. EPA used a discounted cash flow fram ework in which after - tax cash flow is discounted at an estimated cost of capital to calculate the going concern value of the facility . 148 In conjunction with the discounted cash flow anal ys is, EPA tested whether annualized costs exceeded 0.1 percent of reven ue by dividing the after - tax, annualized total compliance cost b y facility- level revenue. If this analy sis found that the facility’s business value would become negative as a result of estimated compliance costs and the annualized cost of compliance exceed ed 0.1 percent of revenue , EPA classified the facility as a regulatory

closure.

147 This is a sample - weighted estimate of the number of manufacturers , calculated using economic weights. This number excludes 70 facilities estimated to be at substantial risk of financial failure regardless of any additional financial bu

rden that might result from the final rule or other options considered in development of this rule. For details see EA Appendix H . 148 This after - tax cash flow analysis c onducted for manufacturers is similar in concept to the cash flow analysis conducted for electric generators through the IPM analysis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 409 of 567 For facilities estimated not to close under the severe - impact test, EPA conducted a moderate - impact test to assess whether any would experience financial stress short of closure as the result of regulatory requirements (e.g., higher costs of capital borrowing) . EPA used two financial performance measures to test for occurrence of financial stress: (1) interest coverage ratio and (2) pre - tax return on assets . The Agency compared these measures before and after compliance with regulatory requirements against industryspecific performance thresholds for the two financial measures . If both measures for a facility exceeded the threshold in the baseline, and at least one measure fell below the threshold in the post - compliance case , EPA counted this as a moderate impact based on the rule . Exhibit IX - 16 presents the results from the severe - impact and moderate - impact anal ys es. EPA estimated that no facilities would be at risk of closure as a result of the fin al rule and that 12 facilities c ould experience financial stress short of closure. For Proposal Option 4, EPA also estimated no closures, while moderate impacts are significantl y lower, estimated at two facil ities. Under Proposal Option 2, EPA estimated that one facility would be at risk of closure, while the moderate impact finding is the same as for the final rule: 12 facilities. Again, this anal ys is is conducted assuming that all the costs are borne b y the facility and cannot be passed along, an assumption that is highl y unlikely to be true, as many of these facilities are in industries where there is some market power and barriers to entry . Thus, these tests present worst case scenario resul ts.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 410 of 567 **Exhibit IX -**  **16 .**  **Facility impacts and compliance costs for manufacturers**  d **Proposed Option 4 Final Rule**  **Proposed Option 2**  **c Primary manufacturing industries**  **a** Number of Facilities Operating in Baseline 500 500 500 Number of Closures (Severe Impacts) 0 0 1 Percentage of Facilities Closing 0 % 0 % 0 % Number of Facilities with Moderate Impacts 2 12 12 Percentage of Facilities with Moderate Impacts 1% 3% 3% **Other industries b**  Number of Facilities Operating in Baseline 9 9 9 Number of Closures (Severe Impacts) 0 0 0 Percentage of Facilities Closing 0% 0% 0% Number of Facilities with Moderate Impacts 0 0 0 Percentage of Facilities with Moderate Impacts 0% 0% 0% a Primary Manufacturing Industries include facilities in the Aluminum, Chemicals and Allied Products, Food and Kindred Products, Paper and Allied Products, Petroleum Refining, and Steel industries. b Other Industries include cooling water - dependent faciliti es in industries whose principal operations lie in businesses other than the electric power industry or the Primary Manufacturing Industries. c Under Proposal Option 2, the percentage of facilities closing is 0.3 percent. d The analysis assumes no cost pass through. b . Entity- Level Impact Analy sis EPA also examined the impact of regulatory requirements on entities that own regulated manufacturers facilities . An entity that owns multiple facilities could be adversel y affected because of the cumulative burden of regulatory requirements the facilities face . For this analy sis, a parent entity is the domestic parent entity with the largest ownership share in a regu lated facility . For each identified parent entity, EPA aggregated facility- level , annualized , after - tax compliance costs to the level of the parent entity and compared these entity- level costs to entity- level revenue. Similarly to electric*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 411 of 567 generators , EPA used cost - to - revenue thresholds of 1 and 3 percent as thresholds for categorizing levels of impacts . EPA considered two cases , based on two sets of entity- level . These cas es, which are described in the EA, Appendix H, provide a range of estimates for the number of entities incurring compliance costs and the costs incurred b y any entity owning a regulated facility . EPA conducted this anal ys is for 509 facilities in the primary manufacturing industries and 12 facilities in other industries. 149 F or information on the methodology

used for the entity- level cost - to - revenue analy sis , s ee the EA, Chapter 5 . Exhibit IX - 17 presents the results from the entity- level anal ys is for these two cases. EPA estimated that between 120 and 3 37 entities own 521 regulated facilities. Under the final rule, between 90 and 95 percent of all entities are estimated to incur compliance costs of less than 1 percent of revenu e . This is true also for Proposal Option 2. Under Proposal Option 4, more entities are expected to incur compliance costs of less than 1 percent of revenue (between 94 and 96 percent of all entities). **Exhibit IX -**  **17 .**  **Entity -**  **level cost**  **- to**  **- revenue**  **analysis results Option**  **Not analyzed due to**

**lack of revenue information**  **Number of entities with a cost -**  **to -**  **revenue ratio of < 1%**  **≥ 1 % and < 3%**  **≥ 3%**  **# %**  **# %**  **# %**  **# %** 

149 This is a sample - weighted estimate of the number of manufacturer facilities, calculated using te chnical weights. This number excludes 67 facilities estimated to be at substantial risk of closure regardless of any additional financial burden that might result from the regulatory options under consideration .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 412 of 567 Case 1: Lower bound estimate of number of entities that own regulated facilities; upper bound estimate of total compliance costs that an entity may incur b Proposal Option 4 5 4% 113 94% 2 2% 0 0% Final Rule 5 4% 108 90% 6 5% 1 1% Proposal Option 2 5 4% 108 90% 6 5% 1 1% Case 2: Upper bound estimate of number of entities that own regulated facilities; lower bound estimate of total compliance costs that an entity may incurc Proposal Option 4 12 4% 324 96% 1 0% a 0 0% Final Rule 12 4% 319 95% 6 2% 0 0% Proposal Option 2 12 4% 319 95% 6 2% 0 0% a. The percentage of entities with impacts greater than or equal to 1 percent and less than 3 percent is less than 0.5 percent b. The total number of entities under Case 1 is 120. c. The total number of entities under Case 2 is 337. **E .**  **Employment Effects** To study employ

ment effects of this rule , EPA considered the potential effects of the final rule , focusing on the impacts of meeting compliance requirements in the directly regulated industry

sectors : the Electric Power Industry , and selected Primary Manufacturing Industries, including Aluminum, Chemicals and Allied Products, Food and Kindred Products, Paper and Allied Products, Petroleum Refining, and Steel Manufacturing.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 413 of 56 7 When the econom y is at ful l employ ment, an environmental regulation is unlikely to have much impact on net overall U.S. emplo yment; instead, labor would primarily be shifted from one sector to another. These shifts in employ ment impose an opportunity cost on society , approximated b y the wages of the employees, as regulation diverts workers from other activities in the economy . In this situation, any effects on net employ ment are likel y to be transitory as workers change jobs (e.g., some workers may need to be retrained or require time to search for new jobs, while shortages in some sectors or regions could bid up wages to attract workers). On the other hand, if a regulation comes into effect during a period of high unemploy ment, a change in labor demand due to regulation may affec t net overall U.S. employ ment because the labor market is not in equilibrium. Schmalansee and Stavins 151 point out that net positive employ ment effects are possible in the near term when the econom y is at less than full employ ment due to the potential hiring of idle labor resources by the regulated sector to meet new requirements (e.g., to install new equipment) and new economic activity

in sectors related to the regulated sector. In the longer run, the net effect on emplo ym ent is more difficult to predict an d will depend on the way in which the related industries respond to the regulatory requirements. As Schmalansee and Stavins note, the magnitude of the effect on emplo ym ent could vary over time, region, and sector,

151 Schmalansee, Richard, and Robert N. Stavins. “A Guide to Economic and Policy Analysis of EPA’s Transport Rule.” White paper commissioned by Exelon Corporation, March 2011 (Docket EPA - HQ OAR - 2011 - 0135 - 0054) .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 414 of 567 and positive effects on employ ment in some regions or sectors could be offset by negative effect s in other regions or sectors. For this reason, they urge caution in reporting partial employ

ment effects because it can “paint an inaccurate picture of net employ ment impacts if not placed in the broad er economic context.” In that spirit, unlike the analy sis for the proposed rule, for the final rule EPA is not estimating quantitative employ ment impacts and instead, including only a qualitative discussion. T he methods used at proposal were not sufficiently robust, largely

because they rel ied on an input - output analy sis that assumed fixed production relationships and used historical data to estimate the labor and other inputs required for compliance with the rule . Since publication of the proposed rule, EP A has concluded that input - output anal ys is is inappropriate for assessing employ ment impacts of national - level regulations. Input - output models are static, do not include prices, and assume the supply of all inputs is inexhaustible. They do not model a wid e variety of adjustments that are expected to occur over time, such as changes in production processes, technology or trade patterns. 152 After reviewing the public comments EPA received on the proposed rule, the Agency concludes that the commenters have not identified any specific improvements to the employ ment anal ys is of the proposed rule . Thus, today ’s final rule EA includes a qualitative discussion highlighting the variety of potential adjustments in the labor market that may follow the rulemaking.

152 For a discussion of input - output models see Chapter 8 of the EPA Handbook on the Benefits, Costs, and Im pacts of Land Cleanup and Reuse (2011).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 415 of 567 To e laborate on the difficulty of d eriving high quality estimates of how environmental regulations will impact net employment , the task requires consideration of labor demand in both the regulated and environmental protection sectors , as well as labor supply more generally . Economic theory predicts that the net effect of an environmental regulation on labor demand in regulated sectors could be positive or negative ; the direction of the outcome depends on the magnitude of output and substitution effects, explai ned further in the EA . Peer - reviewed econometric studies that use a structural approach, applicable to overall net effects in the regulated sectors, indicate that such effects, whether positive or negative, have been small and have not affected employ ment in the national economy in a significant way (Berman and Bui 2001, Morgenstern, Pizer and Shih 2002) . Effects on labor demand in the environmental protection se ctor seem likely to be positive . In aggregate, the environmental protection sector is likely t o experience a temporary

increase in jobs created as more compliance technology sy stems are designed, manufactured, and installed attributable t o the final rule. In addition, because of regional variation in consumption patterns and the presence of regulat ed facilities and supporting industries, short - and long - run emplo ym ent effects likely will vary across the United States. It is possible that positive net employ ment effects will occur in the near term due to the hiring of idle labor resources b y the regulated sectors to plan for and meet new technology control requirements rather than diverting workers from other productive employ ment. However, it is also possible that in the long run, as the economy returns to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 416 of 567 full employ

ment, any changes in emplo ym ent i n the regulated sectors due to the final rule will be offset b y emplo yment changes in other sectors. These dyn amics compound the uncertainty in estimating employment effects for a substantial number of ye ars into the future. Even if regulated facilities are able to reduce the impact of regulatory requirements b y changing their production processes in the post - rule environment, production costs may

still be higher compared to those before the rule. As a result, regulated facili ties may

seek to increase their product prices in response to the higher production costs. For example, attempts by electric generators to recover increases in electricity generation costs, however small, are likely to result in higher electricity rates. The impact of this increase will vary by region, customer group (e.g., industrial, commercial, transportation, and residential), and by industry , depending on the electricity- use intensity. 153 Further, the extent to which electric generators are able to pass their costs to consumers through higher electricity rates, will vary by region. Specificall y, electric generators operating in regions where electricity prices remain regulated under the traditional cost - of

- service rate regulation framework may be able to recover compliance cost - based increases in increased rates. 154 However, cost recovery is less

153 See the EA Chapter 6: Electricity Market Analysis for assessment of the impacts of increased production cost s on wholesale electricity prices and Chapter 4 : Economic Impact Analys i s – Electric Generators for analyses of the impacts on retail rates by customer group. 154 However, even for electric generators operating under traditional rate regulation, the recovery of cost increases through increased rates is not certain, and will depend on additional factors such as the facility ownership structure and operating model, approval of public utility commissions, and the importance and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 417 of 567 certain for electric generators operating in States where electric power generation has been deregulated, and will depend on the competitive circumstances of specif icall y affected facilities. Overall, the long - run changes in emplo ym ent will likely depend on how the e lectric p ower i ndustry , p rimary m anufacturing i ndustries, and o ther i ndustries adjust in response to the new regulatory requirements, and on the upstream and downstream effects of those adjustments on the rest of the economy , as well as the overall state of the econom y and labor markets. The long - run emplo yment effects in the directly affected sectors will depend on a number of economic factors . These fac tors includ e changes in labor requirements to operate the infrastructure in general and compliance technology in particular at regulated facilities, the potential to change production processes to become less dependent on cooling water, availability of alt ernative technologies to meet compliance requirements, and changes in demand for the outputs of the directly affected sectors. Because these and many other interrelated factors include data and methodology limitations, it is difficult to fully assess the e mploy

ment impacts of the final rule. However, b ased on th e available evidence from several peer - reviewed econometric studies mentioned above that are applicable to net effects in the regulated sectors and that closed - cycle recirculating s ys tems was reject ed as national BTA for entrainment, EPA expects that employ

ment impacts of today ’s rule are not likely to be substantial. role of market mechanisms in dispatching production of electricity across generating units. See Chapter 2A of the EA for additional discussion.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 418 of 567 **X. Benefits Analysis**  **A. Introduction**  This section presents EPA ’ s estimates of the national environmental benefits of the final existing facilities rule and other options considered b y EPA. This section describes how EPA calculated values for those benefits it could monetize . EPA did not rely on the results of its stated preference survey in estimating the benefits of today ’s rule. It also presents descriptive information for those benefits for which EPA could not develop a monetary

value. The benefits EPA assessed occur because of reductions in impingement and entrainment at cooling water intake structures affected by the rulemaking and changes in greenhouse gas emissions at regulated facilities . Impingement occurs where fish and other aquatic life are trapped on equipment as they enter the cooling water intake structure . Entrainment occurs where aquatic organisms, including eggs and larvae , are drawn into the cooling s ys tem, passed through the heat exchanger, and discharged back into the source waterbody . Impingement and entrainment kill or injure large numbers of aquatic organisms across all life stages. On the basis of entrainment data presented in facility studies, EPA assumes a mortality rate of 100 percent for entrained individuals. Mortality is then reduced on the basis of the efficiency of technology

in place in reducing mortality rates, or b y reducing levels of i mpin gement and entrainment. 155 By reducing i mpingement mortality and entrainment,

155 See the discussion in Section III on entrainment mortality data and assumptions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 419 of 567 the final existing facilities rule is likely to increase the number of fish, shellfish, and other aquatic organisms in affected water bodies resulting in healthier aquatic environm ents . In turn, this healthier aquatic environment directly improves welfare for individuals using the affected aquatic resources, generating use benefits such as increases in the value of recreational and commercial fisheries or increases in property value s . Reductions in i mpingement mortality and entrainment also improve welfare for indi viduals without use of the affected resources, generating nonuse benefits , such as improved ecosy stem function and resource bequest values . Section D provides an overview of the ty pes and sources of benefits EPA anticipated, how EPA estimated these benefits , and the level of benefits that the final rule and other options EPA considered for the rule would achieve . EPA derived national benefit estim ates for the final rule and other options considered from a series of regional studies representing a range of waterbody ty pes and aquatic resources . Section B provides detail on the regional study design. Section C describes the impingem ent and entrainment effects and Section D presents the national benefits estimates. The methodologies used to estimate benefits are largely built on those used to estimate benefits for the remanded Phase II and Phase III and the proposed existing facilitie s rules . In addition to updating these anal yses, EPA more full y investigated the effects of i mpingement mortality and entrainment on T&E species, incorporated benefits from greenhouse gas reductions, and improved its estimation of nonuse benefits. The Bene fits Anal ys is document for the final existing facilities rule (referred to as the BA) provides detailed descriptions of the new methodologies EPA used to analyze the benefits*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 420 of 567 of regulatory

options, and provides references to ( i) Part A of the 2004 Regional Benefits Analy sis for the Final Section 316(b) Phase II Rule, and ( ii) Part A of the 2006 Regional Benefits Anal ys is Document for the Final Section 316(b) Phase III Existing Facilities Rule for anal ys es using similar methodologies. The BA provides EPA ’ s b enefit estimates for the final rule and considered options. EPA relied on information collected in the 2000 s ection 316(b) i ndustry s urvey s (the Industry

Screener Questionnaire (SQ) and the Detailed Industry Questionnaire (DQ) ) on cooling water s ys tems and intake structures already in place to estimate the number of regulated facilities under regulatory options considered for the f inal e xisting f

acilities r ule. For the anal ys is of regulated e lectric g enerators, EPA use d information from 656 regulated electric generating facilities that responded to the s ection 316(b) industry s urvey s on cooling water sy stems and intake structures already in place. Because the DQs were sent to a sample of the manuf acturing industries that use cooling water, the respondents were assigned sample weights designed to represent other facilities in other manufacturing industries that were not covered in the survey . All regulated facilities have a DIF of at least 2 mgd . EPA estimated regional benefits from the sample of facilities for which EPA has sufficient DQ information to estimate the environmental impacts of regulatory

options. The environmental impacts from the set of explicitly analyzed facilities we re then extrapolated to the universe of facilities in a region using statistical weights developed for this analy sis. National benefits are estimated as the sum of the regional benefits.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 421 of 567 As described above at Section IX, the findings presented in this section assume that all facilities with impoundments will qualify as having closed - cycle recirculating sy stems in the baseline. F or purposes of this analy sis , EPA did not estimate IM&E reductions for these facilities under the final rule and other options considered; however, these facilities remain subject to today ’s rule and are assigned administrative costs. To the extent that some of these facilities do not qualify as having closed - c ycl e cycle recirculating s ys tems in the baseline, the monetized benefits reported in this section may be underestimate d . EPA notes that the vast majority of these facilities occur in the Inland benefits region. Any underestimation in monetized benefits due to the treatment of facilities with impoundments is likely to be minor because commercial fishing benefits and nonuse benefits are not estimated for the Inland region. **B. Regional Study Design**  EPA evaluated the benefits of today ’s rule in seven study reg ions . 156 Regions were defined on the basis of ecological similarities within regions (e.g. , freshwater versus marine, similar communities of aquatic species), and on characteristics of commercial and recreational fishing activities. The seven study regions are: California , 157 North Atlantic, Mid Atlantic , South Atlantic, Gulf of Mexico, Great Lakes, and Inland. The five coastal regions EPA identified (California, North Atlantic, Mid - Atlantic, South Atlantic,

156 Benefits associated with changes in greenhouse gas emissions were estimated for the nation as whole. 157 The California region includes facilities in State of California and four facilities in Hawaii. No coastal facilities are in Oregon, and one facility in Washington is classified as a baseline closure .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 422 of 567 and Gulf of Mexico) correspond to those of the Nation al Oceanic and Atmospheric Administration’s National Marine Fisheries Service . The Great Lakes region includes Lake Ontario, Lake Erie, Lake Huron (including Lake St. Clair), Lake Michigan, Lake Superior, and the connecting channels (Saint Mary’s River, Saint Clair River, Detroit River, Niagara River, and Saint L awrence River to the Canadian border) as defined in 33 U . S . C . 1268, Sec. 118(a)(3)(b). The Inland region includes all remaining facilities that withdraw water from freshwater lakes, rivers, and reservoirs , including inland facilities in coastal states . Notabl y, of the 435 facilities that are on freshwater streams or rivers, 30 percent ( 132 ) have average actual intake flow that is greater than 5 percent of the mean annual flow of the source water s, which is a significant amount of the source water flow . During periods of low river flow, or during periods of higher than average withdrawals of cooling water, the proportionate withdrawal of source waters could be much higher. Thus, the potential for adverse environmental impacts could increase dramatically during these periods . The number and total operational intake flow of all 316(b) facilities by study region are presented in Exhibit X - 1 . **Exhibit X**  **- 1.**  **Number of surveyed**  **facilities and t otal mean op**  **erational flow ,**  **by region,** Region Number of Surveyed F acilities a Flow (billions of gallons per day) Non - Recirculating Facilities b Recirculating Facilities Total F low California c 21 10.65 0.00 10.65 Great Lakes 50 16.24 0.24 16.47 Inland d 566 107.56 18.06 125.62 Mid - Atlantic 46 24.69 0.07 24.76 Gulf of Mexico 22 10. 14 0. 05 10.18 North Atlantic 21 5.93 0.00 5.93 South Atlantic 12 5.91 0.05 5.96*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 423 of 567 All Regions 738 181.12 18.46 199.58

a This table presents unweighted facility counts and flow for surveyed facilities (excluding baseline closures) . The regional study design for the benefits analysis uses weights based on flow rather than facility counts. EPA did not develop weighted facility counts by benefits re gion. The “All Regions” total of 738 surveyed facilities includes 532 electric generating facilities and 206 manufacturing facilities, excluding baseline closures. The total (weighted) estimated universe of facilities, excluding baseline closures, is 1,065 facilities. b Recirculating facilities are facilities with closed - cycle cooling or impoundments that qualify as closed - cycle cooling. Non recirculating facilities include facilities with CWIS classified as once - through . c The California region includes four facilities in Hawaii. There are no coastal facilities in Oregon and the one coastal facility in Washington is classified as a baseline closure. d A facility in Texas has intakes in both the Inland and Gulf of Mexico regions. It is included in the Inland region in the table to prevent the double counting of facilities. EPA obtained estimates of regional i mpingement mortality and entrainment by extrapolating impingement mortality and entrainment observed at 98 facilities with i mpingement and entrainment studies (model facilities) to all regulated facilities in the same region. EPA used regional estimates to more accuratel y estimate impacts by accounting for differences in ecosy stems, aquatic species, and characteristics of commercial and recreational fishing activities across regions. Extrapolation was conducted on the basis of AIF reported for the period 199 6

– 1998 by facilities in response to EPA’s Section 316(b) Detailed Questionnaire and Short Technical Questionnaire. Chapter 3 of the BA provides details of the extrapolation procedure. Because the goal of the anal ys is was to provide estimates of i mpingement mortality and entrainment at regional and national scales, EPA recognizes that these averages may not reflect the substantial variability at individual facilities. Inspite of this variability , EPA determine d that this extrapolation is a reasonable basis for developing estimates of regional - and national - level benefits for the purposes of the final existing facilities rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 424 of 567 **C. Physical Impacts of I**  **mpingement Mortality and Entrainment** EPA based the benefits analy sis on facility- provided i mpingement mortali ty and entrainment monitoring data. Facility data consist of records of impinged and entrained organisms sampled at intake structures and include organisms of all ages and life stages. Sampling protocols were not standardized across facilities. F acility protocols differed in sampling methods and equipment used, the number of samples taken, sampling duration, and the unit of time and volume of intake flow used to express i mpingement mortality and entrainment . To standardize estimates across facilities, EPA c onverted sampling counts into annual i mpingement mortality and entrainment . Using standard fishery modeling techniques, 158 EPA constructed models that combined facility- derived i mpingement mortality and entrainment counts with life history data from the scientific literature to derive annual estimates of the following :  Individuals

– the number of individual organisms impinged and entrained by facility intakes. Under this metric, eggs, larvae, juvenile, and adult organisms are counted as equivalent individ uals.

 A1Es (age - one equivalent losses)

—the number of individual organisms of different ages impinged and entrained b y facility intakes, standardized to

158 Ricker, W.E. 1975. Computation and interpretation of biological statistics of fish populations. Fisheries Research Board of Canada, Bulletin 191; Hilborn, R. and C.J. Walters. 1992. Quantitative Fisheries Stock Assessment, Choice, Dynamics and Uncertainty. Chapman and Hall, London and New York; Quinn, T.J., II. and R.B. Deriso. 1999. Quantitative Fish Dynamics. Oxford University Press, Oxford and New York; Dixon, D.A. 1999. Catalog of Assessment Methods for Evaluating the Effects of Power Plant Operations o n Aquatic Communities. Electric Power Research Institute (EPRI) Final Report. Report number TR112013.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 425 of 567 equivalent numbers of 1 - ye ar - old fish. A conversion rate between all life history stages and age 1 is calculated using species - specific survival tables based on life history schedule and age - specific mortality rates . An individual younger than age 1 is a fraction of an age - one equivalent; an individual older than age 1 represents more than one age - one equivalent . EPA finds it appropriate to use the A1E measure because information i n the record indicates that an overwhelming majority of eggs, larvae and juveniles do not survive into adulthood and the A1E calculations adjust for differences in survivorship base d on species and age specific mortality rates. EPA recognizes that using A1Es simplifies a complex ecological situation, because some of the smaller fish would provide an ecological benefit to other species as food even if they would not survive to adultho od. Recognizing this as one nonmonetized benefit in the anal ys is, using an A1E approach is the most reasonable approach available because to date, there is insufficient data to account for the extent to which organisms that do not survive to adulthood prov ide a benefit to other organ i sms which can be reliabl y monetized .  Forgone fishery

yield

— pounds of commercial fish harvest and numbers of recreational fish and shellfish that are not harvested because of impingement mortality and entrainment . EPA used the Thompson - Bell equilibrium yi eld*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 426 of 567 mod e l 159 to convert impingement mortality and entrainment to forgone fishery yi eld, assuming th at (1) impingement mortality and entrainment reduces the future yi eld of harvested adults, and (2) reductions in impingement mortal ity and entrainment rates will lead to an increase in harvested biomass. The general procedure involves multiplying age - specific harvest rates by age - specific weights to calculate an age - specific expected yi el d .  Biomass p roduction f orgone— biomass that woul d have been produced had individuals not been impinged or entrained , 160 calculated for all species from species - and age - specific growth rates and survival probabilities. It refers to the mass of impinged and entrained organisms that would have serve d as valuable components of aquatic food webs, particularly as an important food supply to other aquatic species. Estimates of forgone fishery yield include direct and indirect losses of impinged and entrained species that are harvested. Indirect losses represent the yi eld of harvested species lost because of reductions in prey availability according to a simple troph ic

159 Ricker, W.E. 1975. Computation and interpretation of biological statistics of fish populations. Fisheries Research Board of Canada, Bulletin 191 . 160 Rag o, P.J. 1984. Production forgone: An alternative method for assessing the consequences of fish entrainment and impingement losses at power plants and other water intakes. Ecological Modeling, 24(1 - 2): 79 - 111.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 427 of 567 transfer model (i. e. , forage species). 161 Chapter 3 of the BA contains detailed methodology

for these analy ses . Studies from individual facilities may underestimate or overestimate i mpingement mortality and entrainment rates at those facilities. For example, facility studies ty

picall y focus on a subset of fish species a ffe cted b y i mpingement mortality and entrainment , resulting in other species being ignored . The number of individuals lost to i mpingement mortality and entrainment is then underestimated. E stimating the magnitude of this underestimate is not possible because of the low number of replicate studies . Moreover, studies often do not count earl y life stages of organisms that are more difficult to identify . In addition, many

of the impingement mort ality and entrainment studies used by the Agency were conducted more than 30 years ago, prior to the improvement of aquatic conditions that have resulted from implementation of the C WA as well as S tate and local laws and efforts . In locations where water quality was degraded at the time of impingement mortality

and entrainment sampling relative to current conditions, the abundance and diversity of fish populations might have been depressed, resulting in low impingement mortality and entrainment estimates. Therefore, use of these data may underestimate the magnitude of current impingement mortality and entrainment. Alternativel y, studies could have been conducted in locations where local fish populations are now lower than they were when the study

occurred. Such a shift in fish

161 Indirect losses account for about 10 percent of commercial and recreational harvest reductions at baseline.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 428 of 567 populations might have occurred because of natural variability in populations, because of other anthropogenic effects (i.e., over - harvesting), or because of competition from invasive species. In such cases, the use of these data may overestimate the magnitude of current impingement mortality and entrainment. EPA’s use of linear methods for projecting losses to fish and shellfish in the waterbody may

also overstate or understate impacts. Nevertheless, the data from facility studies are the best means to estimate the relative magnitude of impingement mortality and entrainment nationwide. Exhibit X - 2 presents EPA’s estimates of baseline annual impingement mortality

and entrainment , and reductions in annu al impingement mortality and entrainment estimated to occur under the final rule and other options considered. Impingement mortality

and entrainment reductions under the final rule are less than the reductions under Proposal Option 2 and greater than reduc tions under Proposal Option 4. Unlike the anal ys is of Proposal Option 2, EPA did not model the entrainment reductions from cooling tower installation under the final rule and Proposal Option 4 because these would be based on site - specific determinations of BTA, which are not possible to predict with information EPA has today . EPA estimated a small amount of entrainment losses under the final rule and Proposal Option 4 due to the assumed installation of variable speed pumps at some facilities to achieve c ompliance via the low velocity compliance alternative . **Exhibit X**  **- 2**  **. Baseline**  **annual IM&E and**  **annual reductions in IM&E for**  **existing units at all facilities**  **subject to the final rule**  Loss mode a Reduction in annual IM&E by regulatory option b ,c Baseline Annual IM&E*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 429 of 567 Proposal Option 4 Final Rule – Existing Units Proposal Option 2 Individuals (millions) IM 419.9 441.3 511.9 568.6 E 399.8 1, 693 .9 335,447.6 497, 316.3 IM&E 819.7 2, 135.2 335,959 .4 497, 884.8 Age- One Equivalents (millions) IM 612.8 647.5 748.2 824.2 E 1. 4 4. 5 889. 3 1, 106.7 IM&E 614.2 652.0 1, 637.5 1, 931.0 Forgone Fishery Yield (million lbs) IM 12. 6 13 . 3 15. 4 16.9 E 0. 0 0.1 35. 7 52. 9 IM&E 12. 6 13 . 4 51. 1 69.8 Production Forgone (million lbs) IM 129.7 136.5 157 .2 174.8 E 0. 5 2. 4 337.0 451.8 IM&E 130.3 138 .9 494.2 626.6 a IM = impingement mortality; E = entrainment; IM&E = impingement mortality and entrainment b IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater t han 125 mgd and impingement mortality limitations based on modified traveling screens for all facilitie s with flow greater than 2 mgd. c The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E reductio ns associated with the new unit provision of the final rule are presented in Exhibit X - 4. Exhibit X - 3 presents EPA’s estimates of annual impingement mortality and entrainment for final rule and other considered option s by category of fish species . E stimates of annual forgone fishery yield include both direct losses of harvested species and indirect losses from reductions in prey fish species. Organisms convert (on average) only about 10 percent of the mass of food they consume into additional tissue mass. Thus, although essential to maintain ecos ys tem function, the vast majority of biomass moving through food webs does not reach higher trophic levels associated with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 430 of 567 commercial and recreational species and harvest . Instead, the biomass of prey species is metabolized and used for predator locomotion , reproduction, and tissue repair. Accordingl y , the portion of impingement mortality and entrainment that are counted within the forgone harvest metric represent only a small percentage of all organisms experiencing impingement mortality and entrainment at cooling water intake structure s . Neither forage species nor the unlanded portion of recreational and commercial species were assigned direct use values in this analy sis , although losses in forage species did contribute to the overall losses in recreational and commercial species as noted above. Because the majority

of annual impingement mortality and entrainment include unharvested recreational and commercial fis h and forage fish, considering nonuse values in the final rule benefits anal ys is is particularl y i mportant . If nonuse values were not considered at all, only

two to three percent of fish losses would be represented in monetized benefits. **Exhibit X**  **- 3**  **. Distribution of annual baseline**  **IM&E and reductions in IM&E by species category, for individual**  **organisms and Age -**  **1 equivalents , at existing units for the final rule and options considered** 

IM&E Metric a Reduction in IM&E by regulatory option b ,c Baseline IM&E Proposal Option 4 Final Rule – Existing

Units Proposal Option 2 Individuals (millions) All Species 819.7 2, 135.2 335,959 .4 497, 884.8 Forage Species 607 .9 1, 423.6 224,323.1 325,069.1 Commercial & Recreational Species 211.8 711 .5 111,636.3 172,815.8 Commercial & Recreational Harvest (millions of fish) 16. 1 17. 1 44.7 54.0 Lost Individuals with Direct Use Value 1. 97 % 0. 80 % 0.01 % 0.01 %*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 431 of 567 (%) Age-One Equivalents (millions) All Species 614.2 652.0 1, 637.5 1, 931.0 Forage Species 528.2 560 .8 1, 258.7 1, 459.7 Commercial & Recreational Species 85.9 91.2 378.8 471.3 Commercial & Recreational Harvest (millions of fish) 16. 1 17. 1 44.7 54.0 A1E Losses with Direct Use Value (%) 2. 63 % 2. 62 % 2. 73 % 2. 80 %

a IM&E = impingement and entrainment; A1E= age - one equivalent; b IM& E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mg d. c The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E reductions associated with the new unit provision of the final rule are presented in Exhibit X - 4. In addition to the final rule and other options analyzed for existing units (Proposal Option 4 and Proposal Option 2), EPA analyzed requirements for new units at existing facilities. EPA’s new un it provision in the final rule establishes entrainment requirements for all new stand - alone units at existing facilities . EPA could not directly apply the extrapolation methodology used for existing units because facility- specific information was not available for new units. Instead, EPA estimated impingement mortality and entrainment reductions on the basis of impingement mortality and entrainment reductions per million gallons per day from the anal ys is of existing units. The estimated reduction in impingement mortality

and entrainment for the new unit requirement is summarized in Exhibit X - 4.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 432 of 567 **Exhibit X**  **- 4.**  **A nnual**  **reductions in IM&E by species category for the final rule for new units**  IM&E metric a Reduction in IM&E b Individuals (millions) All Species 867.2 Forage Species 566.1 Commercial and Recreational Species 301.1 Commercial and Recreational Harvest (millions of fish) 0. 1 Lost Individuals with Direct Use Value (%) 0.01 % Age-One Equivalents (millions) All Species 2.3 Forage Species 1 .7 Commercial and Recreational Species 0.7 Commercial and Recreational Harvest (millions of fish) 0. 1 A1E Losses with Direct Use Value (%) 2. 87 %

a A1E= age - one equivalent; IM& E = impingement mortality and entrainment b Impingement mortality and entrainment reductions increase throughout the compliance period. The values presented here reflect the peak reductions achieved in 2059, the final year of the compliance period. IM&E Ef fects: entrainment requirements for all stand - alone or units . **D. National Benefits of the Final**  **Rule and Options Considered** 1. Overview Economic benefits of the final rule and other options considered for regulated facilities can be categorized broadl y into use and nonuse benefit s of goods and services. Use values include benefits that pertain to the human use (direct or indirect) of affected fishery resources. Use values reflect the value of all current direct and indirect uses of a good or service. Direct use benefits can be further categorized according to whether affected goods and services are tr aded in the market ( i. e. commercially captured fish are traded, recreational catch is not). Likewise, indirect use benefits can be linked to direct goods and services. For example, reductions in impingement mortality and entrainment*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 433 of 567 of forage fish will enh ance the biomass of species targeted for commercial (market) and recreational (nonmarket) uses . Itcould also affect property values. Nonuse benefits are those benefits that are independent of any current or anticipated human use of a resource. Nonuse benefits reflect human values associated with existence and bequest motives. Inother words, these values reflect the value the public places on something simply as a result of its existence or natural functioning . EPA estimated the economic benefits from national regulatory options using a range of valuation methods. Commercial fishery benefits were valued using market data . Recreational angling benefits were valued using a benefits transfer approach based on revealed and stated preference data . To estimate indirect use benefits from reduced impingement mortality

and entrainment of forage species, EPA used a simple trophic transfer model. This model translated changes in impingement mortality and entrainment of forage fish into changes in the harvest of co mmercial and recreational species. All benefits for fish saved under today ’s final rule are estimates on the basis of projected numbers of age - one equivalent fish, converted to harvestable age equivalents on a species - by- species basis for those commercial species anal yz ed. EPA calculated the monetary value of use benefits of the final rule and other options considered for existing facilities using two discount rate values: 3 and 7 percent. All dollar values presented are in 2011 dollars . Because avoided fis h deaths occur mainl y in fish that are younger than harvestable age (eggs, larvae, and juveniles), the main benefits from avoided impingement mortality and entrainment would be realized*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 434 of 567 ty picall y 3 to 4 ye ars after their avoided death. A detailed descripti on of the approaches used to address this is in Appendix C of the BA. Neither forage species nor the unlanded portion of recreational and commercial species were assigned direct use values in this analy sis. Their potential value to the public is derived from several alternative sources: their indirect use as both food and breeding population for those fish that are harvested; and nonuse value . The nonuse value include s individuals’ WTP (willingness to pay) for the protection of fish based on a sense of altruism, stewardship, bequest, or vicarious consumption; and their support of ecos ys tem stability and function. To estimate a subset of nonuse benefits from reducing impingement mortality and entrainment of forage species and unlanded commercial and recreational species, EPA conducted a benefits transfer using a nonmarket valuation study of aquatic ecosy stem improvements. This effort generated partial estimates of nonuse values f

or resource changes for a species that represents less than one percent of adverse environmental impacts. EPA developed and fielded an original stated preference survey to estimate total WTP for improvements to fishery resources affected by

imping ement mortality

and entrainment from regulated 316(b) facilities (75 FR 42438, July 21, 2010). Preliminary results of the stated preference survey were described in a Notice of Data Availability (77 FR 34927, June 12, 2012). EPA presents preliminary benefi ts estimates based on the stated preference survey

in the BA to demonstrate progress on this effort. In the absence of final survey

results, EPA estimated partial nonuse benefits for the final rule using the benefits transfer approach from proposal. EPA updated the proposal results to incorporate*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 435 of 567 additional stock assessment data for winter flounder, the species used as the basis for the anal ys is. Due to the challenges associated with estimating nonuse benefits, some nonuse benefits are described on ly qualitativel y. 2. Timing of Benefits Discounting refers to the economic conversion of future benefits and costs to their present values, accounting for the fact that individuals value future outcomes less than comparable near - term outcomes. Discounting enables a valid comparison of benefits and costs that occur across different periods. EPA used discounting to account for differences in the timing across benefits and costs under the final rule and options considered. EPA estimated the expected bene fits of the final rule once the rule takes full effect , then used discounting to account for delay s in the realization of benefits. Two different delay s affect the timing of benefits under the final rule and options considered. First, facilities will begin to incur costs prior to technology installation. Facilities will face regulatory

requirements once the rule is effective , but it will take time for requirements to be developed and for the required technology to be installed . Analyzed facilities are assigned a technology installation ye ar which considers facility characteristics and technology being installed. EPA assumed that facilities installing impingement technology

tend to complete technology installation sooner than facilities installing closed - cycl e cooling (for other options considered) . The assignment of technology

installation years is speculative on EPA’s part, because EPA does not have sufficient data on hand to project the schedules that Directors will set for facilities . See Chapter 3 of the EA document for the final existing facilities rule for details on EPA’s*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 436 of 567 development of technology installation years . EPA effectivel y discount s benefits to a greater extent than costs to account for the lag between the incurrence of costs and the realization of benefits. Second, an additional time lag will result between technology implementation and use values via increased fishery yields. This lag occurs because several years could pass betwe en the time an organism is spared from impingement mortality or entrainment and the time of its potential harvest. For example, a larval fish spared from entrainment (in effect, at age 0) could be caught by a recreational angler at age 3, meaning that a 3 - year time lag arises between the incurred technology cost and the realization of the estimated recreational benefit. Likewise, if a 1 - ye ar - old fish is spared from impingement and is then harvested b y a commercial waterman at age 2, there is a 1 - ye ar lag be tween the incurred cost and the subsequent commercial fishery benefit. To account for this growth period, EPA applied discounting by species groups in each regional study . Note that nonuse values (depending on how they are measured) do not necessaril y need to be discounted similarly . 3. Recreational Fishing Valuation a. Recreational Fishery Methods To estimate recreational benefits of the final options, EPA developed a benefits transfer approach on the basis of a meta - anal ys is of recreational fishing valuat ion studies designed to measure the various factors that determine WTP for catching an additional fish per trip. Regional benefits are summarized as follows ( for details, see Chapter 7 of the BA):*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 437 of 567 1. Estimate the annual forgone catch of recreational fish (number of fish) attributable to impingement mortality and entrainment under current conditions. 2. Estimate the marginal value per fish using a benefit transfer function based on a meta - anal ys is of recreational fishing studies . 3. Multiply the forgone catch by the marginal value per fish to estimate the total annual value of the forgone catch. 4. Estimate the annual value of reductions in the forgone catch attributable to the regulatory

anal ys is options. 5. Discount the time path of benefits at 3 and 7 percent to reflect the time lag between impingement mortality and entrainment reductions and increased harvests. b. Estimated Benefits to Recreational Anglers Decreasing impingement mortality and entrainment increases the number of fish available to be caught b y recreational anglers, thereby increasing angler welfare. Exhibit X - 5 shows the estimated benefits resulting from reduced impingement mortality and entrainment under today ’s final existing facilities r ule and other options that EPA considered. The total annualized recreational fishing benefits for all regions at existing units of existing facilities for the final rule ( impingement mortality and entrainment combined) are $ 1 8 million using a 3 percent discount rate and $ 14 million using a 7 percent discount rate. Annual recreational fishing benefits for other options considered range from $ 1 7 to $ 4 3 million using a 3 percent discount rate and $ 1 3 million to $ 3 0 million using a 7 percent discount rate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 438 of 567 **Exhibit X**  **- 5.**  **Annual recreational fishing benefits from eliminating or reducing IM&E**  **at existing units at**  **existing facilities**  **for the final rule and other options considered** Regulatory option a Increased harvest 3% discount rate 7% discount rate (million fish) (million 2011$) (million 2011$) Proposal Option 4 6. 1 17. 1 1 2.6 Final Rule – Existing Units 6 . 5 18. 2 1 3 .5 Proposal Option 2 20.5 4 3.0 29.5 Baseline 25.3 78.8 7 2 .0

a IM& E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilitie s with flow greater than 2 mgd. 4. Commercial Fishing Valuation Reductions in impingement mortality and entrainment at cooling water intake structures are expected to benefit the commercial fishing industry . By reducing the number of fish killed, the number of fish available for harvest is expected to increase. The next section summarizes the methods EPA used to estimate benefits to the commercial fishing sector. The section after that presents the estimated value of commercial fishing benefits. a. Commercial Fishing Valuation Methods The total loss to the economy from impingement mortality and entrainment impacts on co mmerciall y harvested fish species is determined b y the sum of changes in both producer and consumer surplus. EPA assumed a linear relationship between stock*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 439 of 567 and harvest, such that if 10 percent of the current commerciall y targeted stock were harvested, 10 percent of the commercially targeted fish lost to impingement mortality and entrainment would have been harvested absent impingement mortality and entrainment . The percentage of fish harvested is based on data of historical fishing mortality rates. Producer surplus provides an estimate of the economic damages to commercial fishers, but welfare changes can also be expected to accrue to final consumers of fish and to commercial consumers (including processors, wholesalers, retailers, and middlemen) if the pro jected increase in harvest is accompanied by a change in price. The anal ys is of market impacts involves the following steps (for details , see Chapter 6 of the BA): 1. Assessing the net welfare changes for fish consumers due to changes in fish harvest and the corresponding change in fish price. 2. Assessing net welfare changes for fish harvesters due to the change in total revenue, which could be positive or negative . 3. Calculating the increase in net social benefits when the fish harvest changes by combining the we lfare changes for consumers and harvesters. For a more detailed description of the methodology for commercial fishing, see Chapter 6 of the BA. b. Commercial Fishing Valuation Results Exhibit X - 6 presents the estimated annual commercial fishing benefits attributable to the proposed options. The results reported include the total reduction in losses in pounds of fish, and the value of this reduction discounted at 3 and 7 percent . T otal estimated annualized commercial fishing benefits for the United States f or the final rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 440 of 567 are $ 0.9 million using a 3 percent discount rate and $ 0.7 million using a 7 percent discount rate. Annual commercial fishing benefits for other options considered range from $ 0. 9 million to $ 3.9 million using a 3 percent discount rate and $ 0. 7 million to $ 2. 7 million using a 7 percent discount rate. EPA estimated the expected price changes from eliminating baseline levels of impingement mortality and entrainment and found them to be small, rang ing from 0.2 to 2.5 percent. **Exhibit X**  **- 6.**  **Annual commercial fishing benefits from eliminating or reducing IM&E**  **at existing units**  **at existing**  **facilities for the final rule and other options considered**  Regulatory option a Increased harvest 3% discount rate 7% discount rate (million lbs

) (million 2011$) (million 2011$) Proposal Option 4 5.3 0. 9 0. 7 Final Rule – Existing Units 5 .7 0.9 0.7 Proposal Option 2 14.0 3.9 2. 7 Baseline 17.3 8. 0 7. 2

a IM& E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all fa cilitie s with flow greater than 2 mgd. 5. Nonuse Benefits Aquatic organisms with no direct use benefits account for the majority of cooling water intake structure losses ( Exhibit X - 3) . Although many individuals may not use a particular waterbody for recreation or fishing , individuals nevertheless may value improvements in that waterbody . To quantitativel y assess the ecological gains from the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 441 of 567 final rule and other options considered, EPA took both of the only two approaches available for quantifying nonuse benefits

– a benefits transfer approach and a stated preference survey . It is not necessary to use a stated preference survey approach to calculate ben efits ; however, important nonuse benefits can be missed b y not using a stated preference survey

approach. So EPA took both approaches , but relied on only the benefits transfer approach for the benefits anal ys is supporting the final rule . The benefits transfer approach relies on the existence of previously published studies with values that can be transferred; in instances where nonuse is potentially significant, as is the case here, previously

published studies would only include nonuse value if they a dopted a stated preference approach . EPA used a benefit transfer approach to partially monetize nonuse benefits associated with reductions in impingement mortality and entrainment of fish, shellfish, and other aquatic organisms under the regulatory options for the North Atlantic and Mid Atlantic benefits regions . EPA applied estimated values from a study conducted in Rhode Island; these estimates are likely to be more representative of nonuse values held by individuals residing in the Northeast United States and less accurate in other regions . EPA was unable to identify comparable studies conducted in other regions that could be used to estimate nonuse values. Chapter 8 of the BA provides further detail on this anal ys is. The preferred techniques used to estimate total values (including both use and nonuse values), in general, are benefits transfer or to conduct a stated preference survey . There are many studies in the environmental economics literature that quantify benefits*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 442 of 567 or WTP associated with various ty pes of water quality

and aquatic habitat changes. However, none of these studies allows the isolation of non - market WTP associated with quantified reductions in impingement mortality and entrainment for forage fish or unlanded portion of commercial and recreational species. a. Nonu se Benefits Transfer EPA identified a recent stated preference survey of Rhode Island residents that is closely related to the 316(b) policy context. The study

results have been pub lished in multiple scientific journals and books including Johnston et al. 162 and Zhao et al. 163 Both the Rhode Island study and the present context address policy changes that increase the number of forage fish in aquatic habitat with unknown effects on overall fish populations. The Rhode Island study

was developed originally as a case study addressing Rhode Island residents’ preferences for the restoration of migratory fish passage over dams in Rhode I sland ’s Pawtuxet and Wood - Pawcatuck watersheds. It estimat es nonuse values b y asking respondents to consider changes in ecological indicators reflecting quantity of habitat, abundance of wildlife, ecological condition, and abundance of migratory fish species. Within this study , e stimated values were based on the relative change in abundance of fish species most affected b y restoration .

162 Johnston, R.J. E.T. Schultz, E.T., K. Segerson, E.Y. Besedin, and M. Ramachandran. 2012. Enhancing the content validity of stated preference valuation: The structure and function of ecological indicators. Land Economics, 1: 102 - 120. 163 Zhao, M., Johnson, R. J. and Schultz, E. T. 2013. What to Value and How ? Ecological Indicator Choices in Stated Preference Valuation. Environmental Resou rce Economics. Published online, February 8, 2013.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 443 of 567 Estimating benefit functions from the Rhode Island choice experiment survey 164 allows one to distinguish benefits associated with resource uses from those associated primaril y with nonuse motives. Within the benefit transfer application, WTP is quantified for increases in non - harvested fish alone on the basis of the implicit price for migratory fish changes. This transfer holds constant all effects related to identifiable human uses (e.g., effects on catchable fish, public access, and observable wildlife). The remaining welfare effect

—derived purely

from effects on forage fish with little or no direct human use— may therefore be most accuratel y characterized as a no nuse benefit realized by households. The estimation of nonuse values involved the following steps: 1. Use a model published by Zhao et al. 165 to estimate household WTP per percent increase in the number of fish in a given watershed. The household WTP values ref lect a survey version that characterizes effects on the number of migratory fish passing upstream . 2. Calculate the relative change in abundance for the fish species most affected by the regulation. The structure of the transfer study dictates that WTP should be evaluated based on the single species that would experience the greatest relative

164 Johnst on, R.J. E.T. Schultz, E.T., K. Segerson, E.Y. Besedin, and M. Ramachandran. 2012. Enhancing the content validity of stated preference valuation: The structure and function of ecological indicators. Land Economics, 1: 102 - 120; Zhao, M., Johnson, R. J. and Schultz, E. T. 2013. What to Value and How ? Ecological Indicator Choices in Stated Preference Valuation. Environmental Resource Economics. Published online, February 8, 2013. 165 Op cit. .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 444 of 567 increase in abundance from restoration and that WTP estimates from multiple species impacted b y IM &E should not be treated as strictly additive. After reviewing av ailable stock assessment data, current stock size, and the magnitude of IM&E, EPA determined winter flounder to be the species likel y to experience the greatest percent increase in abundance among those species with sufficient stock information to conduct the anal ys is within the boundaries of the North Atlantic and Mid - Atlantic benefits regions . This species is harvested; however, earl y life stages of recreational and commercial species may be eaten b y other organisms and therefore have nonuse values. 3. Estimate total household WTP by applying model results for WTP per percentage o f estimated winter flounder impingement mortality and entrainment . Total regional WTP is the product of household WTP and the number of households in the affected region (for details , see Chapter 8 of the BA) . b. Estimated Nonuse Benefits for the North Atlantic and Mid - Atlantic Regions EPA expects that a decrease in impingement mortality and entrainment will lead to increased fish abundance in affect ed water bodies, thus increasing nonuse benefits . Exhibit X - 7 shows the benefits that would result from reducing impingement mortality and entrainment through today ’s final rule and other options considered. Application of the transfer study

requires that the increases be expressed as a percent improvement relative to a maximum number of fish that could be supported. EPA calculated estimates of WTP on the basis of the increase in age - 1 equivalent winter flounder relative to the estimated number of age - 1 fish when the stock is at maximum sustainable yield , thus*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 445 of 567 assuming that the population structure of the current stock is similar to the larger stock. The total annualized nonuse benefits for the North Atlantic and Mid - Atlantic regions for the existing unit provision of the final rule are $ 1 million using a 3 percent discount rate and $ 0. 8 million usi ng a 7 percent discount rate. For other options considered, annualized nonuse benefits range from $ 0.3 to $ 5 1 million using a 3 percent discount rate and $ 0.3 to $ 37 million using a 7 percent discount rate. **Exhibit X**  **- 7.**  **Annual nonuse benefits from eliminating or reducing IM&E**  **at existing units**  **at existing facilities in the North Atlantic and Mid**  **- Atlantic regions**  **for the fina l rule and options considered**  **a** Regulatory option b Winter flounder IM&E (million A1E) Increased winter flounder

A1E abundance (%) 3% discount rate (millions 2011$) 7% discount rate (millions 2011$) Proposal Option 4 0.03 0.02 % 0.3 0.3 Final Rule – Existing Units 0.08 0.07 % 1.0 0. 8 Proposal Option 2 4.78 4.18 % 5 1.1 3 7.3 Baseline 6.23 5.44 % 99 .1 96.9

a IM&E = impingement and entrainment; A1E= age - one equivalent; b IM& E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all fa cilitie s with flow greater than 2 mgd.

c . Stated Preference Survey EPA conducted a stated preference survey to calculate benefits associated with minimizing adverse impacts to aquatic ecos ys tems from cooling water intakes. Refer to Section s VI .F.1 and X.D.1 for additional discussion o f the stated preference survey . EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 446 of 567 did not rely

on the results of its stated preference survey in estimating the benefits of today ’s rule. 6. Threatened and Endangered Species This section summarizes methods and results of EPA’s anal ys is of benefits from improved protection of T&E species from today ’s final rule and options considered . Chapter 5 of the BA provides further detail on this anal ys is. Even if levels of mortality due to impingement and entrainment from cooling water intake structures of T&E species are low in absolute numbers, they may represent a substantial portion of annual reproduction because of the reduced population levels that cause a species to be protected. Consequentl y, impingement mortality and entrainment may either lengthen recovery time, or hasten the demise of the se species. Adverse effects of cooling water intake structure s on T&E species can occur in several ways:

 Populations of T&E species may suffer direct harm as a consequence of impingement mortality

and entrainment .  T&E species may suffer indirect harm if a cooling water intake structure alters food webs.

 C ooling water intake structure s can alter habitat designated as critical to the long term survival of T&E species . Consequently , the 316(b) regulation will help preserve threatened and endangered species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 447 of 567 a. Qualitative Assessment of Impingement Mortality and Entrainment Impacts on T&E S pecies By definition, T&E species are characterized by low population levels. As such, it is unlikely

that these species are recorded in significant number, if recorded at all, in impingement mortality

and entrainment monitoring studies. Thus, losses are difficult to identify and quantify

in a framework developed for non - listed species. Consequently , EPA develop ed a qualitative methodology to estimate the number of T&E species affected b y impingement mortality and entrainment . To qualitatively

assess the potential for cooling water intake structure impacts on aquatic T& E species, EPA constructed a database that assessed the geographical overlap of cooling water intake structure and habitat used by aquatic T&E species. This database identified the number of T&E species potentially a ffe cted b y each regulated 316(b ) facility , and the number of facilities potentially a ffe cting each T&E species. Additional details are in Chapter 5 of the BA. Using this database, EPA found 99 F ederall y- listed aquatic T&E species that overlap with at least one covered cooling water intake structure ( an interaction in Exhibit X - 8). T&E species included freshwater, marine, an d anadromous fish, freshwater mussels, and sea turtles. On average, the habitat of each T&E species overlapped with 22 covered facilities ( Exhibit X - 8 ), suggesting that the 316(b) rule may h ave substantial positive benefits of ensuring the long - term sustainability and recovery

of T&E species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 448 of 567 **Exhibit X**  **- 8.**  **Number of regulated**  **316(b) cooling water intake structures in aquatic**  **T&E species habitat on a per**  **- species basis**  Subset of affected species a b Species Interactions b Facilities per T&E species c Avg Max All T&E Species 99 2,158 21.8 103 T&E Freshwater Mussels 53 1,176 21.8 103 T&E Anadromous Fish 12 235 19.6 101 T&E Freshwater Fish 21 65 3.1 7 T& E Snails 7 199 28.4 49 Sea Turtles 6 483 80.5 102

a Aquatic T& E species includes species listed as threatened or endangered by the U.S. Fish and Wildlife Service (freshwater) or National Oceanic and Atmospheric Administration National Marine Fisheries Service (marine). Only aquatic species overlapping with a minimum of one cooling water intake structure are included. b Each interaction represents an overlap between the range of a T&E species and cooling water intake structure. c Avg = average, Max = maximum b. Quantitative Assessment of Impingement Mortality and Entrainment Impacts on T&E Species Although difficult to observe and quantify , EPA identified 14 T&E species with confirmed impingement mortality and entrainment based on facility impingement mortality and entrainment studies. EPA notes that some impingement mortality and entrainment studies identifying T&E losses were conducted prior to the listing of the species under the ESA . In addition to documented species - level instances of T&E*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 449 of 567 mortality , EP A identified impingement mortality and entrainment at the level of genera 166 when these genera contain a T&E species whose habitat range overlapped the reporting facility ’s cooling water intake structure . Although these are not confirmed impingement mortality and entrainment of T&E species, they provide evidence that additional T&E species are likel y to be directl y affected b y impingement mortality and entrainment . EPA found seven genus - level matches, suggesting that the 14 T&E species suf fering impingement mortality

and entrainment may

be inaccurate . Of the 14 F ederally- listed T&E species for which EPA was able to document losses in impingement mortality and entrainment studies, EPA was able to quantify impingement mortality

and entrainment for two species (pallid sturgeon and Topeka shiner). The documented impingement mortality and entrainment occurred before these species were Federall y- listed. Data were either qualitative or of insufficient quality to quantify local or regional impingement mortality and entrainment for the remaining 12 F ederall y- listed T&E species. EPA also quantified impingement mortality and entrainment for the American p addlefish (Polyodon spathula ), listed by several states as threatened or endangered under S tate law , using facility impingement mortality and entrainment studies. Exhibit X - 9 presents EPA’s estimates of baseline annual impingement mortality

and entrainment , and reductions in impingement mortality and

166 Genera is the plural of genus. Genus is the rank superior to species in taxonomic biological classification. For example, the genus of Atlantic salmon ( Salmo falar) is Salmo .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 450 of 567 entrainment which EPA estimate s will occur under the final rule and other options considered. **Exhibit X**  **- 9.**  **Baseline annual IM&E**  **for T&E species and reductions for existing units at existing**  **facilities (A1Es)**  **a,b**

Species Proposal Option 4 Final Rule – Existing Units Proposal Option 2 Baseline Paddlefish c 7,930.1 8, 245.4 15,659.7 18,841.4 Pallid Sturgeon 65 .4 67.6 78.0 89.5 Topeka Shiner 2,910.9 3, 009 .8 3, 471.9 3,984.9 Total 10,906.4 11,322.8 19,209.5 22,915.7

a IM&E = impingement and entrainment; A1E= age - one equivalent; b IM& E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all fa cilities with flow greater than 2 mgd. c Th e American paddlefish is not a Federally - listed T&E species but is listed as threatened or endangered on several state lists. d This analysis is based solely on IM controls. Impingement mortality

and entrainment is only

one of many

factors that adversel y affect T&E species. Estimating total population impacts from changes in i mpingement mortality and entrainment requires estimates of current populations of these fish and estimates of other anthropogeni c effects which were not readily available for all T&E species with quantified impingement mortality and entrainment at the time of this*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 451 of 567 anal ys is. Therefore, EPA was unable to quantify effects on T&E populations from the 316(b) regulation. c. Valuation Methods of T&E Fish Species EPA had sufficient data from impingement mortality and entrainment studies to quantify impingement mortality and entrainment e stimates for three T&E species, Topeka shiner, pallid sturgeon, and paddlefish ( Exhibit X - 9 ) . Two of thes e species (pallid sturgeon and paddlefish) have potential use values. A limited recreational fishery (mostly catch and release) exists for paddlefish in several states; although harvesting pallid sturgeon is illegal, the species is sometimes caught by recr eational anglers. EPA estimated recreational use values for pallid sturgeon and paddlefish b y applying transfer values from a Random Utility Model anal ys is it conducted to evaluate recreational fishing benefits of the 316(b) Phase II regulation to quantifi ed impingement mortality and entrainment (for details , s ee Chapter 5 of the BA ). EPA was unable to generate estimates of nonuse values for T&E fish species because reliable population estimates needed to transfer the values were unavailable. However, EPA e mphasizes that nonuse values for T&E fish species are likely to be significantl y greater than any use values. Harvest of these species is prohibited , reflecting a societal judgment that protection and preservation of these species is of greater value than harvest. d. Estimated Monetary Benefits from Reduced Mortality of T&E Fish Species Exhibit X - 10 presents the estimated annual ized benefits for a subset of T&E species. For existing units under the final rule , EPA estimates total annualized use*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 452 of 567 benefits for T&E species with quantified impingement mortality and entrainment of $ 0. 4 million using a 3 percent discount rate and $ 0. 3 million using a 7 percent discount rate. For other options considered, annualized benefits range from $ 0.4 to $ 0.7 million using a 3 percent discount rate and $ 0. 3 to $ 0.5 million using a 7 percent discount rate. **Exhibit X**  **- 10**  **. Annual use benefits from eliminating or reducing**  **IM&E of T&E species at**  **existing units of existing**  **facilities for the final rule and other options considered**  **a ,b**  **,c** Regulatory option Increased harvest 3% discount rate 7% discount rate (number of fish) (million 2011$) (million 2011$) Proposal Option 4 7,995.5 0.4 0. 3 Final Rule – Existing Units 8 ,313.0 0. 4 0. 3 Proposal Option 2 15,737.7 0.7 0.5 Baseline 18,930.9 1.2 1. 3

a IM&E = impingement and entrainment; T&E = threatened and endangered Values are included for pallid sturgeon and paddlefish in the Inland region. b IM& E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow commensurate with closed - cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all fa cilities with flow greater than 2 mgd. c This analysis is based solely on impingement mortality controls. EPA notes that the benefit values presented in Exhibit X - 10 represent only a fraction of values for T&E species potentiall y affected b y the final existing facilities rule. The Agency

was able to obtain only use values and for only a small subset of all affected T&E species. Moreover, because of the nature of T&E species, even a small increase in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 453 of 567 population could yi eld economic and ecological benefit s (e.g., Richardson and L oomis 167 ; Bell et al. 168 ; Berrens et al. 169 ) e. Valuation Methods for T&E Sea Turtles In addition to estimating values of T&E fish with quantitative estimates of impingement mortality

and entrainment , EPA estimated the WTP for sea turtle conservation. In this analysis, EPA applied estimates from a study using a stated preference valuation approach to estimate total economic value of a management program that reduces the risk of extinction of loggerhead sea turtles. 170 Although impingement m ortality and entrainment of turtles is relatively low compared to mortality from shrimp trawling and other fisheries , 171 it is known that reducing turtle mortality during juvenile and subadult life stages can have a substantial positive effect on population growth. 172 The marginal change in extinction probability of sea turtles due to 316(b) regulatory options is likely

to be at least 0.01, or a 1 percent decrease in the probability of extinction over 25 years. This assessment is based on

167 Richardson, L., and J. Loomis. 2009. The total economic value of threatened, endangered and rare species: An updated meta - analysis. Ecological Economics, 68(5): 1535 - 1548. 168 Bell, K.P, D. Huppert, and R.L. Johnson. 2003. Willingness to pay for local coho salmon enhancement in coastal communities. Marine Resource Economics, 18: 15 - 31. 169 Berrens, R.P, P. Ganderton, and C.L. Silva. 1996. Valuing the protection of minimum instream flow in New Mexico. Journal of Agricultural and Resource Economics 21(2): 294 - 309. 170 Whitehead, J.C. 1993. Total economic values for coastal and marine wildlife: specification, validity, and valuation issues. Marine Resource Economics, 8(2): 119 - 132. 171 Plotkin, P. T., (Ed). 1995. National Marine Fisheries Service and U. S. Fish and Wildlife Service Status Revie ws for Sea Turtles Listed under the Endangered Species Act of 1973. National Marine Fisheries Service. Silver Spring, MD. 172 Crouse, D.T, L.B. Crowder, and H. Caswell. 1987. A stated - based population model for loggerhead sea turtles and implications for conservation. Ecology, 68(5): 1412 - 1423.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 454 of 567 reports that impingement mortality and entrainment may result in the loss of more than 100 turtles per year and because turtle population growth rates are known to be sensitive to changes in juvenile and subadult lif e stages. 173 f. Benefits from Reduced Mortality of T&E Sea Turtles The U.S. range of loggerhead sea turtles includes the Gulf of Mexico, South Atlantic, Mid - Atlantic, and North Atlantic 316(b) regions. 174 To calculate national WTP for an increased 25 - ye ar survival probability of loggerhead sea turtles, EPA assumed the affected population to include households in S tates with 316(b) facilities that are in loggerhead sea turtle habitat. EPA determined that 54.8 million households would be willing to pay

for improved protection of loggerhead sea turtles. Although i nciden ces of mortality have been reported at facilities in California, Texas, Florida, South Carolina, North Carolina, and New Jersey , EPA does not have sufficient information to quantify total sea turtle losses due to intakes or the reductions in such losses th at might occur from the final rule or options considered. But as an illustrative example, assuming that the survival probability

of loggerhead sea turtles over 25 years w ere increased by 1 percent , and appl yi ng a mean household value of $0.37 (20 11 dollars ), the monetized value would be $ 19. 3 million and $ 18. 8 million using discount rates of 3 percent and 7 percent , respectivel y. EPA is presenting these estimates only to demonstrate the potential range

173 Ibid. 174 U.S. Fish and Wildlife Service (USFWS) (2010c). "North Florida Ecological Services Office: Loggerhead Sea Turtle (Caretta )." Available at http://www.fws.gov/northflorida/seaturtles/turtle%20factsheets/loggerhead - sea - turtle.htm.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 455 of 567 of benefits, and is not including them in national benefits totals for the final rule and options considered. A ctual household values and total benefits may be higher or lower than these estimates, with Proposal Option 2 likely to provide substantiall y greater benefits than the final rule and Proposal Option 4. Because EPA does not currentl y have accurate national estimates of impingement mortality and entrainment for turtle species, nor are population models available that estimate the effect of 316(b) regulation on population size and extinction risk, these estimates are presented only as an illustrative example and are not included in national totals. g. Other Indications of Society ’s WTP for Protection of T&E Species Many sources provide information that indicates that society places significant value on protecting T&E species. These include, but are not limited to :  The Endangered Species Act of 1973, which provides for the conservation of T&E species of fish and wildlife. Federal and State expenditures on T&E species were $ 593 million during fiscal year 2011 just on protection of those Federallylisted T&E species that have habitat overlapping cooling water intake structure s . This accounted for 68 percent of the $869 million spent on fish, marine reptiles,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 4 56 of 567 crustacean s, corals, clams, aquatic snails and marine mammals listed under the Endangered Species Act. 175

 Restrictions on activities in the habitat occupied by T&E species. For example, water diversions on the San Joaquin - Sacramento River delta, in place to protect th e Delta Smelt (

Hypomesus transpacificus ), limit the extraction of water for drinking and agriculture.

 The willingness of individuals to volunteer their time to conserve T&E species. For example, dozens of organizations recruit thousands of volunteers every ye ar to participate in sea turtle conservation and research projects. Volunteers are often required to undergo substantial training and commit to long hours. While costs to replace, protect , or enhance stocks, and costs to users affected by efforts to con serve stocks are not direct measures of economic benefits, they indicate that society is willing to pay

significant sums to protect and restore populations of T&E species. Although impingement mortality and entrainment is only

one of many

stressors on thes e species, reducing the amount of impingement mortality and entrainment could contribute to the recovery of populations over time, thereb y eliminating some costs associated with conserving T&E species.

175 U.S. Fish and Wil dlife Service. 2012. Federal and State Endangered and Threatened Species Expenditures. Fiscal Year 2011.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 457 of 567 7. Assessment of Thermal Discharge Impacts In addition to reducing total impingement mortality and entrainment, closed - cycle cooling reduces thermal pollution. Most retrofit installations of cooling towers at electric generating facilities have been required b y NPDES permits to reduc e thermal disch arg es. Since thermal discharges are a product of cooling water intake structures , the impacts of thermal discharges are a relevant benefit to consider when assessing appropriate technologies to reduce the effects of cooling water intakes . The installation of technologies, such as closed - cycle cooling sy stems, can reduce thermal pollution significantl y . Thermal pollution has long been recognized to cause harm to the structure and function of aqu atic ecosy stems. Concerns about the impacts of thermal discharges are addressed b y State water quality standards that, when implemented through NPDES permits, limit the amount of heat that can be discharged to a receiving water and result , in some cases, in technology- based permit conditions . Section 316(a) of the CWA applies to point sources with thermal discharges . Itauthorizes the NPDES permitting authority to impose alternative effluent limitations for the control of the thermal component of a discharge in lieu of the effluent limitations that would otherwise be required under sections 301 or 306 of the CWA . Before such a “thermal variance” can be granted, the permittee must demonstrate that the alternative limit will assure the protection and propagation of a balanced, indigenous population of shellfis h, fish and wildlife in and on the body of water into which the discharge is to be made . 40 CFR 125.73(a) . EPA did not quantify

nationally

the impacts of thermal discharges. However, numerous studies have shown that thermal discharges may substantially

alter the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 458 of 567 structure of aquatic communities by modifying photosy

nthetic, metabolic, and growth rates. Thermal discharges also harm aquatic life by reducing levels of dissolved oxygen, altering the location and timing of fish behavior such as spawning, aggregation, and migration, and may

cause thermal shock - induced mortality for some species. Adverse temperature eff

ects may also be more pronounced in aquatic ecos ys tems that are already subject to other environmental stressors such as high levels of biochemical oxygen demand, nutrient and sediment contamination, or pathogens. Within mixing zones, which often extend several miles downstream from outfalls, thermal discharges may impair efforts to restore and protect the waterbody . For example, permit requirements to limit nitrogen discharges in a watershed, and thereby reduce harmful algal blooms , may be counteracted b y thermal discharges which promote growth of harmful algae. Thermal discharges may

have indirect effects on fish and other vertebrate populations through increasing patho gen growth and infection rates. Thermal discharges may

thus alt er the ecological services, and reduce the benefits, of aquatic ecos ystems that receive heated effluent. The magnitude of thermal effects on ecos ys tem services is related to facility - specific factors, including the volume of the waterbody from wh ich cooling water is withdrawn and returned, other heat loads, the rate of water exchange, the presence of nearb y refugia, and the assemblage of nearb y fish species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 459 of 567 8 . Assessment of Social Cost of Carbon The social cost of carbon reflects the estimated i ncrease in the burden of global warming to society in future years due to higher greenhouse gas (GHG) emissions, measured as CO 2 equivalents, associated with additional energy requirements

– energy penalty , auxiliary

energy requirements , and compliance tec hnology install ation

– of regulatory

options. EPA estimated positive or negative benefits associated with the social cost of carbon for decreases or increases, respectively for Proposal Option 4 and Final Rule or Proposal Option 2, in energy requirements at regulated facilities under the final rule and other options considered. EPA’s estimates of changes in CO 2 emissions were based on results from the electricity market anal ys is using IPM . 176 For electric generators, EPA estimated the change in CO 2 resulting from the energy penalty associated with close - cycle recirculating technology , auxiliary

energy requirement for operating compliance technology , and technology

installation downtime. For manufacturers, EPA estimated the change in carbon emissions resulting from the energy penalty and auxiliary

energy requirement . For compliance technology

installation downtime at manufacturers , EPA assumed no change in carbon emissions as the short - term replacement of energy by electric power generating

176 For this analysis, EPA used the Integrated Planning Model (IPM®), a comprehensive electricity market optimization model that assesses such impacts wi thin the context of regional and national electricity markets.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 460 of 567 facilities that would otherwise be produced at manufacturers could either increase or decrease emissions. To estimate benefits associated with the reductions in carbon emissions, EPA used social cost of carbon values calculated from the 201 3 document titled, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analy sis Under Executive Order 12866 , developed by the U.S. Government Interagency Working Group on Social Cost of Carbon. The Agency used the Working+ Group’s annual social cost of carbon values for 2010 through 2050 based on the 3 percent average discount rate , which EPA has concluded is the most appropriate discount rate for intergenerational benefits such as the social cost of carbon. See Chapter 9 of the BA for annual social cost of carbon values based on discount rates of 2.5, 3 (high) and 5 percent . Benefi ts for each ye ar of the anal ys is period were calculated b y multiplying the change CO 2 emissions by

the SCC value for that ye ar. Similar to the treatment of other benefits, EPA discounted all year - specific social cost of carbon values to the beginning of 20 13 and calculated an annualized value over 51 ye ars using a 3 - percent discount rate. EPA acknowledges that it is mixing estimates of benefits categories anal yz ed at different discount rates, but finds in this case that using different discount rates is jus tified by the intergenerational nature of the social cost of carbon, for purposes of the sensitivity anal ys is based on a 7 percent discount rate to discount other benefit categories. Exhibit X - 11 presents annualized benefits for existing units for the fin al rule and options considered. Included in the monetized benefits is EPA’s estimate that the final rule will reduce greenhouse gas emissions by 9.3 million tons of CO 2 - equivalent*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 461 of 567 emissions over the 40 - ye ar compliance period for this analy sis. Both the final rule and Proposal Option 4 result in a net reduction in CO 2 emissions for existing units during the anal ys is period. Prop osal Option 2 would result in a net increase in emissions and negative benefits for existing units . Using a 3 percent discount rate, annualized benefits under the final rule for existing units are $ 12 million. Using a 7 percent discount rate, annualized benefits under final rule for existing units are $ 13 million. **Exhibit X**  **- 11**  **. Benefits Associated with Social Cost of Carbon**  **for Existing Units for the Final Rule and Other**  **Options Considered (in**  **millions of 2011 dollars)**  **a** Regulatory Option b 3 % Discount Rate 7 % Discount Rate Proposal Option 4 12 . 4 13. 4 Final Rule – Existing Units 12 . 4 13. 4 Proposal Option 2 - 1, 643 .1 - 1, 21 8.2

a Benefits are based on the workgroup’s average social cost of carbon values using 3 percent rate. 9 . Benefits for New Units In addition to the final rule and other options considered for existing units, EPA anal yz ed the benefits of the requirements for new units at existing facilities. EPA could not directly

apply the benefits methodology used for IM&E (impingement mortality and entrainment) reductions at existing units to new units because it lacks facility- specific info rmation to estimate regional impingement mortality and entrainment reductions for new units. Instead, EPA estimated benefits associated with IM&E reductions for the new unit requirements on the basis of the monetary benefits per million gallons per day from the anal ys is of existing units. EPA also estimated benefits associated with changes in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 462 of 567 GHG emissions as the result of the energy penalty associated with operating cooling towers using the social cost of carbon. Exhibit X - 1 2 below presents the estimates of mone tized benefits for the new unit requirements. M onetized benefits are - $ 0. 2 million discounted at 3 percent and - $ 0. 1 million discounted at 7 percent. **Exhibit X**  **- 12**  **. National benefits under the**  **final rule for new units at existing facilities (in 2011 dollars)**  Regulatory option a Monetized benefit categories

Recreational fishing Commercial fishing Nonuse T&E species b Social Cost of Carbon c Total 3% discount rate (millions 2011$) Final Rule

- New Units 0. 0 0.0 0. 1 0.0 - 0.3 - 0. 2 7% discount rate (millions 2011$) Final Rule

- New Units 0. 0 0.0 0. 0 0.0 - 0. 2 - 0. 1

a IM&E Effects: Final Rule – New Units - entrainment requirements for all stand - alone facilities b Benefits estimates for T&E species are restricted to recreational fishing benefits from increased catch of T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species. c Benefits are based on the Work Group’s average social cost of carbon values using the 3 percent rate. 10 . National Monetized Benefits Quantifying and monetizing reductions in impingement mortality and entrainment attributable to the final rule and other options considered is challenging . National benefit estimates are subject to uncertainties inherent in valuation approaches used to assess the benefits categories ( s ee Chapters 5, 6, 7, 8 , 9, and 12 of the BA). While EPA has no data to indicate that the results for each benefit category are atypical or unreasonable , some*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 463 of 567 potentially

significant benefit categories have not been full y mo netized , and thus the national monetized benefits presented below likely underestimate total benefits . Exhibit X - 13 presents EPA ’ s estimates of the partial monetized benefits from impingement mortality

and entrainment reduction and the social cost of carbo n for the final rule and other options considered . These monetized values represent use values from increased commercial and recreational catch, benefits transfer of recreational fishing benefits of threatened and endangered species, nonuse values associat ed with an increase in fish abundance (those fish that are not caught) in the North east and Mid Atlantic benefit regions , and national benefits estimates associated with the social cost of carbon . For the final rule for existing and new units, partial estimated benefits from reducing impingement mortality and entrainment at existing units are $ 33 million using a 3 percent discount rate and $ 29 million using a 7 percent discount rate. EPA was not able to fully monetize the benefits for the final rule . Thus, the estimates represent a conservative (i.e. , low) estimate of total regulatory benefits of the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 464 of 567 **Exhibit X**  **- 13**  **. Summary of national benefits for all**  **regulated facilities**  **for the final rule** Regulatory option a Monetized benefit categories

Recreational fishing Commercial

fishing Nonuse T&E S pecies b Social Cost of Carbon c Total 3% discount rate (millions 2011$) Final Rule

– Existing Units 18. 2 0.9 1.0 0. 4 12 . 4 33. 0

Final Rule

– New Units 0. 0 0.0 0. 1 0.0 - 0.3 - 0. 2

Final Rule (Existing Units + New Units) 18. 3 0.9 1. 1 0. 4 12.1 3 2.8

7% discount rate (millions 2011$) Final Rule

– Existing Units 1 3 .5 0.7 0. 8 0. 3 13. 4 2 8.7

Final Rule

– New Units 0. 0 0.0 0. 1 0.0 - 0. 2 - 0. 1

Final Rule (Existing Units + New Units) 1 3 .5 0. 7 0.9 0. 3 13.2 2 8.6

a IM&E Effects: Final Rule– Existing Units = impingement mortality standards based on modified traveling screens for all facilities with flow greater than 2 mgd; Final Rule– New Units: entrainment requirements for all stand - alone facilities where the turbine and condenser are newly built or replaced. b Benefits estimates for T& E species are restricted to benefit transfer of recreational fishing benefits from T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species. c Baseline does not include potential benefits associated with the social cost of carbon.

Exhibit X - 14 presents total monetized benefits for the final rule and other options EPA considered for existing units by benefit category

using a 3 percent discount rate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 465 of 567 Annual monetized benefits are slightl y higher for the final rule than Proposal Option 4, and are negative for Proposal Option 2. Including both existing and new units, annual monetized benefits are $32.8 million for the final rule, $30.8 million for Proposal Option 4 and - $1,542.8 m illion for Proposal Option 2.

**Exhibit X**  **- 14**  **. Summary of national benefits for all regulated facilities**  **for the final rule and other options EPA considered (3% discount rate)**  Monetized Benefit Categories Annual Benefits by Regulatory Option a ( millions 2011$) Proposal Option 4 **Final Rule –**  **Existing Units** Proposal Option 2 Existing Units Recreational Fishing 17.1 18.2 43.0 Commercial Fishing 0.9 0.9 3.9 Nonuse 0.3 1.0 51.1 T&E Species b 0.4 0.4 0.7 Social Cost of Carbon 12.4 12.4 - 1,641.3 Total 31.0 33.0 - 1,542.6 Final Rule - New Units Total - 0.2 - 0.2 - 0.2 Existing and New Units Total 30.8 32.8 - 1,542.8

a IM& E Effects: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule– Existing Units = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd and entrainment mortality limitations commensurate with closed - cycle recirc ulating systems for all facilities with flow greater than 125 DIF; Final Rule– New Units: entrainment requirements for all stand - alone facilities. b Benefits estimates for T&E species are restricted to benefit transfer of recreational fishing benefits from T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 466 of 567 EPA recognizes that its estimates of ecological and economic benefits projected to occur under regulation are affected by uncertainty

at many levels .  Not all ecological goods and services affected b y cooling water intake structures at regulated 316(b) facilities are modeled or monetized, suggesting that the total benefits of regulation may be und erestimated. For example, potential increases in ecos ys tem stability

that might occur as a result of regulation is not explicitly estimated nor monetized.

 When particular ecological goods and services are monetized, data is not alway s available at the national level . For example, EPA was only able to estimate the nonuse benefits transfer for a species that represents less than one percent of adverse environmental impacts .  For the proposed rule, EPA used a habitat - based method to assess potential WTP for reducing fish mortality at CWI S based on the approximate area of habitat required to produce and support the number of organisms lost to impingement mortality and entrainment. 177 EPA did not consider the habitat - based approach appropriate for primary

analy sis of benefits for the proposed rule, and did not include it in its analy sis for the final rule. However, the results for the proposed

177 U.S. EPA. 2011. Environmental and Economic Benefits Analysis for the Proposed Section 316(b) Existing Facilities Rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 467 of 567 rule illustrate that total benefits may be substantially greater than benefits estimated using the methodologies described in Section D. Because EPA was able to only partiall y monetize nonuse benefits using the benefits transfer approach, EPA expects that the actual benefits will be greater tha n those presented here. **X I**  **. Related Acts of Congress, Executive Orders, and Agency Initiatives**  **A. Executive Order 12866: Regulatory Planning and Review and Executive**  **Order 13563: Improving Regulation and Regulatory Review** Under section 3(f)(1) of E . O . 128 66 (58 FR 51735, October 4, 1993), this action is an economicall y significant regulatory action because it is likely to have an annual effect of $100 million or more on the economy . Accordingl y, EPA submitted this action to the Office of Management and Bud get for review under E . O . 12866 and 13563 (76 FR 3821, January

21, 2011), and any changes made in response to Office of Management and Budget recommendations have been documented in the docket for this action . In addition, EPA prepared an anal ys is of the c osts and benefits associated with this action ; this analy sis is discussed in detail in the Chapter 8 of the EA. A copy of the EA is available in the docket for this action , and the anal ys is is briefl y summarized here.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 468 of 567 Exhibit X I - 1 (drawn from Chapter 8 of the EA) provides the resul ts of the benefit cost anal ys is . 178 Placeholders for option - specific non - monetized benefits are represented by B P4 for Proposal Option 4, B FR for the final rule and B P2 for Proposal Option 2. While prelimin ary, and not yet reviewed b y EPA’s Science Advisory Board, the preliminary results of EPA’s stated preference survey (see BA, Chapter 11 ) suggest that B P4 , B FR , and B P2 have the potential to be significantly different from zero. EPA is therefore using plac eholders for additional benefits that are not captured by its anal ys is of use benefits and the benefits transfer for nonuse benefits. However, EPA did not rel y on the results of its stated preference survey in estimating the benefits of today ’s rule. EPA has concluded that the benefits of the rule justify the costs. EPA also anal yz ed the employ ment effects of the final rule and other options considered in development of this rule. The results of that anal ys is are summarized in Section IX .E of this preamble and Chapter 9 of the EA . **Exhibit XI**  **- 1. Annualized benefits and costs of the regulatory options (in millions, 2011 dollars)**  **a**

**Option Total social costs**  **b Benefits**  **c** Proposal Option 4 $ 251.8 $ 31. 0 + B P4 Final Rule $ 274.9 $ 3 2.8 + B FR Proposal Option 2 $ 3, 643.2 - $ 1, 54 2.6 + B P2

178 The costs and benefits presented in this section assume that facilitie s with impoundments will qualify as having closed - cycle recirculating systems in the baseline EPA also conducted the costs and impacts analysis where impoundments were not assumed to meet the definition of closed - cycle recirculating. EPA did not find that this assumption would change EPA’s final rule decision; see DCN 12 - 2501 .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 469 of 567 a Social costs and benefits were annualized over 51 years and discounted using 3 percent rate. b Total social costs include compliance costs to facilities and government administrative costs. See EA Chapter 7 . C Benefits include social cost of carbon from changes in greenhouse gas emissions due to the final rule. **B. Paperwork Reduction Act**  The information collection requirements in this rule will be submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act , 44 U.S.C. 3501 et seq . The supporting statement in EPA’s information collection request estimates the burden to permitted facilities; b urden is defined at 5 CFR 1320.3(b). The 60 - day comment period will commence after publication of the draft ICR . The information collection requirements are not enforceable until they are approved by OMB . Today's rule require s several distinct ty pes of information collection as part of the NPDES permit application . Ingeneral, the information will be used to assist EPA in regulating environmental impacts, namel y impingement mortality and entrainment, at cooling water intake structures and to identify how a cooling water intake structure at an existing facility

or a new unit at an existing facility will meet the impingement mortality and entrainment requirements . Today ’s rule also require s other reporting and recordkeeping requirements to demonstrate and document compliance with the requirements. Compliance with the applicable information collection requirements established under this final rule is mandatory (see §§ 122.21(r), 125.136, 125.137, 125, and 138).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 470 of 567 EPA does not consider the specific data that will be collected under this final rule to be confidential business information. However, if a respondent does consider thi s information to be confidential, the respondent may request that such information be treated as confidential. All confidential data submitted to EPA will be handled in accordance with 40 CFR 122.7, 40 CFR part 2, and EPA’s Security Manual Part III, Chapter 9, dated August 9, 1976. This final rule modifies regulations at § 1 22.21 to require each existing facility and new unit at an existing facility to prepare and submit information as part of the facility ’s NPDES permit application. A detailed list of required data items is provided below. EPA estimates an average annual burden of 634,596 hours for the final rule’s information collection requirements . Of this total, EPA estimates that 1,068 regulated facilities will incur an annual average burden of 588 hours per respondent (for a total of 627,666 burden hours) . EPA estimates that Directors in 46 States and one territory with NPDES permitting authority , will incur an annual average burden for the review, oversight, and administration of the rule, of 6,930 hours , or an annual average of 147 hours per permitting authority . Slight differences in calculations are due to rounding . The corresponding estimate of costs other than labor (labor and non - labor costs are included in the total cost of the final rule discussed in Section IX of this preambl e) during the first three ye ars after promulgation of the rule is an annual average of $ 8.5 million . Non - labor costs include activities such as capital costs for sampling equipment, remote monitoring devices, laboratory services, photocopying, and the purchase of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 471 of 567 supplies. The burden and costs are for the information collection, reporting, and recordkeeping requirements for the three - year period beginning with the assumed effective date of this rule. Additional information collection requirements will occur after this initial three - ye ar period as (1) existing facilities will continue to gather and submit required permit application materials and (2) new units at existing facilities commence operations and are issued permits. In formation and s tudies to be submitted under this final rule (as required by §§ 122.21(r) and 1 25.9 5) by

existing facilities and new units at existing facilities are listed below . For more information, see S ection VII I in the preamble.

 Source Water Ph ys ical Data ( § 1 22.21(r)(2))

 Cooling Water Intake Structure Data ( § 1 22.21(r)(3))

 Source Water Baseline Biological Characterization Data ( § 1 22.21(r)(4))

 Cooling Water Sy stem Data ( § 1 22.21(r)(5))

 Chosen Method of Compliance with Impingement Mortality Standards ( § 1 22.21(r)(6))

 Performance Studies ( § 1 22.21(r)(7))

 Operational Status ( § 1 22.21(r)(8))

 Entrainment Characterization Study ( § 1 22.21(r)(9))

 Comprehensive Technical Feasibility and Cost Evaluation Study ( § 1 22.21(r)(10))

 Benefits Valuation Study ( § 1 22.21(r)(11))

 Non - Water Quality and Other Environmental Impacts Study ( § 1 22.21(r)(12))*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 472 of 567 In addition to the information requirements of the permit application, NPDES permits normally

specify monitoring and reporting requirements to be met by the permitted entity . Existing facilities and new units at existing facilities are required to perform monitoring as determined by the requirements in § 1 25.94 and in accordance with §§ 1 25.96 and 125.97 . Finally , in accordance with § 125.95(e), facilities are required to maintain records of all submissions that are part of its permit application for a minimum of five years. If the Director approves a request for reduced permit application studies under § 125.95(a) or § 125.98(g), the facility must keep records of all submissions that are part of a previous permit application for an additional five years. Also, facilities must keep record of all submissions that are part of the permit reporting requirements for a periods of at least five ye ars from the date of permit issuance, in accordance with § 1 25. 97(d) . An agency

may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number . The OMB control numbers for EPA's regul ations in 40 CFR are listed in 40 CFR part 9 . **C. Regulatory Flexibility Act (RFA)**  The Regulatory

Flexibility

Act generally

requires an agency

to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act o r any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 473 of 567 1. Defi nition of Small Entities and Estimation of the Number of Small Entities Subject to Today ’s Final Regulation For EPA’s assessment of the impact of today ’s final rule on small entities, small entity is defined as either a (1) a small business as defined b y SBA ( Small Business Administration) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city , county, town, school district , or special district with a po pulation of fewer than 50,000; or (3) a small organization that is any not - for - profit enterprise that is independently owned and operated and is not dominant in its field. Federal or State entities owning regulated facilities are not small entities. EPA pe rformed this assessment separatel y for the two classes of facilities and their owner entities

—electric generators and manufacturers

—that are subject to today ’s rule. a. Electric Generators EPA followed the SBA criteria for identifying small, non - government entities in the electric power industry, as follows:

 For non - government entities with electric power generation as a primary bus iness, small entities were designated using employ ment size thresholds specific to each 6 - digit NAI CS code.

 For government entities other than F ederal or State governments, small entities are those with a population of fewer than 50,000 .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 474 of 567  For entities with a primary busi ness other than electric power generation, the relevant size criteria are based on revenue or number of employees by NAI CS sector (see Exhibit X I - 2). **Exhibit XI**  **- 2. NAICS codes and SBA entity size standards for entities that own electric generators with a**  **primary business other than electric power generation NAICS code**  **NAICS description SBA size standard**  **212111 Bituminous Coal and Lignite Surface Mining**  **500 employees 221210**  **Natural Gas Distribution 500 employees**  **33111 0**  **Iron and Steel Mills and Ferroalloy**

**Manufacturing 1,000 employees**  **331315 Aluminum Sheet, Plate, and Foil** 

**Manufacturing 750 employees**  **333611 Turbine and Turbine Generator Set Units** 

**Manufacturing 1,000 employees**  **488320 Marine Cargo Handling**  **$35.5 million in revenue**  **491110 Postal Service**  **$7 million in revenue 522110**  **Commercial Banking $175 million in assets**  **523910 Miscellaneous Intermediation**  **$7 million in revenue 524126**  **Direct Property and Casualty Insurance**

**Carriers 1,500 employees**  **525910 Open**  **- End Investment Funds**  **$7 million in revenue**  **525990 Other Financial Vehicles**  **$7 million in revenue 541990**  **All Other Professional, Scientific, and**

**Technical Services $14 million in revenue**  **551112 Offices of Other Holding Companies**  **$7 million in revenue 562212**  **Solid Waste Landfill $**  **35.5 million in revenue**  **562219 Other Nonhazardous Waste Treatment and** 

**Disposal $**  **35.5 million in revenue**  **562920 Materials Recovery Facilities**  **$ 19**  **million in revenue***** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 475 of 567 **611310 Colleges, Universities, and Professional** 

**Schools $**  **25.5 million in revenue**  EPA conducted this analysis for the same set of parent entities it anal yz ed in the general entity- level cost - to - revenue analy sis discussed in Section IX.D. To determine whether these are small entities on the basis of the size criteria outlined above, EPA compared the relevant measure for the identified parent entities to the appropriate SBA size criterion. EPA conducted this anal ys is using (1) facility- level weights without using entity- level weights, and (2) entity- level weights without using facility- lev el weights (for information on these two weighting approaches, see Appendix H of the EA). EPA estimates that between 31 and 52 small entities own electric generators that are subject to the rule. They represent approxi mately

25 to 32 percent of entities that own electric generators (see Exhibit XI - 3). **Exhibit XI**  **- 3. Number of**  **entities that own electric generators, by ownership type Ownership type**  **a Using facility**  **- level weights**  **Using entity -**  **level weights**  **b Total**  **Small % Small**  **Total Small**  **% Small** Cooperative 13 1 1 84.6 % 2 1 18 85.7 % Federal 1 0 0.0% 1 0 0.0% Investor - owned 57 6 10.5 % 6 0 7 11.7 % Municipality 19 7 36.8 % 3 8 1 9 50.0 % Nonutility 26 7 26.9 % 30 8 26.7 % Other Political Subdivision 4 0 0.0 % 6 0 0.0 % State 3 0 0.0% 3 0 0.0% **All Entity Types 123**  **31** 25.2 **% 159**  **52** 32.7 **%***** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 476 of 567 a State and F ederal entities are considered large.

b In addition to the 52 small parent entities on an unweighted basis, one additional entity is an “other political subdivision entity” for a total of 53 . This entity owns only implicitly analyzed facilities; consequently, there is no explicitly analyzed entity in the other political subdivision ownership ca tegory to represent this implicitly analyzed small parent entity. As the result, weighted entity counts do not include one small other political subdivision entity. b. Manufacturers EPA also used the SBA criteria for identifying small, non - government entities in the manufacturing sector. Exhibit X I - 4 lists the SBA size threshold guidelines for entities that own m anufacturer s .

**Exhibit XI -**  **4 .**  **NAICS codes and SBA entity size standards for entities that own manufacturers NAICS code**  **NAICS description SBA**  **size standard 111930**  **Sugarcane Farming $**  **0. 75**  **million in**  **r evenue**  **113110 Timber Tract Operations**  **$7 million**  **in r** **evenue 211111**  **Crude Petroleum and Natural Gas Extraction 500**  **e mployees**  **212210 Iron Ore Mining**  **500 e**  **mployees 212391**  **Potash, Soda, and Borate Mineral Mining**  **500 e**  **mployees 221122**  **Electric Power Distribution 4,000,000 MWh of electric generation**  **311221 Wet Corn Milling**  **750 e**  **mployees 31131**  **4 Cane Sugar Manufacturing**  **750 e**  **mployees 311313**  **Beet Sugar Manufacturing 750**  **e mployees**  **311942 Spice and Extract Manufacturing**  **500 e**  **mployees 313210**  **Broadwoven Fabric Mills 1,000**  **e mployees**  **321113 Sawmills**  **500 e**  **mployees 322121**  **Paper (except Newsprint) Mills 750**  **e mployees**  **322122 Newsprint Mills**  **750 e**  **mployees 322130**  **Paperboard Mills 750**  **e mployees** *** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 477 of 56 7 **322211 Corrugated and Solid Fiber Box Manufacturing**  **500 e**  **mployees 322220**  **Paper Bag and Coated and Treated Paper**

**Manufacturing 500 e**  **mployees 322291**  **Sanitary Paper Product Manufacturing 500**  **e mployees**  **324110 Petroleum Refineries**  **1,500 e**  **mployees 324191**  **Petroleum Lubricating Oil and Grease Manufacturing 500**  **e mployees**  **325120 Industrial Gas Manufacturing**  **1,000 e**  **mployees 325180**  **Other Basic Inorganic Chemical Manufacturing 1,000**  **e mployees**  **325199 All Other Basic Organic Chemical Manufacturing**  **1,000 e**  **mployees 325211**  **Plastics Material and Resin Manufacturing 750**  **e mployees**  **325311 Nitrogenous Fertilizer Manufacturing**  **1,000 e**  **mployees 325320**  **Pesticide and Other Agricultural Chemical**

**Manufacturing 500**  **e mployees**  **325412 Pharmaceutical Preparation**  **Manufacturing 750**  **e mployees**  **325510 Paint and Coating Manufacturing**  **500 e**  **mployees 325992**  **Photographic Film, Paper, Plate and Chemical**

**Manufacturing 500**  **e mployees**  **325998 All Other Miscellaneous Chemical Product and** 

**Preparation Manufacturing 500**  **e mployees**  **331110 Iron and Steel Mills and Ferroalloy Manufacturing**  **1,000 e**  **mployees 331210**  **Iron and Steel Pipe and Tube Manufacturing from**

**Purchased Steel 1,000**  **e mployees**  **331221 Rolled Steel Shape Manufacturing**  **1,000 e**  **mployees 331222**  **Steel Wire Drawing 1,000**  **e mployees**  **331313 Alumina Refining and Primary Aluminum Production**  **1,000 e**  **mployees 331315**  **Aluminum Sheet, Plate and Foil Manufacturing 750**  **e mployees**  **331410 Nonferrous Metal (except Aluminum) Smelting and** 

**Refining 1,000 employees**  **332312 Fabricated**  **Structural Metal Manufacturing 500**  **e mployees** *** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 478 of 567 **337910 Mattress Manufacturing**  **500 e**  **mployees 339999**  **All Other Miscellaneous Manufacturing 500**  **e mployees**  **423310 Lumber, Plywood, Millwork, and Wood Panel Merchant** 

**Wholesalers 100**  **e mployees**  **423930 Recyclable**  **Material Merchant Wholesalers 100**  **e mployees**  **424510 Grain and Field Bean Merchant Wholesalers**  **100 e**  **mployees 424690**  **Other Chemical and Allied Products Merchant**

**Wholesalers 100**  **e mployees**  **424710 Petroleum Bulk Stations and Terminals**  **100 e**  **mployees 447190**  **Other Gasoline Stations $14**  **million in**  **r evenue**  **522220 Sales Financing**  **$7 million**  **in r** **evenue 523910**  **Miscellaneous Intermediation $7**  **million in**  **r evenue**  **523930 Investment Advice**  **$7 million**  **in r** **evenue 524126**  **Direct Property and Casualty Insurance Carriers**  **1,500 e**  **mployees 525990**  **Other Financial Vehicles $7**  **million in**  **r evenue**  **531110 Lessors of Residential Buildings and Dwellings**  **$ 25**  **million in**  **r evenue**  **551112 Offices of Other Holding Companies**  **$7 million**  **in r** **evenue 561110**  **Office Administrative Services $7**  **million in**  **r evenue**  Similar to the analy sis conducted for electric generators, EPA conducted this anal ys is for the same set of parent entities as anal yzed in the general , entity- level , cost - to revenue anal ys is discussed in Section IX.D. To determine wh ich entities are small, EPA compared the relevant measure for the identified parent entities to the appropriate SBA size criterion. EPA used two sample - weighting schemes in this analy sis ; these provide a range of counts of small entities that own regulated facilities and the number of regulated facilities that they

own that will incur costs under the final rule . EPA does not find either*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 479 of 567 of these sample - weighting schemes to be superior to the other in the quality of the resulting estimates of small entity counts and occurrence of impacts. The different weighting approaches reflect the fact that EPA used sample facilities for the impact anal ys is and lacks precise information on the profile of ownership of the total po pulation of regulated manufacturers facilities

– in terms of the number of small entities owning regulated facilities and the number of regulated facilities that any small entity

would own. EPA developed the weighting schemes using alternative bounding ass umptions about the profile of ownership of regulated facilities by small entities. The weighting schemes provide lower and upper bound estimates of the numbers of small entities , and the numbers of regulated facilities that they own, and accordingl y, the number of small entities in each of the cost - to - revenue impact categories ( for information on the weighting schemes, see Appendix H of the EA). From this anal ys is, EPA estimates that 1 7 to 5 2 small entities own regulated facilities in the six Primary Manufacturing Industries , representing approximately 16 percent of all entities that own regulated facilities in these industries (see Exhibit XI 5).The presence of small entities varies by industry sector. **Exhibit XI -**  **5. Number of small entities that own regulated facilities, by industry** 

**Industry Lower**  **- bound estimate of number of**  **entities that own regulated facilities Upper**  **- bound estimate of number of**  **entities that own regulated facilities Total**  **Small % Small**  **Total Small**  **% Small** Aluminum 4 2 50.0% 11 4 40.6% Chemicals and Allied Products 30 5 16.7% 121 21 17.7% Food and Kindred Products 6 0 0.0% 20 0 0.0% Paper and Allied Products 37 7 18.9% 104 23 21.8% Petroleum Refining 16 2 12.5% 25 2 8.4%*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 480 of 567 Steel 13 1 7.7% 32 2 5.2% Multiple Industries a 4 0 0.0% 14 0 0.0% Primary Manufacturing Industries b

– Total **110 17**  **15.5% 327**  **52 16.0%** 

a These are small entities that own regulated facilities from multiple industries. b EPA did not compile comparable informati on for Other Industries facilities and the entities that own them because it did not have a statistically valid sample of facilities from which to develop such estimates.

c. Total Number of Small Entities that Own Regulated Facilities EPA estimates that between 48 and 104 small entities own regulated facilities in the electric power industry and six primary manufacturing industries together . 2. Statement of Basis As described above, EPA began the small entity impact assessment b y first estimating the number of small entities in the two industry segments subject to the final rule : e lectric g enerators and manufacturers . EPA next assessed whether these small entities would be expected to incur costs that constitute a significant impact and , finally , assessed whether those entities represent a substantial number of small entities. EPA summed annualized after - tax compliance costs for regulated facilities that are assumed to be owned by a given small entity

and calculated the costs as a percentage of entity revenue ( c ost - to - revenue t est). EPA compared the resulting percentages to impact criteria of 1 and 3 percent of revenue. EPA assumed that small entities estimated to incur costs below 1 percent of revenue will not face significant economic impacts, while small entities with costs of at least 1 percent of revenue have a chance of facing*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 481 of 567 economic impacts . EPA assumed that entities incurring costs of at least 3 percent of revenue have a higher likelihood of economic impacts. For both e lectric g enerators and m anufacturers, EPA used sample - weighting approaches that provide a range of estimates of the numbers of small entities and regulated facilities that they own . Exhibit X I - 6 summarizes the Regulatory Flexibility

Act anal ys is results under both weighting approaches for each regulated facilities segment. Overall, the RFA anal ys is for electric generators found that no small entities would potentially incur a significant impact under the fin al rule. Specifically , for electric generators, EPA estimates that zero to three small entities will incur costs exceeding 1 percent of revenue , while no small entity will incur costs exceeding 3 percent of revenue . Following EPA’s guidance on conducting RFA analyses, the number of small entities above the threshold as a percent of all small entities subject to the rule are zero to 10 percent at the 1 percent of revenue threshold, and zero percent at the 3 percent of revenue threshold. The findin gs for manufacturers are comparable . Specificall y, EPA estimates that three to f our small parent entities will incur costs exceeding 1 percent of revenue, and zero to one small parent entity will incur costs exceeding 3 percent of revenue. The associated p ercentages of small entities subject to the final rule are 8 percent to 18 percent at the 1 percent threshold, and zero percent to 6 percent at the 3 percent threshold. Combining the electric generators and manufacturers segments, EPA estimates that three to seven small entities will incur costs exceeding 1 percent of revenue, while zero to one small entity

will incur costs exceeding 3 percent of revenue. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 482 of 567 corresponding percentages of sm all entities are 4 to 13 percent at the 1 percent threshold, and zero to 2 percent at the 3 percent threshold. In summary , under the final r ule, EPA estimates that a small number of small parent entities will incur a potentially significant cost impact in the individual regulated industry segments , and overall, for both segments. The maximum number of small entities estimated to incur costs ex ceeding 1 percent is seven , overall, with three of these small entities in the electric generators segment and f our in the manufacturers segment. The maximum number of small entities with costs exceeding 3 percent is one , overall, with no smal l entities in the electric generators segment and one small entity in the manufacturers segments. In each case, the maximum value reflects the high end of an uncertainty range that is based on different sample weighting approaches. EPA judges that values in the interior of these ranges represent more reasonable estimates of the number of small entities incurring significant impacts. The estimated numbers of entities with significant impacts also represent small percentages of the estimated number of small entities, overall, and in the individual segments. The maximum percentage values at the 1 percent of revenue threshold are 13 percent, overall, 10 percent for electric generators, and 18 percent for manufacturers. At the 3 percent threshold, the maximum percentage values are 2 percent, overall, zero percent for electric generators, and 6 percent for manufacturers. Again, these values reflect the hi gh end of an uncertainty range. Inview of these very modest impacts, EPA judges that the final rule is not consequential in terms of potential impacts for small entities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 483 of 567 **Exhibit XI -**  **6 .**  **Estimated cost -**  **to -**  **revenue impact for small entities that own facilities subject to the regulation**

**Regulated Segment Cost**  **impact category Cost**  **≥ 1% of revenue**  **a Cost**  **≥ 3% of revenue**  **a Number of**  **small entities % of small regulated**  **entities b**  **Number of**

**small entities c**  **% of small regulated entities**  **b** Electric Generators 0 to 3 0 % to 10 % 0 0% Manufacturers d 3 to 4 8 % to 18 % 0 to 1 0% to 6% Electric Generators and Manufacturers d 3 to 7 4 % to 13 % 0 to 1 0% to 2 % a For both electric generators and manufacturers, EPA used sample - weighting approaches that provide a range of estimates of the numbers of small entities and regulated facilities they own (see Section VII(D)(a)(iv) for manufactures and see Sectio n VII(D)(b) (1)(b) for electric generator weighting approaches). b Percentage of small entities incurring a cost - to - revenue impact involves range estimates in both the numerator (number of affected entities) and denominator (number of regulated entities). c Entities with cost - to - revenue ratios of at least 3 percent are included in the number of entities with cost - to - revenue such ratios of at least 1 percent. d Entity counts used in these calculations exclude manufacturers in other industries. EPA estimated that one small parent entity that owns regulated facilities in other industries would incur costs exceeding 1 percent of revenue. 3. Certification Statement Given these findings of very small absolute numbers of small entities estimated to incur significant impacts under the final rule, and low percentages of estimated small entities incurring impacts, I certify that the final rule will not have “ a significant impact on a substantial number of small entities” (no SI SNOSE), overall and by individual industry segment. **D. Unfunded Mandates Reform Act (UMRA)**  Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531 - 1538, requires F ederal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory

actions on State, local, and Tribal governments and the private sector.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 484 of 567 Today ’s rule contains a F ederal mandate that may result in expenditures by State, local, and Tribal governments, in the aggregate, or the private sector , of $100 million or more (adjusted annuall y for inflation) in any one year. Accordingl y, under Unfunded Mandates Reform Act section 202 , EPA has prepared a written statement , which follows below (see Chapter 1 1 of the EA). 1. Summary

of Written Statement a. Authorizing Legislation Today ’s rule is issued under the authority of CWA sections 101, 301, 304, 306, 308, 316, 401, 402, 501, and 510, ( 33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361, and 1370 ) . F or detailed information on the legal authority of this rule , s ee S ection III of this preamble. b. Benefit - Cost Analy sis As described above, the costs, benefits and economic impacts reported in thi s section may

be underestimate d due to EPA’s assumption that facilities with impoundments will qualify as having closed - cycle recirculating s ys tems in the baseline and thus , unless additional controls are required to protect listed species, will incur no t echnology- related costs. L ikewise, for this anal ys is, because these facilities are assumed not to install compliance technology , EPA also assumed they would achieve no benefits. Accordingl y, the benefits reported in this section may be underestimate d , base d on the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 485 of 567 assumption of no technology installation for facilities with impoundments . 181 The existing and new unit provisions of t oday ’s rule are expected to have total annualized pre tax (social) costs of $ 274.9 million . These costs include direct c osts incurred by facilities and implementation costs incurred b y F ederal , State, and local governments. The monetized use and nonuse benefits of the final rule, accounting for the existing and new unit provisions, are estimated to be $ 3 2.8 million. 182 EPA notes that these differences are based on a comparison of a partial measure of benefits with a more complete measure of costs ; therefore, the results must be interpreted with caution. For a more detailed comparison of the costs and benefits of the final rule, see Chapter 8 of the EA . EPA notes that States may be able to use existing sourc es of financial assistan ce to revise and implement today ’s rule . CWA s ection 106 authorizes EPA to award grants to States, Tribes, intertribal consortia, and interstate agencies for administering programs for the prevention, reduction, and elimination of water pollution. These grants may be used for various activities to develop and carry out a water pollution control program, including permitting, monitoring, and enforcement. Thus, State and Tribal NPDES permit programs represent one type of State program that can be funded b y CWA section 106 grants.

181 This factor in potential underestimation of benefits is separate from other considerations that likely lead to benefits underestimation, as described in this section and in the EA and BA reports. 182 Both cost and benefit values were annualized over 5 1 years and discounted at 3 percent . Values include costs and benefits estimated for new units. EPA generated partial estimates of nonuse benefits for resource changes for a species that represents less than one percent of adverse environmental impacts s .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 486 of 567 c. Summary

of State, Local, and Tribal Government Input EPA consulted with State governments and representatives of local governments in developing the rule. The outrea ch activities are dis cussed in S ection III.A.3 of the preamble to the proposed rule (see 76 FR 22268, April 20, 2011) and Chapter 2 of the TDD. EPA has also conducted additional outreach since the proposed rule, including several conference calls with the Association of Clean Water Administrators (including numerous states) and small business representatives (including some local government officials). EPA also combined its ef forts and collected input from S tate and local government entities during development of the proposed E ffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category , which shares many of the same affected facilities as today’s final rule; see 78 FR 34530 (June 7, 2013) for more information . State and local offici als attended numerous site visits with EPA’s staff

, enabling EPA to gather their input ; see DCNs 10 - 6510, 10 - 6518, 10 - 6520, 10 - 6521, 10 - 6523 and 10 - 6524. EPA also responded to requests for information from multiple S tate and local governments. EPA also att ended conferences and participated in workgroups (such as NARUC’s 2013 Winter Committee Meetings) where additional information about S tate and local government interests were presented. Historically , EPA has also conducted a great deal of outreach in devel oping the previous 316(b) regulations over the past decade; for example, see the Phase I final preamble (66 FR 65331, December 18, 2001), the Phase II final preamble (69 FR 41677, July 9, 2004), and the Phase III final preamble (71 FR 35037, June 16, 2006) . d. Regulatory Option Selected*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 487 of 567 EPA considered and analyzed several regulatory options to determine the best technology

available for minimizing adverse environmental impact. These regulatory options are discussed in Section VI of this preamble. These options included a range of technology- based approaches , from impingement mortality technology

at all facilities with a DIF of greater than 50 mgd, to requiring a dditional impingement mortality controls and intake flow commensurate w ith closed - c ycl e cooling for all facilities. As discussed in detail in S ection VI , EPA did not select options exclusively because they are the most cost - effective among the options that fulfill the requirements of section 316(b). EPA selected the final rul e because it meets the requirement of CWA section 316(b) that the location, design, construction, and capacity of cooling water intake structure s reflect the best technology available for minimizing adverse environmental impact s . In addition, EPA has determined that the benefits of the final rule justify the costs, taking into account quantified and qualitative benefits and costs. EPA selected a flexible approach for the final rule from among the options considered ; it allows consideration of costs and benefits on a site - specific basis in determining BTA for reducing entrainment and has flexible requirements for reducing impingement mortality . 2. Impact of Compliance Requirements on Small Governments This rule is not subject to Unfunded Mandates Reform Act section 203 requirements because it contains no regulatory requirements that could significantly or uniquely affect small governments (i.e., governments with a population of fewer than 50,000). For its assessment of the impact of compliance requirements on small governments, EPA compared the estimated total costs and costs per facility that small*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 488 of 567 governments would incur with the costs that large governments would incur. EPA also co mpared costs for regulated facilities owned by small - government entities with costs of regulated facilities owned by non - government entities . The Agency evaluated costs per facility on the basis of both average and maximum annualized cost . The costs for fa cilities owned b y small government entities are less than those estimated for facilities owned b y large government entities , or owned b y small or large non - government entities. EPA interprets these findings to indicate that the final rule will not uniquely or disproportionately affect small governments. Because no manufacturer is government - owned, EPA conducted this anal ys is for e lectric g enerators onl y. a. Go vernment - O wned Electric Generator s by Ownership and Entity- Size Category*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 489 of 567 Exhibit X I - 7 provides an estimate of the number of non - F ederal government entities that own e lectric g enerators, by ownership ty pe and size of government entity . As presented in Exhibit X I - 7 , large government entities own 4 5 e lectric g enerators, and small government entities own 20 e lectric g enerators. Of the 65 facilities owned by government entities, 48 are owned b y municipalities, six are owned b y S tate s and 11 are owned b y o ther p olitical s ubdivision s . Tribal government s own no regulated facilities. **Exhibit XI -**  **7. Number of government**  **- owned**  **electric generators, by Size of Government**  **a Entity Type**  **Large Small**  **Tota l**  Municipality 29 19 48 State Government 6 0 6 Other Political Subdivision 10 1 11 Tribal Government 0 0 0 Total **45 20**  **65** a Counts of explicitly and implicitly analyzed electric generators; these are not weighted estimates. For details , see EA Appendix H.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 490 of 567 b. Compliance Costs for Electric Generators Owned by Small Government Entities Exhibit X I - 8 presents total, average annualized compliance costs, and maximum annualized compliance costs of the final rule for regulated facilities owned by government (State, local, and Tribal governments) and non - government entities by entitysize cate gory . For the existing unit provision of the final rule, EPA estimates that small government entities will incur a total annualized cost of $ 2. 6 million, compared to the total cost of $ 8.6 million incurred b y large government entities and $ 8.5 million incurred by small private entities. On a per facility basis, EPA estimates that a facility owned b y a small government entity will on average incur a cost of $ 0.2 million with a maximum of $ 0.5 million . The Agency estimates that for a facility o wned b y large government entity , the average cost of the existing provision of the final rule w ill be $ 0.2 million per facility with a maximum of $ 1 . 3 million , while for a facility owned b y a small private entity the average cost will be $ 0. 2 million per facility with a maximum of $ 1 .4 million . 183 Again, overall, EPA concludes that the compliance requirements of the existing unit provision of today ’s rule do not significantly or uniquely

affect small governments in comparison to either large governments or small private entities. For details of this analysis, see the EA Chapter 11 .

183 Excluding Federal government entities and regulated facilities they own.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 491 of 567 **Exhibit XI -**  **8 .**  **Electric generators and complianc e costs by ownership type and size (in millions, 2011 dollars)**  **Ownership type Entity**  **size Number of** 

**facilities (weighted)**  **a Total compliance**  **costs Average cost** 

**per facilit y**  **d Maximum**  **facility cost e**  Final Rule Government (excluding F ederal ) S mall 16 $2. 6 $0.2 $0.5

L arge 37 $ 8.6 $0.2 $1. 3 Private b S mall 53 $ 8.5 $0. 2 $ 1 .4

L arge 423 $ 184.3 $0. 4 $ 5 .0 All Facilities c **544 $**  **220 $0.**  **4 $**  **5 .0**  a Facility counts are weighted estimates and differ from the values reported in Exhibit XI - 7, which are un - weighted counts and reflect information for both explicitly and implicitly analyzed electric generators. Sample - weighted values are reported in this table because costs were developed only for the explicitly analyzed electric generators. For details on development of sample weights, see EA Appendix H. b Facility counts and cost estimates reported f or the private sector include facilities owned by rural electric cooperatives. c Facility counts and cost estimates reported for All Faci lities include facilities owned by the F ederal government and costs estimated for these facilities. d EPA calculated average cost per facility using the total number of regulated facilities owned by entities in a given ownersh ip category. e Reflects maximum of un - weighted costs to explicitly analyzed facilities only. 3. Administrative Costs Section 316(b) requirements are implemented through the NPDES permit program. EPA estimates that 46 States and one territory

—the relevant jurisdictions with NPDES permitting authority under CWA section 402(b)

— will incur costs to administer*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 492 of 567 the f inal r ule. 184 EPA estimates that States and territories will incur costs for implementing the requirements of today ’s rule in four activi ty categories : (1) start - up activities to learn and understand the requirements of today ’s regulation and to implement administrative structures and procedures for adminis tering the regulation; (2) initial permit issuance activities; (3) annual activi ties , including monitoring, reporting and recordkeeping ; and (4) non - annuall y recurring permit - related activities . Exhibit X I - 9 presents total annualized costs for each type of administrative activity . EPA estimates that State and local government entities will incur annualized costs of $ 0 .9 millio n to administer the final rule for electric generators and manufacturers. Monitoring , reporting and recordkeeping costs comp o se the largest share of administrative costs . **Exhibit XI -**  **9 .**  **Annualized government administrative costs (in millions, 2011 dollars)**  **Cost Activity**  **Electric generators Manufacturers**  **Total** Start - up Activities NA NA $0.0 a Initial Permit Issuance Activities $ 0. 2 $0. 2 $ 0.4 Annual Monitoring , Reporting and Recordkeeping Activities $0. 2 $0. 2 $0. 5 Non - Annually Recurring Permit - Related Activities b $0.0 b $0.0 $0. 1 Total **$ 0.**  **5 $0.4**  **$ 0**  **. 9** 

a Costs associated with start - up activities are estimated for both electric generators and manufacturers ; these costs are less

184 F ederal government permitting authorities will also incur costs to administer the rule . As stated earlier in this section, consistent with UMRA analysis requirements, EPA did not account for costs to Federal entities in the UMRA analysis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 493 of 567 than $20,000. b Costs are less than $50,000. **E. Executive Order 13132: Federalism**  Under E.O. 13132, EPA may not issue an action that has federalism implications, that imposes substantial direct compliance costs on the State and local governments , and that is not required b y statute, unless the F ederal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials e arl y i n the process of developing the final rule . Th e final rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of gov ernment, as specified in E.O. 13132.This final rule would not alter the basic State F ederal scheme established in the CWA under which EPA authorizes States to carry out the NPDES permitting program. Prior to this rule, authorized States were require d to issue NPDES permits including requirements for CWI Ss on a case - by- case BPJ basis. 40 CFR. 125.90(b). EPA expects that today ’s rule w ill have little to no effect on the relationship between, or the distribution of power and responsibilities among, the F ederal and State governments.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 494 of 567 EPA estimates an average annual burden of $ 0 . 9 million, for State and local governments to collectively administer the existing unit provision of the final rule. 185 The rule will also impose a compliance cost burden on State and local governments, if those government entities own facilities that are subject to today ’s rule. EPA has identified 5 5 4 regulated facilities that are owned b y State or local government entities; the Agency estimat es that under the existing unit provision of the final rule these facilities will incur an average annual compliance cost of approximately $ 0.2 million per facility . 186 Because this rule does not have federalism implications , the requirements of section 6 of E.O. 13132 do not apply

to this rule. **F. Executive Order 13175: Consultation and Coordination with Indian Tribal**  **Governments** This action does not have Tribal implications, as specified in E.O. 13175 (6 5 FR 67249, November 9, 2000). Itwould not have substantial direct effects on Tribal governments, on the relationship between the F ederal government and the T ribes, or the distribution of power and responsibilities between the F ederal government and Tribes as spec ified in E.O. 13175. The national cooling water intake structure standards would be implemented through permits issued under the NPDES program. No Tribal governments are authori zed pursuant to CWA section 402(b) to implement the NPDES program. In

185 This estimate does not include costs to administer the new unit provision of the final rule; however, EPA expects these costs to be small. 186 Cost values were calculated over the 51 - year analysis period used for analysis of social costs , discounted and annualized using a rate of 7 percent (see EA Chapter s 7 and 11 ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 495 of 567 addition, EPA’s analy ses show that Tribal governments own no facilities subject to today ’s rule ; thus , this rule does not affect Tribes in any way now or in the foreseeable future. Thus, E . O . 13175 does not apply to this action. **G. Executive Order 13045: Protection of Children from Environmental Health**  **Risks and Safety Risks** This action is not subject to E . O . 13045 because it does not establish an environmental standard intended to m itigate health or safety risks. This rule establishes requirements for cooling water intake structures to protect the environment . **H. Executive Order 13211: Actions that Significantly Affect Energy Supply,**  **Distribution, or Use** E.O. 13211 (66 FR 28355 , May 22, 2001) requires EPA to prepare and submit a Statement of Energy

Effects to the Administrator of the Office of Information and Regulatory

Affairs, Office of Management and Budget, for actions identified as significant energy

acti ons . On the basis of the Office of Management and Budget ’s guidance for assessing the potential energy impact of regulations , the Agency anticipate s that today ’s rule may have a significant adverse effect on the suppl y, distribution , or use of energy , thus requiring EPA to include a Statement of Energy Effects . The Agency

assessed the energy

effects of today ’s rule, specifically , the rule’s effect on energy

supply , distribution or use in the electric power sector, as required under E.O. 13211. In its energy - effects assessment, EPA relied on Integrated Planning Mo del (IPM) anal ys es undertaken by EPA for the final rule. Based on that anal ys is, described in Section IX ( D )( 1 )( d) of this preamble (Assessment of the Impacts in the Context of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 496 of 567 Electricity

Markets ) and in more detail in Chapter 6 of the EA report , EPA finds that the compliance requirements of the final rule may affect the electric power sector in way s that would constitute a significant adverse effect under E.O. 13211 , and thus includes a Statement of Energy

Effects in the economic analysis . The Agency ’s anal ys is found that the final rule will not reduce electricity production in excess of 1 billion kWh hours per year (or one thousand GWh) , will not increase the cost of energy pro duction in excess of 1 percent, will not increase dependence on foreign supply of energy , and will not significantl y affect domestic coal production . However , the final rule will result in net retirement of 998 MW of generating capacity , which exceeds 500 MW of installed capaci ty , the threshold of significant adverse effect identified in the OMB Implementation Guidance for E.O. 13211. EPA notes that, with only

one exception, these retirements involve older, less efficient generating units with very low capacity utilization rates . The 998 MW of net retired capacity is replaced b y 589 MW of new capacity ; therefore, because older and less efficient capacity

is replaced by

new, more energy - efficient, and less polluting capacity , these retirements mean that 409 MW less capacity is nee ded to fulfill the same demand. For more detail on the estimated energy effects of the final rule, see Chapter 12 of the EA , which is in the public docket . **I. National Technology Transfer and Advancement Act**  Section 12(d) of the National Technology Trans fer and Advancement Act of 1995, Public L aw No. 104 - 113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless do ing so would be inconsistent with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 497 of 567 applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted b y voluntary consensus standards bodies. The National Technology

Transfer and Advancement Act directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This final rulemaking may involve technical standards , for example, in measuring impingement and entrainment . Nothing in this final rule would prevent the use of voluntary consensus standards for such measurements. EPA encourages permitting authorities and regulated entities to use voluntary consensus standards, where they are available. **J. Executive Order 12898: Federal Actions to Address Environmental Justice in**  **Minority Populations and Low -**  **Income Populations** E . O . 12898 (59 FR 7629 , Feb ruary 16, 1994) establishes F ederal executive policy on environmental justice. It s main provision directs F ederal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by

identifying and addressing, as appropriate, disproportionatel y high and adverse human health or environmental effects of their programs, policies, and activities on minority

populations and low - income populations in the United States. EPA has determined that today ’s rule will not have disproportionately high and adverse human health or environmental effects on minority or low - income populations . Specificall y, the final rule increases the level of environmental protection for all affected*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 498 of 567 populations and has no high and adverse human health or environmental effects on any population, including any min ority or low - income population. Because EPA expects that this final rule will help to preserve the health of aquatic ecos ys tems near regulated facilities , EPA expects that all populations, including minority and low - income populations, will benefit from improved environmental conditions. To meet the objectives of E.O. 12898, EPA assess ed whether today ’s rule could distribute benefits among population subgroups in a way that is significantly less favorable to low - income and minority populations. E PA compared key demographic characteristics of affected substate populations to those demographic characteristics at the State level. If EPA had found that the demographic profile of the sub s tate benefit population is composed of a significantl y lower share of low - income and/or minority populations than the State’s general population , EPA might have assessed the final rule as yi elding an unfavorable distribution of benefits, from the perspective of the public policy principles of E.O. 12898. The two sets of demographic variables of interest for this environmental justice analy sis are race and ethnicity , and annual household income , which are the variables in the Fish Consumption Pathway Module that best capture the mi nority and low - income aspe cts of the affected populations . 188 , 189 EPA compared

188 Annual household income data in the FCP Module are available for the following categories: less than $10,000; $10,000 to $19,999; $2 0,000 to $24,999; $25,000 to $29,999; $30,000 to $34,999; $35,000 to $39,999; $40,000 to $49,999; $50,000 to $74,999; $75,000 to $99,999; and more than $100,000. For this analysis and previous 316(b) rule analyses, these categories were combined into low - and not low - income groups based on the U.S. Department of Health and Human Services’ poverty guidelines for a family of four living in the contiguous United States or D.C. The current ( 2 013) poverty guideline is $ 23,550 , which*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 499 of 567 variable averages at the sub s tate and S tate levels to determine whether the demographic profile of the affected population is consistent with the S tate profile (for details , see EA Chapter 1 2 ). The comparison of minority populations affected by

the regulated facilities to the affected S tates’ overall populations showed no statistically significant difference between these groups. While low - income populations constitute a lower frac tion of the benefit population than of the State’s overall population in many S tates, the two groups are not significantl y different. EPA thus determined that the final rul e does not sy stematically discriminate against, or exclude or deny participation of, the lower income population group or the minority

population group in the benefits of the final r ule in a way

that would be contrary

to the intent of E.O. 12898 . O verall , EPA thus conclude d that the final rule is consistent with the policy intent of E.O. 12898. Anecdotall y, minority (e.g., Native American) and low - income populations might be more likely to include a larger proportion of subsistence fishermen. Because this rule will increase abundance of all fis h species in the areas affected by cooling water intakes, it might provide a benefit to subsistence fishermen. To the extent that minority and low - income populations are over represented in this group, they might especially

benefit from this rule.

falls near the upper end of the $20,000 to $24,999 income range (U.S. HHS, 20 13 ) . For the current analysis, EPA used $25,000 as the threshold for separating populations into low - and not low - i ncome groups . 189 Race and ethnic categories used in the analysis include white non - Hispanic, white Hispanic, black or African American, Asian or Native Hawaiian or Other Pacific Island, and American Indian and Alaska Native.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 500 of 567 **K. Execu**  **tive Order 13158: Marine Protected Areas** E.O. 13158 (65 FR 34909, May 31, 2000) requires EPA to “expeditiously propose new science - based regulations, as necessary , to ensure appropriate levels of protection for the marine environment.” EPA may take action to enhance or expand protection of existing marine protected areas and to establish or recommend, as appropriate, new marine prot ected areas. The purpose of this executive order is to protect significant natural and cultural resources in the marine environment, which means “those areas of coastal and ocean waters, the Great Lakes and their connecting waters, and submerged lands thereunder, over which the United States exercises jurisdiction, consistent with international law.” Today ’s rule recognizes the bi ological sensitivity of tidal rivers, estuaries, oceans, and the Great Lakes , and their susceptibility to adverse environmental impact s from cooling water intake structures. Th e rule provides requirements to minimize adverse environmental impact s for cooli ng water intake structures on these types of waterbodies. EPA used GI S data of the locations of MPAs ( Marine Protected Areas) from the national MPA program ( http://www.mpa.gov/helpful_reso urces/inventory.html ) to locate regulated facilities in MPAs. Under the final rule, 60 percent of regulated facilities in MPAs obtain reductions in impingement mortality . As noted above, because of EPA’s assumption that facilities with impoundment s will not need to install compliance technology , this may

be an underestimate. EPA cannot estimate reductions in entrainment because they

would be based on site - specific determinations of BTA . Therefore, EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 501 of 567 expects that today ’ s r

ule w ill advance the obje ctive of the executive order to protect marine areas. For more details on this analy sis and anal ys is results, see B A Chapter 8 . **L. Congressional Review Act**  The Congressional Review Act, 5 U.S.C. 801 et seq., as added b y the Small Business Regulatory

Enforcement Fairness Act of 1996, generall y provides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which include s a cop y of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A m ajor rule cannot take effect until 60 day s after it is published in the Federal Register. This action is a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective [ **INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]**  . List of Subjects 40 CFR Part 122 Environmental protection, Administrative practice and procedure, Confidential business information, Hazardous substances, Reporting and recordkeeping requirements, Water pollution control. 40 CFR Part 125*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 502 of 567 Environmental protection, Cooling water intake structure, Reporting and recordkeeping requirements, Waste treatment and disposal, Water pollution control. Dated:

_____________________ Gina McCarth y , Administrator. For reasons set out in the preamble, Chapter I of Title 40 of the Code of Federal Regulations is amended as follows: **PART 122 --**  **EP A ADMINISTERED PERMIT PRO**  **GRAMS: THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM**  1. The authority citation for part 122 continues to read as follows: AUTHORITY : The Clean Water Act, 33 U.S.C. 1251 et seq . 2. The suspension of 40 CFR 122.21(r)(1)(ii) and (r)(5), published on July 9, 2007 (72 FR 37109) is lifted. 3. Section 122.21 is amended as follows: a. Revising paragraph (r)(1)(i ). b. Revising paragraph (r)(1)(ii). c . Addin g paragraphs (r)( 4)(ix) through (r)(4)(xii), replacing paragraph (r)(5), and adding paragraphs and (r)( 6) through (r)( 1 4 ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 503 of 567 **§ 122.21 Application for a permit (applicable to State programs, see § 123.25).** * * * * * (r) * * * (1) * * * (i) New facilities with new or modified cooling water intake structures . New facilities (other than offshore oil and gas extraction facilities) with cooling water intake structures as defined in part 125, subpart I of this chapter, must submit to the Director for review the information required under paragraphs (2) (except (r)(2)(iv)), ( 3 ), and ( 4 ) (except (r)(4)(ix), (r)(4)(x ), (r)(4)(xi), and (r)(4)( xii )) of this section and § 125.86 of this chapter as part of the permit application. New offshore oil and gas extracti on facilities with cooling water intake structures as defined in part 125, subpart N, of this chapter that are fixed facilities must submit to the Director for review the information required under paragraphs (r)(2) (except (r)(2)(iv)), (3), and (4) (excep t (r)(4)(ix), (r)(4)(x), (r)(4)(xi) and (r)(4)(xii)) of this section and § 125.136 of this chapter as part of their permit application .* * * (ii) Existing facilities . (A) All existing facilities . The owner or operator of an existing facility defined at 40 CFR 125.92(k) must submit to the Director for review the information required under paragraphs (r)(2 ) and (3) and applicable provisions of paragraphs ( 4 ), (5) , (6), (7) and (8) of this section. (B) Existing facilities greater than 125 mgd AIF. In addition , the owner or operator of an existing facility that withdraws greater than 125 mgd actual intake flow*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 504 of 567 (AIF) , as defined at 40 CFR 125.92 (a), of water for cooling purposes must also submit to the Director for review the information required under paragraphs (r) (9), (10), (11), (12) , and (13) of this section . If the owner or operator of an existing facility intends to comply with the BTA (best technology available) standards for entrainment using a closed - cycle recirculating s ys tem as defined at 40 CFR 125.92(c), the Director may reduce or waive some or all of the in formation required under paragraphs (r)(9) to (13). (C ) Additional information . The owner or operator of an existing facility must also submit such additional information as the Director determines is necessary pursuant to 40 CFR 125.98(i). ( D ) New uni ts at existing facilities. The owner or operator of a n ew unit at an existing facility, as defined at 40 CFR 125.92 (u), must submit or update any information previously

provided to the Director by submitting the information required under paragraphs (r)(2), (3), ( 5), (8), (14) and applicable provisions of paragraphs (r)( 4), ( 6) and ( 7 ). Requests for and approvals of alternative requirements sought under 40 CFR 125.9 4(e)( 2) or 125.98(b)(7) of this chapter must be submitted with the permit application. (E) New units at existing facilities not previously subject to part 125 . The owner or operator of a new unit as defined at 40 CFR 125.92 (u) at an existing facility not previously

subject to part 125 that increases the total capacity of the existing facility

to more than 2 mgd DIF must submit the information required under paragraphs (r)(2), (3), ( 5), (8) and applicable provisions of (r)( 4), ( 6) and (7) of this section at the time of the permit application for the new unit . Requests for alternative requirements under 40 CFR*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 505 of 567 125.9 4(e)( 2) or 125.98(b)(7 ) of this chapter must be submitted with the permit application. If the tot al capacity of the facility will increase to more than 125 mgd AIF, the owner or operator must also submit the information required in paragraphs (r)(9) to (13). If the owner or operator of an existing facility intends to compl y with the BTA (best technol ogy

available) standards for entrainment using a closed - cycle recirculating sy stem as defined at 40 CFR 125.92(c), the Director may reduce or waive some or all of the information required under paragraphs (r)(9) to (13). (F) If the owner or operator of an existing facility plans to retire the facility before the current permit expires, then the requirements of paragraph (r)(1)(ii)(A), (B), (C), (D) and (E) do not apply . (G) If the owner or operator of an existing facility plans to retire the facility after the current permit expires but within one permit cycle, then the Director may waive the requirements of paragraphs (r)(7), (9), (10), (11), (12) and (13) pending a signed certification statement from the owner or operator of the facility specifying the l ast operating date of the facility . (H) All facilities. The owner or operator of any existing facility

or new unit at any existing facility

must also submit with its permit application all information received as a result of any communication with a Fiel d Office of the Fish and Wildlife Service and/or Regional Office of the National Marine Fisheries Service . * * * * * (4) * * **** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 506 of 567 (ix) In the case of the owner or operator of an existing facility or new unit at an existing facility , the Source Water Baseline Biological Characterization Data is the information in (i) through (xii ). ( x ) For the owner or operator of an existing facility, identification of protective measures and stabilization activities that have been implemented, and a description of how these measures and activities affected the baseline water condition in the vicinity of the intake. ( x i ) For the owner or operator of an existing facility, a list of fragile species, as defined at 40 CFR 125.92 (m) , at the facility . The applic ant need onl y identify those species not already identified as fragile at 40 CFR 125.92 (m) . New units at an existing facility are not required to resubmit this information if the cooling water withdrawals for the operation of the new unit are from an ex isting intake. ( xii ) For the owner or operator of an existing facility that has obtained incidental take exemption or authorization for its cooling water intake structure(s) from the U.S. Fish and Wildlife Service or the National Marine Fish eries Service , any information submitted in order to obtain that exemption or authorization may be used to satisfy the permit application information requirement of paragraph 40 CFR 125.95(f) if included in the application. (5) Cooling W

ater System Data. The owner or operator of an existing facility must submit the following information for each cooling water intake structure used or intended to be used:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 507 of 567 (i) A narrative description of the operation of the cooling water s ys tem and its relationship to cooling water intake structures; the proportion of the design intake flow that is used in the sy stem; the number of day s of the year the cooling water sy stem is in operation and seasonal changes in the operation of the system, if applicable; the proportion of design intake flow for contact cooling, non - contact cooling, and process uses; a distribution of water reuse to include cooling water reused as process water, process water reused for cooling, and the u se of gray water for cooling; a description of reductions in total water withdrawals including cooling water intake flow reductions already achieved through minimized process water withdrawals; a descriptio n of any cooling water that is used in a manufacturing process either before or after it is used for cooling, including other recycled process water flows; the proportion of the source waterbody withdrawn (on a monthly basis); (ii ) Design and engineering calculations prepared by a qualified professional and supporting data to support the description required by paragraph (r)(5)(i) of this section; and (iii) D escription of existing impingement and entrainment technologies or operational measures and a summary of their performance, including but not limited to reductions in impingement mortality and entrainment due to intake location and reductions in total water withdrawals and usage. (6) Chosen Method (s

) of Compliance with Impingement Mortality Standard . The owner or operator of the facility must identify the chosen compliance method for the entire facility ; alternatively , the applicant must identify the chosen compliance method*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 508 of 567 for each cooling water intake structure at its facility . The applicant must identify any intake structure for which a BTA determination for Impingement Mortality under 40 CFR 125.94 (c)(11) or (12) is requested. In addition, the owner or operator that chooses to comply via 40 CFR 125.94 (c)(5) or (6) must also submit an impingement technology performance optimization study as described below: (i) If the applicant chooses to comply with 40 CFR 125.94(c) (5) , subject to the flexibility for timing provided in 40 CFR 125.95(a)(2), the impingement technology performance optimization study must include two years of biological data collection measuring the reduction in impingement mortality achie ved b y the modified traveling screens as defined at 40 CFR 125.92 (s) and demonstrating that the operation has been optimized to minimize impingement mortality. A complete description of the modified traveling screens and associated equipment must be includ ed , including, for example, ty pe of mesh, mesh slot size, pressure spray s and fish return mechanisms. A description of any biological data collection and data collection approach used in measuring impingement mortality must be included : (A) Collecting data no less frequentl y than monthly. The Director may establish more frequent data collection ; (B) Biological data collection representative of the impingement and the impingement mortality

at the intakes subject to this provision ; (C) A taxonomic identification to the lowest taxon possible of all organisms collected ;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 509 of 567 (D) The method in which naturally moribund organisms are identified and taken into account ; (E) The method in which mortality due to holding times is taken into account ; (F) If the facility

entraps fish or shellfish, a count of entrapment , as defined at 40 CFR 125.92 (j) , as impingement mortality ; and (G) The percent impingement mortality reflecting optimized operation of the modified traveling screen and all supporting calculations . (ii) If the appli cant chooses to comply with 40 CFR 125.94(c)(6) , the impingement technology performance optimization study must include biological data measuring the reduction in impingement mortality achieved b y operation of the sy stem of technologies, operational measures and best management practices , and demonstrating that operation of the sy stem has been optimized to minimize impingement mortality . This sy stem of technologies, operational measures and best management prac tices may include flow reductions, seasonal operation, unit closure, credit for intake location, and behavioral deterrent sy stems. The applicant must document how each s ys tem element contributes to the sy stem’s performance. The applicant must inc lude a minimum of two ye ars of biological data measuring the reduction in impingement mortality achieved b y the sy stem. The applicant must also include a description of any sampling or data collection approach used in measuring the rate of impingement, impingement mortality, or flow reductions. (A) Rate of Impingement . I f the demonstration relies in part on a credit for reductions in the rate of impingement in the sy stem, the applicant must provide an*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 510 of 567 estimate of those reduc tions to be used as credit towards reducing impingement mortality , and any relevant supporting documentation, including previousl y collected biological data , performance reviews, and previousl y conducted performance studies not already submitted to the Director . The submission of studies more than 10 ye ars old must include an explanation of why

the data are still relevant and representative of conditions at the facility and explain how the data should be interpreted using the definitions of impingement and entrap ment at 40 CFR 125.92 (n) and (j), respectivel y. The estimated reductions in rate of impingement must be based on a comparison of the sy stem to a once - through co oling s ys tem with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source waterbody. For impoundments that are waters of the United States in whole or in part, the facility ’s rate of impingement must be measured at a location within the cooling water intake s ys tem that the Director deems appropriate. In addition, the applicant must include two years of biological data collection demonstrating the rate of impingement resulting from the sy stem. For this demonstration, the applicant must collect data no less frequently than monthly . The Director may establish more frequent data collection . (B) Impingement Mortality . If the demonstration relies in part on a credit for reductions in impingement mortality already obtained at the facility , the applicant must include two years of biological data collection demonstrating the level of impingement mortality the sy stem is capable of ac hieving . The applicant must submit any relevant supporting documentation, including previousl y collected biological data , performance reviews, and previousl y conducted performance studies not already submitted to the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 511 of 567 Director. The applicant must provide a description of any sampling or data collection approach used in measuring impingement mortality . In addition, for this demonstration the applicant must : (1 ) Collect data no less frequently than monthly . The Director may establish more frequent data collection ; (2 ) Conduct biological data collection that is representative of the impingement and the impingement mortality at an intake subject to this provision. In addition, the applicant must describe how the location of the cooling water intake structure in the waterbody and the water column are accounted for in the points of data collection ; (3 ) Include a taxonomic identification to the lowest taxon possible of all organisms to be collected ; (4 ) Describe the method in which naturall y moribund organisms are identified and taken into account ; (5 ) Describe the method in which mortality due to holding times is taken into account ; and (6 ) If the fac ility

entraps fish or shellfish, a count of the entrapment , as defined at 40 CFR 125.92 (j) , as impingement mortality. (C) Flow reduction . If the demonstration relies in part on flow reduction to reduce impingement, the applicant must include two years of intake flows, measured daily , as part of the demonstration, and describe the extent to which flow reductions are seasonal or intermittent. The applicant must document how the flow reduction results in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 512 of 567 reduced impi ngement. Inaddition, the applicant must describe how the reduction in impingement has reduced impingement mortality . (D) Total system performance. The applicant must document the percent impingement mortality

reflecting optimized operation of the total sy stem of technologies, operational measures, and best management practices and all supporting calculations . The total sy stem performance is the combination of the impingement mortality performance reflected in (A), (B), and (C) of this p aragraph. (7) Entrainment Performance Studies . The owner or operator of an existing facility must submit any previously conducted studies or studies obtained from other facilities addressing technology efficacy , through - facility entrainment survival, and other entrainment studies . Any such submittals must include a description of each study , together with underl yi ng data, and a summary of any conclusions or results . Any s tudies conducted at other locations must include an explanation as to why the data from other locations are relevant and representative of conditions at your facility . In the case of studies more than 10 years old, the applicant must explain why the data are still relevant and representative of conditions at the facility and explain how the data should be interpreted using the definition of entrainment at 40 CFR 125.92 (h). (8) Operational S

tatus. The owner or operator of an existing facility must submit a description of the operational status of each generating, production, or process unit that uses cooling water , including but not limited to: (i) For power production or steam generation, d escriptions of individual unit operating status including age of each unit, capacity utilization rate (or equivalent) for the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 513 of 567 previous 5 years , including any extended or unusual outages that significantly affect current data for flow, impingement, entrainment, or other factors , including identification of any operating unit with a capacity utilization rate of less than 8 percent averaged over a 24 - month block contiguous period , and any major upgrades completed within the last 15 years, including but not limited to boiler replacement, condenser replacement, turbine replacement, or changes to fuel ty pe; (ii) Descriptions of completed, approved, or scheduled uprates and Nuclear Regulatory

Commission relicensing status of each unit at nuclear facilities; (i ii) For process units at your facility that use cooling water other than for power production or steam generation, if you intend to use reductions in flow or changes in operations to meet the requirements of 40 CFR 125. 94(c), d escriptions of indiv idual production processes and product lines, operating status including age of each line , seasonal operation, including any extended or unusual outages that significantly affect current data for flow, impingement, entrainment, or other factors , any major upgrades completed within the last 15 years, and plans or schedules for decommissioning or replacement of process units or production processes and product lines ; (iv) For all manufacturing facilities, d escriptions of current and future production schedul es; and (v) Descriptions of plans or schedules for any new units planned within the next 5 years. (9) Entrainment C haracterization S

tudy. The owner or operator of an e xisting facility that withdraws greater than 125 mg d AIF , where the withdrawal of cooling water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 514 of 567 is measured at a location within the cooling water intake structure that the Director deems appropriate, must develop for submission to the Director an Entrainment Characterization Study that includes a minimum of two years of entrainment data collection . The Entrainment Characterization Study must include the following components: ( i ) Entrainment Data Collection M ethod. The study

should identify and document the data collection period and frequency . The study should identify and document organisms collected to the lowest taxon possible of all life stages of fish and shellfish that are in the vicinity of the cooling water intake structure(s) and are susceptible to entrainment , including any organisms identified by the Director , and any species protected under Federal, State, or Tribal l aw , including threatened or endangered species with a habitat range that includes waters in the vicinity of the cooling water intake structure . Biological data collection must be representative of the entrainment at the intakes subject to this provision. The owner or operator of the facility must identify and document how the location of th e cooling water intake structure in the waterbody and the water column are accounted for b y the data collection locations; ( ii ) Biological Entrainment Characterization . Characterization of all life stages of fish, shellfish, and any s pecies protected under Federal, State, or Tribal l aw (including threatened or endangered species), including a description of their abundance and their temporal and spatial characteristics in the vicinity of the cooling water intake structure(s), based on sufficient data to characterize annual, seasonal, and die l variations in entrainment, including but not limited to variations related to climate and weather*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 515 of 567 differences, spawning, feeding , and water column migration. This characterization may i nclude hi storical data that are representative of the current operation of the facility and of biological con ditions at the site. Identification of all lif e stages of fish and shellfish must include identification of any surrogate species used, and identif ication of data representing both motile and non - motile life - stages of organisms; ( iii ) Analysis and Supporting Documentation . Documentation of the current entrainment of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal l aw (including threatened or endangered species). The documentation may i nclude historical data that are represent ative of the current operation of the facility and of biological conditions at the site. Entrainment data to support the facility ’s calculations must be collected during periods of representative operational flows for the cooling water intake structure , and the f lows associated with the data collection must be documented. The method used to determine latent mortality along with d ata for specific organism mortality

or survival that is applied to other life - stages or species must be i dentified. The owner or operator of the facility must identify

and document all assumptions and calculations used to determine the total entrainment for that facility together with all methods and quality assurance/quality control procedures for data collection and data anal ysis. The proposed data collection and data analy sis methods must be appropriate for a quantitative survey . (10) Comprehensive T

echnical F

easibility and C

ost E valuation S

tudy. The owner or o perator of an existing facility that withdraws greater than 125 mgd AIF must develop for submission to the Director an engineering study of the technical feasibility*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 516 of 567 and incremental costs of candidate entrainment control technologies. In addition, the study must include the following: (i) Technical feasibility. An evaluation of the technical feasibility of closed cycle recirculating s ys tems as defined at 40 CFR 125.92(c ), fine mesh screens with a mesh size of 2 millimeters or smaller , and water reuse or alternate sources of cooling water . In addition, this study must include: (A) A description of all technologies and operational measures considered (including alternative designs of clos ed - cycle recirculating s ys tems such as natural draft cooling towers, mechanical draft cooling towers, hy brid designs, and compact or multi cell arrangements); (B) A discussion of land availability , including an evaluation of adjacent land and acres potentiall y available due to generating unit retirements, p roduction unit retirements, other buildings and equipment retirements, and potential for repurposing of areas devoted to ponds, coal piles, rail yards, transmission yards, and parking lots ; (C) A discussion of available sources of process water, grey wat er, waste water, reclaimed water, or other waters of appropriate quantity and quality

for use as some or all of the cooling water needs of the facility ; and ( D ) Documentation of factors other than cost that may make a candidate technology

impractical or infeasible for further evaluation. (ii) Other entrainment control technologies. An evaluation of additional technologies for reducing entrainment may be required by

the Director.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 517 of 567 (iii) Cost evaluations . The study must include engineering cost estimat es of all technologies considered in paragraphs (r)(10)(i) and (ii) of this section. Facility costs must also be adjusted to estimate social costs. All costs must be presented as the net present value (NPV) and the corresponding annual value. Costs must be clearly labeled as compliance costs or social costs. The applicant must separatel y discuss facility level compliance costs and social costs , and provide documentation as follows : (A) Compliance costs are calculated as after - tax, while social costs are calculated as pre - tax. Compliance costs include the facility’s administrative costs, including costs of permit application, while the social cost adjustment includes the Director’s admini strative costs. Any outages, downtime, or other impacts to facility net revenue , are included in compliance costs, while only that portion of lost net revenue that does not accrue to other producers can be included in social costs. Social costs must also b e discounted using social discount rates of 3 percent and 7 percent. Assumptions regarding d epreciation schedules, tax rates, interest rates , discount rates and related assumptions must be identified ; (B) Costs and explanation of any additional facility modifications necessary to support construction and operation of technologies considered in paragraphs (r)(10)(i) and (ii) of this section, including but not limited to relocation of existing buildings o r equipment, reinforcement or upgrading of existing equipment, and additional construction and operating permits. Assumptions regarding d epreciation schedules, interest rates, discount rates, useful life of the technology considered, and any

related assump tions must be identified ; and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 518 of 567 (C) Costs and explanation for addressing any non - water quality environmental and other impacts identified in paragraph (r)(12) of this section. The cost evaluation must include a discussion of all reasonable attempts to mitig ate each of these impacts. (11) Benefits V

aluation S

tudy . The owner or operator of an existing facility that withdraws greater than 125 mgd AIF must develop for submission to the Director an evaluation of the benefits of the candidate entrainment reduction technologies and operational measures evaluated in paragraph (r)(10) including using the Entrainment C haracterization S tudy completed in § 122.21(r)(9) of this section . Each category of benefits must be described narrativel y, and when possible, benefits should be quantified in phy sical or biological units and monetized using appropriate economic valuation methods. The benefi ts valuation study must includ e, but is not limited to , the following elements : (i) Incremental changes in the numbers of individual fish and shellfish lost due to impingement mortality and entrainment as defined in 40 CFR 125.92 , fo r all life stages of each exposed species ; (ii) Description of basis for any estimates of changes in the stock sizes or harvest levels of commercial and recreational fish or shellfish species or forage fish species; (ii i ) Description of bas is for any monetized values assigned to changes in the stock size or harvest levels of commercial and recreational fish or shellfish species, forage fish , and to any other ecos ys tem or no n use benefits;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 519 of 567 ( iv ) A discussion of mitigation efforts completed prior to [ **INSERT effective**  **date of**  **final rule** ] including how long they have been in effect and how effective they have been ; (v) Discussion, with quantification and monetization, where possible, of any other benefits expected to accrue to the environment and local communities, including but not limited to improvements for mammals, birds, and other organisms and aquatic habitats ; (v i) Discussion, with quantification and monetization, where possible, of any benefits expected to result from any reductions in thermal discharges from entrainment technologies. (12) Non - water Quality Environmental and Other Impacts Study. The own er or operator of an existing facility that withdraws greater than 125 mgd AIF must develop for submission to the Director a detailed facility- specific discussion of the changes in non water quality environmental and other impacts attributed to each techno logy and operational measure considered in paragraph (r)(10) of this section, including both impacts increase d and impacts decrease d . The study must include the following: (i) Estimates of changes to energy consumption, including but not limited to auxili ary power consumption and turbine backpressure energy penalty ; (ii) Estimates of air pollutant emissions and of the human health and environmental impacts associated with such emissions; (i ii ) Estimates of changes in noise;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 5 20 of 567 ( i v) A discussion of impacts to safety, including documentation of the potential for plumes, icing, and availability of emergency

cooling water; (v) A discussion of f

acility reliability , including but not limited to facility availability , production of steam, impacts to prod uction based on process unit heating or cooling , and reliability

due to cooling water availability ; (vi) Significant changes in consumption of water, including a facility- specific comparison of the evaporative losses of both once - through cooling and close d - cycle recirculating s ys tems, and documentation of impacts attributable to changes in water consumption; and (vii ) A discussion of all reasonable attempts to mitigate each of these factors . (13) Peer Review . If the applicant is required to submi t studies under § 122.21(r)(10) to (r)(12), the applicant must conduct an external peer review of each report to be submitted with the permit application. The applicant must select peer reviewers and notify

the Director in advance of the peer review . Th e Director may disapprove of a peer reviewer or require additional peer reviewers. The Director may confer with EPA , Federal, State and Tribal fish and wildlife management agencies with responsibility

for fish and wildlife potentially affected b y the c ooling water intake structure, independent s ystem operators, and state public utility regulatory

agencies, to determine which peer review comments must be addressed. The applicant must provide an explanation for any significant reviewer comments not accepted. Peer reviewers must have appropriate qualifications and their names and credentials must be included in the peer review report.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 521 of 567 (14) New U

nits. The applicant must identify the chosen compliance method for the new unit. In addition, the owner or operator that selects the BTA standards for new units at 40 CFR 125.94 (e)(2) as its route to compliance must submit information to demonstrate entrainment reductions equivalent to 90 percent or greater of the reduction that could be achieved through compliance with 40 CFR 125.94(e )(1 ) . The demonstration must include the Entrainment Characterization Study at § 122.21(r)(9). In addition, if data specific to your facil ity indicates that compliance with the requirements of § 125.94 for each new unit would result in compliance costs wholl y out of proportion to the costs EPA considered in establishing the requirements at issue, or would result in significant adverse impact s on local air quality , significant adverse impacts on local water resources other than impingement or entrainment, or significant adverse impacts on local energy markets, you must submit all supporting data as part of § 122.21(r)(14). The Director may

de termine that additional data and information, including but not limited to monitoring, must be included as part of § 122.21(r)(14). **PART 125 --**  **CRITERIA AND STANDARDS FOR THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM**  4. The authority citation for part 125 continues to read as follows: AUTHORITY : The Clean Water Act, 33 U.S.C. 1251 et seq .; unless otherwise noted. **Subpart I --**  **[Amended]** 5. Section 125.84 is amended by : a. Revising paragraph (c) introductory text; and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 522 of 567 b. R evising paragraph (d)(1). The revised text reads as follows: **§ 125.84 As an owner or operator of a new facility, what must I do to comply with**  **this subpart?** * * * * * (c) Track I requirements for new facilities that withdraw greater than 2 mgd and less than 10 mgd and tha t choose not to comply with paragraph (b) of this section. You must comply with all the following requirements: * * * * * (d) * * * (1) You must demonstrate to the Director that the technologies employed will reduce the level of adverse environmental imp act from your cooling water intake structures to a level comparable to that which you would achieve were you to implement the requirements of paragraphs (b)(1) and (2) of this section. This demonstration must include a showing that the impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if yo u were to implement the requirements of paragraphs (b)(1) and (2) of this section. The Director will consider information p rovided b y any fishery management agency and may also consider data and information from other sources. * * * * * 6. Section 125.86 is amended as follows: a. Revise paragraph (a)(1)(ii).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 523 of 567 b. Revise paragraph (b)(3) introductory text. c . Revise paragraph (b)(4)(iii) , leaving subparagraphs (A), (B ), and (C) unchanged . d. Remove and reserve paragraph (c)(2)(ii). e . Remove and reserve paragraph (c)(2)(iv)(C). f . Remove and reserve paragraph (c)(2)(iv)(D)(2). **§ 125.86 As an owner or operator of a new facility, what must I collect and submit**  **when I apply for my new or reissued NPDES permit?** (a) * * * (1) * * * (ii) The Track I requirements for new facilities that withdraw greater than 2 mgd and less than 10 mgd in Sec. 125.84(c); * * * * * (b) * * * (3) Source waterbody flow information. You must submit to the Director the following information to demonstrate that your cooling water intake structure meets the flow requirements in Sec. 125.84(b)(3) or (c)(2). * * * * * (4) * * * (iii) The owner or operator of a new facility required to install design and construction technologies and/or operational measures must develop a plan which explains the technologies and measures selected ; this plan shall be based on information*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 524 of 567 collected for the Source Water Biological Baseline Characterization required by 40 CFR 122.21(r)(4). Examples of appropriate technologies include, but are not limited to, wedgewire screens, fine mesh screens, fish handling and return s ys tems, barrier nets, aquatic f ilter barrier sy stems, etc. Examples of appropriate operational measures include, but are not limited to, seasonal shutdowns or reductions in flow, and continuous operations of screens , etc. The plan must contain the following information: * * * * * 7. Sec tion 125.87 is amended by revising paragraph s (a) introductory text and (a)(2) to read as follows: **§ 125.87 As an owner or operator of a new facility, must I perform monitoring?** * * * * * (a) Biological monitoring. You must monitor both impingement and entrainment of the commercial, recreational, and forage base fish and shellfish species identified in either the Source Water Baseline Biological Characterization data required by 40 CFR 122.21(r)(4) or the Comprehensive Demonstration Study required b y Sec. 125.86(c)(2), depending on whether you chose to comply with Track I or Track II. The monitoring methods used must be consistent with those used for the Source Water Baseline Biological Characterization data required in 40 CFR 122.21(r)(4) or the Comprehen sive Demonstration Study required b y Sec. 125.86(c)(2). You must follow the monitoring frequencies identified below for at least two (2) years after the initial permit issuance. After that time, the Director may approve a request for less frequent sampling in the remaining ye ars of the permit term and when the permit is reissued, if the Director*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 525 of 567 determines the supporting data show that less frequent monitoring would still allow for the detection of any s easonal and dail y variations in the species and number s of individuals that are impinged or entrained. * * * * * (2) Entrainment sampling. You must collect samples at least biweekl y to monitor entrainment rates (simple enumeration) for each species over a 24 - hour period during the primary

period of reproduction, larval recruitment, and peak abundance identified during the Source Water Baseline Biological Characterization required by 40 CFR 122.21(r)(4) or the Comprehensive Demonstration Study required in Sec. 125.86(c)(2). You must collect samples only when the cooling water intake structure is in operation. * * * * * 8. Section 125.89 is amended by revising the introductory text of paragraphs (a), (b)(1)( i) and ( ii) to read as follows: **§ 125.89 As the Director, what must I do to comply with the requ**  **irements of this subpart?**  (a) Permit application. As the Director, you must review materials submitted by the applicant under 40 CFR 122.21(r)( 4 ) and § 125.86 at the time of the initial permit application and before each permit renewal or reissuance. * * * * * (b) * * * (1) * * **** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 526 of 567 (i) If an owner or operator of a facility chooses Track I, you must review the Design and Construction Technology Plan required in Sec. 125.86(b)(4) to evaluate the suitability and feasibility

of the technology

proposed to minimize impingement mortality and entrainment of all life stages of fish and shellfish. In the first permit issued, yo u must put a condition requiring the facility to reduce impingement mortality and entrainment commensurate with the implementation of the technologies in the permit. Under subsequent permits, the Director must review the performance of the technologies imp lemented and require additional or different design and construction technologies, if needed to minimize impingement mortality and entrainment of all life stages of fish and shellfish. In addition, you must consider whether more stringent conditions are re asonabl y necessary

in accordance with Sec. 125.84(e). (ii) If an owner or operator of a facility chooses Track II, you must review the information submitted with the Comprehensive Demonstration Study required in Sec. 125.86(c)(2) and evaluate the suitabi lity of the proposed design and construction technologies and operational measures to determine whether they will reduce both impingement mortality

and entrainment of all life stages of fish and shellfish to 90 percent or greater of the reduction that coul d be achieved through Track I. In addition, yo u must review the Verification Monitoring Plan in Sec. 125.86(c)(2)(iv)(D) and require that the proposed monitoring begin at the start of operations of the cooling water intake structure and continue for a suff icient period of time to demonstrate that the technologies and operational measures meet the requirements in Sec. 125.84(d)(1). Under subsequent permits, the Director must review the performance of the additional and/or different*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 527 of 567 technologies or measures u sed and determine that they reduce the level of adverse environmental impact from the cooling water intake structures to a comparable level that the facility

would achieve were it to implement the requirements of Sec. 125.84(b)(1) and (2). * * * * * 9. The suspension of 40 CFR 125.9 0(a), (c) and (d), and 125.91 through 125.99, published on July

9, 2007 (72 FR 37109) is lifted. 10. Subpart J to part 125 is revised to read as follows: **Subpart J --**  **Requirements Applicable to Cooling Water Intake Structures for**  **Existing Facilities Under Section 316(b) of the Clean Water Act** Sec. 125.90 Purpose of this subpart. 125.91 Applicability . 125.92 Special definitions. 125.93 [Reserved.] 125.94 As an owner or operator of an existing facility , what must Ido to comply with this subpart? 125.95 Permit application and supporting information requirements. 125.96 Monitoring requirements. 125.97 Other permit reporting and recordkeeping requirements. 125.98 Director requirements. 125.99 [Reserved . ]*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 528 of 567 **Subpart J --**  **Requi rements Applicable to Cooling Water Intake Structures for**  **Existing Facilities Under Section 316(b) of the Clean Water Act § 125.90 Purpose of this subpart.**  (a) This subpart establishes the section 316(b) requirements that appl y to cooling water intake structures at existing facilities that are subject to this subpart. These requirements include a number of components. These include standards for minimizing adverse environmental impact associated with the use of cooling water intake structures and required procedures (e.g., permit application requirements, information submission requirements) for establishing the appropriate technology requirements at certain s pecified facilities as well as monitoring, reporting, and recordkeeping requirements to demonstrate compliance. In combination, these components represent the best technology available for minimizing adverse environmental impact associated with th e use of cooling water intake structures at existing facilities . These requirements are to be established and implemented in National Pollutant Discharge Elimination System (NPDES) permits issued under the Clean W ater Act (CWA). (b) Cooling water intake structures not subject to requirements under **§** 125.9 4, et seq. of this Subpart , Subpart I , or Subpart N of this part must meet requirements under section 316(b) of the CWA established b y the Director on a case - b y- case, best professional judgment (BPJ) basis. (c) Nothing in this subpart shall be construed to preclude or deny the right under section 510 of the CWA of any State or political subdivision of a State or any interstate*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 529 of 567 agency to adopt or enforce any requirement with respect to control or abatement of pollution that is more stringent than required b y Federal law. [ N OTE : This regulation does not authorize take, as defined b y the Endangered Species Act, 16 USC 1532(19). The U.S. Fish and Wildlife Service and National Marine Fisheries Service have determined that any impingement (including entrapment) or entrainment of Federall y- listed species constitute s take. Such take may be authorized pursuant to the conditions of a permit issued under 16 U.S.C. 1539(a) or where consistent with an Incidental Take Statement contained in a Biological Opinion pursuant to 16 U.S.C. 1536(o).] **§ 125.91 Applicability.** (a) The owner or operator of an existing facility , as defined in **§** 125. 92 (k) , is subject to the requirements at 125.94 et seq. of this subpart if: (1) The facility is a point source; (2) The facility

uses or proposes to use one or more cooling water intake structures with a cumulative design intake flow (DIF) of greater t han 2 million gallons per day (mg d) to withdraw water from waters of the United States; and (3) Twenty- five percent or more of the water the facility withdraws on an a ctual i ntake f low basis is used exclusively for cooling purposes. (b) Use of a cooling water intake structure includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the independent supplier withdraws water from waters of the United States but is not itself a new or e xisting facility as defined in subparts I or J of this part, except as*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 530 of 567 provided in paragraphs (c) and (d) of this section. An owner or operator of an existing facility may not circumvent these requirements by creating arrangements to receive cooling water from an entity that is not itself a facility subject to subparts I or J of this part. (c) O btaining cooling water from a public water sy stem, using reclaimed water from wastewater treatment facilities or desalination plants, or recycling treated process w astewater effluent as cooling water does not constitute use of a cooling water intake structure for purposes of this subpart . (d) This subpart does not apply to offshore seafood processing facilities, offshore liquefied natural gas terminals, and offshore oil and gas extraction facilities that are existing facilities as defined in § 125.92 (k) . The owners and operators of such facilities must meet requirements established by the Director on a case - by- case, best professional judgment (BPJ) basis. **§ 125.92 Special definitions.**  In addition to the definitions provided in 40 CFR 122.2 of this chapter, the following special definitions apply to this subpart: (a) Actual Intake Flow (AIF) means the average volume of water withdrawn on an annual basis b y the cooling water intake structures over the past three ye ars. After **[INSERT date**  **5 years**  **after effective date of the final rule**  **]** , Actual Intake Flow means th e average volume of water withdrawn on an annual basis by the cooling water intake structures over the previous five ye ars . Actual intake flow is measured at a location within the cooling water intake structure that the Director deems appropriate. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 531 of 567 calculation of a ctual i ntake f low includes day s of zero flow. A IF does not include flow s associated with emergency and fire suppression capacity. (b) All life stages of fish and shellfish means eggs, larvae, juveniles, and adults. It does not includ e members of the infraclass Cirripedia in the subphylum Crustacea (barnacles), green mussels ( Perna viridis ), or zebra mussels ( Dreissena polymorpha ). The Director may

determine that all life stages of fish and shellfish does not include other specified nuisance species. (c) Closed

- cycle recirculating system means a s ys tem designed and properly operated using minimized make - up and blowdown flows withdrawn from a water of the United States to support contact or non - contact cooling uses within a facility , or a sy stem designed to include certain impoundments . A closed - cycle recirculating s ys tem passes cooling water through the condenser and other compo nents of the cooling sy stem and reuses the water for cooling multiple times. (1) Closed

- cycle recirculating system include s a facility with wet , dry , or hy

brid cooling towers , a s ys tem of impoundments that are not waters of the Unit ed States, or any combination thereof

. A properl y operated and maintained closed - cycle recirculating sy stem withdraws new source water (make - up water) onl y to replenish losses that have occurred due to blowdown, drift, and evaporation. If waters of the Uni ted States are withdrawn for purposes of replenishing losses to a closed - cycle recirculating s ys tem other than those due to blowdown, drift, and evaporation from the cooling sy stem, the Director may

determine a cooling s ys tem is a closed - cycle recirculatin g s ys tem if the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 532 of 567 facility demonstrates to the satisfaction of the Director that make - up water withdrawals attributed specifically

to the cooling portion of the cooling s ys tem have been minimized. (2) Closed

- cycle recirculating system also includes a sy stem with impoundments of waters of the U.S. where the impoundment was constructed prior to **[INSERT effective date of the final rule]** and created for the purpose of serving as part of the cooling water sy stem as documented in the project purpose statement for any required Clean Water Act section 404 permit obtained to construct the impoundment. In the case of an impoundment whose construction pre - dated the CWA requirement to obtain a section 404 permit, documentation of the project’s purpose must be demonstrated to the satisfaction of the Director. This documentation could be some other license or permit obtained to lawfully construct the impoundment for the purposes of a coo ling water s ys tem , or other such evidence as the Director finds necessary . For impoundments constructed in uplands or not in waters of the United States, no documentation of a section 404 or other permit is required. If waters of the United States are with drawn for purposes of replenishing losses to a closed - cycle recirculating s ys tem other than those due to blowdown, drift, and evaporation from the cooling sy stem, the Director may

determine a cooling s ys tem is a closed - cycle recirculating s ys tem if the fac ility demonstrates to the satisfaction of the Director that make - up water withdrawals attributed specifically

to the cooling portion of the cooling s ys tem have been minimized. (d) Contact cooling water means water used for cooling which comes into direct contact with any

raw material, product, or by product. Examples of contact cooling water may

include but are not limited to quench water at facilities , cooling water in a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 533 of 567 cracking unit, and cooling water directl y added to food and agricultural products processing. (e) Cooling water means water used for contact or non - contact cooling, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The intended use of the cool ing water is to absorb waste heat rejected from the process or processes used, or from auxiliary operations on the facility ’s premises. Cooling water obtained from a public water s ys tem, reclaimed water from wastewater treatment facilities or desalination plants, treated effluent from a manufacturing facility , or cooling water that is used in a manufacturing process either before or after it is used for cooling as process water, is not considered cooling water for the purposes of calculating the percentage of a facility ’s intake flow that is used for cooling purposes in § 125.91(a)(3). (f) Cooling water intake structure means the total phy sical structure and any associated constructed waterway s used to withdraw cooling water from waters of the United States. The cooling water intake structure extends from the point at which water is first withdrawn from waters of the United States up to, and including the intake pumps. (g) Design intake flow (DIF) means the value assigned during th e cooling water intake structure design to the maximum instantaneous rate of flow of water the cooling water intake s ys tem is capable of withdrawing from a source waterbody . The facility’s DIF may be adjusted to reflect permanent changes to the maximum cap abilities of the cooling water intake s ys tem to withdraw cooling water, including pumps permanentl y removed from service, flow limit devices, and physical limitations of the piping. DIF*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 534 of 567 does not include values associated with emergency and fire suppression capacity or redundant pumps (i.e., back - up pumps). (h) Entrainment means any life stages of fish and shellfish in the intake water flow entering and passing through a cooling water intake structure and into a cooling water s ys tem , including the condenser or heat exchanger . Entrainable organisms include any organisms potentially

subject to entrainment . For purposes of this subpart, entrainment ex cludes those organisms that are collected or retained b y a sieve with maximum opening dimension of 0.56 inches. Examples of sieves meeting this definition include but are not limited to a 3/8 inch square mesh, or a 1⁄2 b y 1⁄4 inch mesh . A facility must use the same mesh size when co unting entrainment as is used when counting impingement. (i) Entrainment mortality means death as a result of entrainment through the cooling water intake structure, or death as a result of exclusion from the cooling water intake structure b y fine mesh s creens or other protective devices intended to prevent the passage of entrainable organisms through the cooling water intake structure. (j) Entrapment means the condition where impingeable fish and shellfish lack the means to escape the cooling water intake . Entrapment includes but is not limited to: organisms caught in the bucket of a traveling screen and unable to reach a fish return; organisms caught in the forebay of a cooling water intake sy stem without any means of being returned to the source waterb ody without experiencing mortality; or cooling water intake sy stems where the velocities in the intake pipes or in any channels leading to the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 535 of 567 forebay prevent organisms from being able to return to the source waterbody through the intake pipe or channel. (k) Existing facility means any facility that commenced construction as described in 40 CFR 122.29(b)(4) on or before January 17, 2002 (or July

17, 2006 for an offshore oil and gas extraction facility) and any m odificati on of, or any addition of a unit at such a facility . A facility built adjacent to another facility would be a new facility while the original facility would remain as an exiting facility for purposes of this subpart. A facility cannot both be an existing facility and a new facility as defin ed at § 125.83. (l) Flow reduction means any modification to a cooling water intake structure or its operation that serves to reduce the volume of cooling water withdrawn. Examples include, but are not limited to, variable speed pumps, seasonal flow reduc tions, wet cooling towers, dry

cooling towers, hy

brid cooling towers, unit closures , or substitution for withdrawals by

reuse of effluent from a nearb y facility. (m) Fragile species means those species of fish and shellfish that are least likely to surviv e any form of impingement. For purposes of this subpart, fragile species are defined as those with an impingement survival rate of less than 30 percent, including but not limited to alewife , American shad , Atlantic herring , Atlantic long - finned squid , Atlantic menhaden, bay

anchovy , blueback herring , bluefish , butterfish , gizzard shad , grey snapper, hickory

shad , menhaden , rainbow smelt , round herring , and silver anchov y . (n) Impingement means the entrapment of any life stages of fish and shellfish on the outer part of an intake structure or against a screening device during periods of intake water withdrawal. For purposes of this subpart, impingement includes those organisms*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 536 of 567 collected or retain ed on a sieve with maximum distance in the opening of 0.56 inches , and excludes those organisms that pass through the sieve. Examples of sieves meeting this definition include but are not limited to a 3/8 inch square mesh, or a 1⁄2 by 1⁄4 inch mesh . This defin ition is intended to prevent the conversion of entrainable organisms to counts of impingement or impingement mortality. The owner or operator of a facility must use a sieve with the same mesh size when counting entrainment as is used when counting impingem ent. (o) Impingement mortality (IM) means death as a result of impingement . Impingement mortality

also includes organisms removed from their natural ecos ys tem and lacking the ability to escape the cooling water intake sy stem, and thus subje ct to inevitable mortality . (p) Independent supplier means an entity, other than the regulated facility, that owns and operates its own cooling water intake structure and directl y withdraws water from waters of the United States. The supplier provides the cooling water to other facilities for their use, but may itself also use a portion of the water. An entity that provides potable water to residential populations (e.g., public water s ys tem) is not a supplier for purposes of this subpart. (q) Latent morta lity means the delayed mortality of organisms that were initially alive upon being impinged or entrained but that do not survive the delayed effects of impingement and entrainment during an extended holding period. Delayed effects of impingement and entrainment include but are not limited to temperature change, ph ys ical stresses, and chemical stresses.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 537 of 567 (r) Minimize means to reduce to the smallest amount, extent, or degree reasonabl y possible. (s) Modified traveling screen means a traveling water screen th at incorporates measures protective of fish and shellfish, including but not limited to: screens with collection buckets or equivalent mechanisms designed to minimize turbulence to aquatic life; addition of a guard rail or barrier to prevent loss of fish f rom the collection sy stem; replacement of screen panel materials with smooth woven mesh, drilled mesh, molded mesh, or similar materials that protect fish from descaling and other abrasive injury ; continuous or near - continuous rotation of screens and operation of fish collection equipment to ensure any impinged organisms are recovered as soon as practical; a low pressure wash or gentle vacuum to remove fish prior to any high pressure spray to remove debris from the screens; and a fish handling and return s y stem with sufficient water flow to return the fish directly to the source water in a manner that does not promote predation or re - impingement of the fish , or require a large vertical drop . The Director may

approve of fish being return ed to water sources other than the original source water , taking into account any recommendations from the Services with respect to endangered or threatened species . Examples of modified traveling screens include, but are not limited to: modified Ristroph screens with a fish h andling and return sy stem, dual flow screens with smooth mesh, and rotary screens with fish returns or vacuum returns . (t) Moribund means dyi ng; close to death. (u) New unit means a new “stand - alone” unit at an existing facility where construction of the new unit begins after **[INSERT effective date of the final rule ]**  and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 538 of 567 that does not otherwise meet the definition of a new facility at § 125.83 or is not otherwise already subject to Subpart I of that section . A stand - alone unit is a separate unit that is added to a facility for either the same general industrial operation or another purpose. A new unit may have its own dedicated cooling water intake structure , or the new unit may

use an existing or modified cooling water intake structure. (v) Offshore velocity cap means a velo city cap located a minimum of 800 feet from the shoreline . A velocity cap is an open intake designed to change the direction of water withdraw al from vertical to horizontal, thereby creating horizontal velocity patterns that result in avoidance of the intake by fish and other aquatic organisms. For purposes of this subpart, the velocity

cap must use bar screens or otherwise exclude marine mammals , sea turtles, and other large aquatic organisms. (w) Operational measure means a modification to any operation th at serves to minimize impact to all life stages of fish and shellfish from the cooling water intake structure. Examples of operational measures include, but are not limited to, more frequent rotation of traveling screens, use of a low pressure wash to remo ve fish prior to any high pressure spray

to remove debris, maintaining adequate volume of water in a fish return, and debris minimization measures such as air sparging of intake screens and/or other measures taken to maintain the design intake velocity. (x) Social benefits means the increase in social welfare that results from taking an action. Social benefits include private benefits and those benefits not taken into consideration b y private decision makers in the actions they choose to take, including e ffects occurring in the future. Benefits valuation involves measuring the phy sical and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 539 of 567 biological effects on the environment from the actions taken. Benefits are generall y treated one or more of three way s: a narrative containing a qualitative discussion of environmental effects, a quantified anal ys is expressed in phy sical or biological units, and a monetized benefits analysis in which dollar values are appli ed to quantified phy sical or biological units. The dollar values in a social benefits anal ys is are based on the principle of willingness - to - pay (WTP) , which captures monetary benefits by measuring what individuals are willing to forgo in order to enjoy a particular benefit. Willingness - to - pay for nonuse values can be measured using benefits transfer or a stated preference survey . (y) Social costs means costs estimated from the viewpoint of society, rather than individual stakeholders. Social cost represents the total burden imposed on the econom y; it is the sum of all opportunity costs incurred associated with taking actions. These opportunity

costs consist of the value lost to society of all the goods and services that will not be produced and consumed as a facility complies with permit requirements, and society reallocates resources away from other production activities and towards minimizing adverse environmental impacts. **§ 125.93 Reserved. § 125.94 As an owner or operator of an existing facility, what**  **must I do to comply with this subpart?**  (a) Applicable B est T

echnology A vailable for Minimizing Adverse Environmental Impact (BTA) standards. (1) On or after **[INSERT effective date of final rule]** , the owner or operator of an exis ting facility

with a cumulative design intake flow (DIF) greater than 2 mgd is*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 540 of 567 subject to the BTA (best technology available) standards for impingement mortality under paragraph ( c ) , and entrainment under paragraph (d) including any measures to protect Federally- listed threatened and endangered species and designated critical habitat established under paragraph (g ) of this section . (2) Prior to **[INSERT effective date of final rule]** , the owner or operator of an existing facility with a cumulative design intake flow (DIF) greater than 2 mgd is subject to site - specific impingement mortality and entrainment requirements as determined by the Director on a case - by - case Best Professional Judgment basis . The Director’s BTA d etermination may

be based on consideration of some or all of the factors at § 125.98 (f)(2) and (3) and the requirements of § 125.94(c). If the Director requires additional information to make the decision on what B TA requirements to include in the applicant’s permit for impingement mortality and entrainment, the Director should consider whether to require any of the information at 40 CFR 122.21(r). (3) The owner or operator of a new unit is subject to the impingement mortality and entrainment standards under paragraph (e) for all cooling water intake flows used by the new unit. The remainder of the existing facility is subject to the impingement mortality standard under paragraph ( c ) , and the entrainment standard under paragraph ( d) of this section. The entire existing facility including any new units is subject to any measures to protect Federally- listed threatened and endangered species and de signated critical habitat established under paragraph (g ) of this section . (b) Compliance with BTA standards .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 541 of 56 7 (1) Aligning compliance deadlines for impingement mortality and entrainment requirements . After issuance of a final permit that establishes the entrainment requirements under § 125.94 (d), the owner or operator of an existing facility must comply with the impingement mortality

standard in paragraph § 125.94 ( c ) as soon as practicable . The Director may

establish interim compliance milestones in the permit. (2) After issuance of a final permit establishing the entrainment requirements under § 125.94 (d), the owner or operator of an existing facility must comply with the entrainment standard as soon as practicable , based on a schedule of requirements established by

the Director. The Director may establish interim compliance milestones in the permit. (3) The owner or operator of a new unit at an existing facility must comply with the BTA standards at § 125.94 ( e ) with respect to the new unit upon commencement of the new unit’s operation. ( c ) BTA Standards for Impingement Mortality. The owner or operator of an existing facility must comply with one of the alternatives in (c)(1) through (c)(7) below, except as provided in (c)( 11) or (c)(12 ), when approved b y the Director. In addition, a facility may also be subject to the requirements of (c)(8), (c)(9), or ( g ) of this section if the Director requires such additional measures.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 542 of 567 ( 1 ) Closed

- cycle recirculating system . A facility must operate a closed - cycle recirculating s ys tem as defined at § 125.92 (c). In addition, you must monitor the actual intake flows at a minimum frequency of dail y. The monitoring must be representative of normal operating conditions, and must include measuring cooling water withdrawals, make - up water, and blow down volume. In lieu of daily intake flow monitoring, you may monitor your cycles of concentration at a minimum frequency of dail y; or ( 2 ) 0.5 Feet Per Second Through - Screen Design Velocity . A facility must operate a cooling water intake structure that has a maximum design through - screen intake velocity of 0.5 feet per second . The owner or operator of the facility must submit information to the Director that demonstrates that the maximum design intake velocity as water passes through the structural components of a screen measured perpendicular to the screen mesh does not exceed 0.5 feet per second. The maximum velo city must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using h ydrological data) and during periods of maximum head loss across the screens or other devices during normal operation of the intake structure ; or ( 3 ) 0.5 Feet Per Second Through - Screen Actual Velocity. A facility must operate a cooling water intake structure that has a maximum through - screen intake velocity of 0.5 feet per second . The owner or operator of the facility must submit information to the Director that demonstrates that the maximum intake velocity as water passes through the structural components of a screen measured perpendicular to the screen mesh does not exceed 0.5 feet per second. The maximum velocity must be achieved under all conditions, including during minimum ambient source water surface*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 543 of 567 elevations (based on best professional judgment using hydrological data) and during periods of maximum head loss across the screens or other devices during normal o peration of the intake structure. The Director may authorize the owner or operator of the facility to exceed the 0.5 fps velocity at an intake for brief periods for the purpose of maintaining the cooling water intake s ys tem, such as backwashing th e screen face. If the intake does not have a screen, the maximum intake velocity perpendicular to the opening of the intake must not exceed 0.5 feet per second during minimum ambient source water surface elevations. In addition, you must monitor the ve locity at the screen at a minimum frequency of dail y. In lieu of velocity monitoring at the screen face, you may calculate the through - screen velocity using water flow, water depth, and the screen open areas; or (4) Existing offshore velocity cap . A facil ity must operate an existing offshore velocity cap as defined at § 125.92 (v) that was installed on or before **[INSERT effective date of rule]**  . Offshore velocity caps installed after [ **INSERT effective date of rule]** must make either a demonstration under paragraph (6) or meet the performance standard under paragraph (7). In addition, you must monitor your intake flow at a minimum frequency of dail y; or (5) Modified traveling screens . A facility must operate a modified traveling screen that the Director determines meets the defin ition at § 125.92 (s) and that, after review of the information required in the impingement technology performance optimization study at 40 CFR 122.21(r)(6) (i) , the Director determines is the best t echnology

available for impingement reduction at the site . As the basis for the Director’s determination, the owner or operator of the facility must demonstrate the technology is or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 544 of 567 will be optimized to minimize impingement mortality of all non - fra gile species . The Director must include verifiable and enforceable permit conditions that ensure the technology

will perform as demonstrated; or (6) Systems of technologies as the BTA for impingement mortality. A facility must operate a s ys tem of technologies, management practices, and operational measures, that, after review of the information required in the impingement technology performance optimization study at 40 CFR 122.21(r)(6) (ii) , the Director determine s is the best technology

available for impingement reduction at your cooling water intake structures. As the basis for the Director’s determination, the owner or operator of the facility must demonstrate the s ys tem of technology has been optimized to minim ize impingement mortality of all non - fragile species . In addition, the Director’s decision will be informed by comparing the impingement mortality performance data under 40 CFR 122.21(r)(6)(ii) (D) to the impingement mortality performance standard that woul d otherwise appl y under paragraph (7) . The Director must include verifiable and enforceable permit conditions that ensure the s ys tem of technologies will perform as demonstrated; or ( 7 ) Impingement mortality performance standard . A facility

must achieve a 12 - month impingement mortality performance standard of all life stages of fish and shellfish of no more than 2 4 percent mortality, including latent mortality , for all non - fragile species together that are collected or retained in a sieve with m aximum opening dimension of 0.56 inches and kept for a holding period of 18 to 96 hours. The Director may , however, prescribe an alternativ e holding period. You must conduct biological*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 545 of 567 monitoring at a minimum frequency of monthly to demonstrate your impingement mortality performance . Each month, you must use all of the mo nitoring data collected during the previous 12 months to calculate the 12 - month survival percentage. The 12 - month impingement mortality performance standard is the total number of fish killed divided by

the total number of fish impinged over the course of the entire 12 months . The owner or operator of the facility must choose whether to demonstrate compliance with this requirement for the entire facility , or for each individual cooling water intake structure for which (c)(7) is the selected impingement mortality requirement . ( 8 ) A dditional measures for shellfish . The owner or operator must compl y with any additional measures , such as seasonal deplo yment of barrier nets, established by the Director to protect shellfish . ( 9 ) Additional measures for other species . The owner or operator must comply with any ad ditional measures , established b y the Director, to protect f ragile species . (10) R euse of other water for cooling purposes . This impingement mortality standard does not appl y t o that portion of cooling water that is process water, gray water, waste water, reclaimed water, or other waters reused as cooling water in lieu of water obtained by

marine, estuarine, or freshwater intakes. (1 1 ) De minimis rate of impingement . In limited circumstances, rates of impingement may

be so low at a facility

that additional impingement controls may not be justified. The Director, based on review of site - specific data submitted under 40 CFR 122.21(r), may

conclude that the documented rate of impingement at the cooling water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 546 of 567 intake is so low that no additional c ontrols are warranted. For threatened or endangered species, all unauthorized take is prohibited by the Endangered Species Act of 1973 ( 16 U.S.C. § 1531 et seq.) . Notice of a determination that no additional impingement controls are warranted must be included in the draft or proposed permit and the Director’s response to all comments on th is determination must be included in the record for the final permit. ( 12 ) Low capacity utilization power generating units . If an existing facility has a cooling water intake structure used for one or m ore existing electric generating units , each with an annual average capacity utilization rat e of less than 8 percent averaged over a 24 - month block contiguous period , the owner or operator may request the Director consider less stringent requirements for impingement mortality for that cooling water intake structure. The Director may , based on review of site - specific data concerning cooling water s ys tem data under 40 CFR 122.21(r)(5), establish the BTA standard s for impingement mortality

for that cooling water intake structure that are less stringent than (c)(1) through (c)(7) above. ( d) BTA standards for entrainment for existing facilities. The Director must establish BTA standards for entrainment for each intake on a site - specific basis. These standards must reflect the Director’s determination of the maximum reduction in entrainment warranted after consideration of the relevant factors as specified in § 125.98 . The Director may

also require periodic reporting on your progress towards installation and operation of site - specific entrainment controls . These reports may include updates on planning, design, and construction or other appropriate topics as required by the Director .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 547 of 567 If the Director determines that the site - specific BTA standard for entrainment under this paragraph requires performance equivalent to a closed - cycle recirculating s ystem as defined at § 125.92 (c) , then under § 125.94(c)(1) your facility will comply with the impingement mort ality standard for that intake . ( e ) BT A standards for impingement mortality and entrainment for new units at existing facilities. The owner or operator of a new unit at an existing facility must achieve the impingement mortality and entrainment standards provided in either paragraph ( e )(1) or ( e )(2) of this section , except as provided in paragraph (e)( 4 ) of this section , for each cooling water intake structure used to provide cooling water to the new unit . (1) R equirements for new units . The owner or operator of the facility must reduce the design intake flow for the new unit, at a minimum, to a level commensurate with that which can be attained by the use of a closed - cycle recirculating s ystem for the same level of cooling for the new unit . (2) Alternative requirements for new units. The owner or operator of a new unit at an existing facility

must demonstrate to the Director that the technologies and operational measures employed will reduce the level of adverse environmental impact from any cooling water intake structure used to supply cooling water to the new unit to a comparable level to that which would be achieved under § 125.94(e)(1). This demonstration must include a showing that the entrainment reduction is equivalent to 90 percent or greater of the reduction that could be achieved throu gh compliance with § 125.94 (e )(1 ). In addition this demonstration must include a showing that the impacts to fish and shellfish, including important forage and predator species, within the watershed*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 548 of 567 will be comparable to those which w ould result under the requirements of § 125.94(e)(1). (3) This standard does not apply to: (i) Process water, gray

water, waste water, reclaimed water, or other waters reused as cooling water in lieu of water obtained by marine, estuarine, or freshwater intakes; (ii) Cooling water used by manufacturing facilities for contact cooling purposes; (iii) Portions of those water withdrawals for auxiliary plant cooling uses comprising less than two mgd of the facility’s flow ; and (iv) Any quantity of emergency back - up water flows. (4) The owner or operator of a facility must comply

with any alternative requirements established by the Director pursuant to § 125.98(b)( 7 ). ( 5 ) For cooling water flows excluded by paragraph (e ) (3) of this section, the Director may

establish additional BTA standards for impingement mortality an d entrainment on a site - specific basis. ( f ) Nuclear facilities. If the owner or operator of a nuclear facility demonstrates to the Director, upon the Director’s consultation with the Nuclear Regulatory Commission , the Department of Energy , or the Naval Nu clear Propulsion Program , that compliance with this subpart would result in a conflict with a safety requirement established by

the Commission , the Department, or the Program , the Director must make a site - specific determination of best technology availabl e for mi nimizing adverse*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 549 of 567 environmental impact that would not result in a conflict with the Commission’s , the Department’s, or the Program’s safety requirement. (g) Additional measures to protect Federally- listed threatened and endangered species and designated critical habitat . The Director may establish in the permit additional control measures , monitoring requirements, and reporting requirements that are designed to minimize incidental take, reduce or remove more than minor detrimental effects to F ederall y- listed species and designated critical habitat , or avoid jeopardizing Federall y- listed species or destro yi ng or adversel y modifying designated critical habitat (e.g., prey base). Such control measures, monitoring requirements, and reporting requi rements may

include measures or requirements identified by an appropriate Field Office of the U.S. Fish and Wildlife Service and/or Regional Office of the National Marine Fisheries Service during the 60 day review period pursuant to § 125.98(h) or the publ ic notice and comment period pursuant to 40 CFR 124.10. Where established in the permit by the Director , the owner or operator must implement any such requirements. (h) Interim BTA requirements . An owner or operator of a facility may be subject to interi m BTA requirements established by the Director in the permit on a site - specific basis. ( i ) More stringent standards. The Director must establish more stringent requirements as best technology available for minimizing adverse environmental impact if the D irector determines that compliance with the applicable requirements of this section would not meet the requirements of applicable State or Tribal law, including compliance with applicable water quality standards (including designated uses, criteria,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 550 of 567 and antidegradation requirements ). ( j ) The owner or operator of a facility subject to this subpart must: (1 ) Submit and retain permit application and supporting information as specified in § 125.95; (2) Conduct compliance monitoring as specified in § 125.96; and (3) Report information and data and keep records as specified in § 125.97. **§ 125.95 Permit application and supporting information requirements.**  (a) Permit application submittal timeframe for existing facilities. (1) The owner or operator of a facility subject to this subpart whose currently effective permit expires after **[INSERT date 45 months after effective date of the final**  **rule]** , must submit to the Director the information required in the applicable provisions of 40 CFR 122.21(r) when applying for a subsequent permit (consistent with the owner or operator’s duty to reapply pursuant to 40 CFR 122.21(d)) . (2) The owner or operator of a facility subject to this subpart whose currently effective permit expires prior to or on **[INSERT date 45 months after effective date of**  **the final rule]** , may

request the Director to establish an alternate schedule for the submission of the information required in 40 CFR 122.21(r) when appl yi ng for a subsequent permit (consistent with the owner or operator’s duty to reappl y pursuant to 40 CFR 122.21(d)). If the owner or operator of the facility demonstrates that it could not develop the required information by the applicable date f

or submission , the Director must establish an alternate schedule for submission of the required information.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 551 of 567 (3 ) The Director may

waive some or all of the information requirements of 40 CFR 122.21(r) if the intake is located in a manmade lake or reservoir and the fisheries are stocked and managed b y a State or Federal natural resources agency or the equivalent. If the manmade lake or reservoir contains Federally- listed threatened and endangered species, or is designated critical habitat, such a waiver shal l not be granted. (b ) Permit application submittal timeframe for new units. For the owner or operator of any new unit at an existing facility subject to this subpart: (1) You must submit the information required in 40 CFR 122.21(r) for the new unit to the Director no later than 180 day s before the planned commencement of cooling water withdrawals for the operation of the new unit. If you have already submitted the required information in your previous permit application, you may choose to submit an update to the required information. (2) The owner or operator is encouraged to submit their permit applications well in advance of the 180 day requirement to avoid delay . ( c ) Permit applications . After the initial submission of the 40 CFR 122.21(r) permit application studies after [ **INSERT effective date of final**  **rule]** , the owner or operator of a facility

may, in subsequent permit applications, request to reduce the information required, if conditio ns at the facility and in the waterbody remain substantially

unchanged since the previous application so long as the relevant previously submitted information remains representative of current source water, intake structure, cooling water s ys tem, and operating conditions . Any habitat designated as critical or species listed as threatened or endangered after issuance of the current permit whose*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 552 of 567 range of habitat or designated critical habit includes waters where a facility intake is located constitutes pot ential for a substantial change that must be addressed by the owner/operator in subsequent permit applications, unless the facility received an exemption pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 1539(a) or there is no reasonable expectation of take. The owner or operator of a facility must submit its request for reduced cooling water intake structure and waterbody application information to the Director at least two years and six months prior to the exp iration of its NPDES permit. The owner or operator’s request must identify each element in this subsection that it determines has not substantially changed since the previous permit application and the basis for the determination. The Director has the discretion to accept or reject any part of the request. ( d) The Director has the discretion to request additional information to supplement the permit application , including a request to inspect a facility . ( e ) Permit application records. The owner or operator of a facility must keep records of all submissions that are part of its permit application until the subsequent permit is issued to document compliance with the requirements of this section. I f the Director approves a request for reduced permit application studies under § 125.95( a) or (c) or § 125.98(g) , the owner or operator of a facility must keep records of all submissions that are part of the previous permit application until the subsequent permit is issued . (f) In additio n, in developing its permit application, the owner or operator of an existing facility

or new uni t at an existing facility must, based on readil y available*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 553 of 567 information at the time of the permit application, instead of the information required at § 122.21(r)(4)(vi) i dentif

y all Federall y- listed threatened and endangered species and /or designated critical habitat that are or may be present in the action area . (g) Certification . The owner or operator of a facility must certify

that its permit applic ation is true, accurate and c omplete pursuant to § 122.22(d). **§ 125.96 Monitoring requirements.** (a) Monitoring requirements fo r impingement mortality for existing facilities . The Director may

establish monitoring requirements in addition to those speci fied at § 125.94(c) , including, for example, biological monitoring, intake velocity and flow measurements. If the Director establishes such monitoring, the specific protocols will be determined b y the Director. (b) Monitoring requirements for entrainment for existing facilities . Monitoring requirements for entrainment will be determined by the Director on a site - specific basis, as appropriate, to meet requirements under § 125.94( d). (c) Additional monitoring requirements for existing facilities . The Director may require additional monitoring for impingement or entrainment including, but not limited to, the following: (1) The Director may require additional monitoring if there are changes in operating conditions at the facility or in the source waterbody that warrant a re examination of the operational conditions identified at 40 CFR 122.21(r) .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 554 of 567 (2) The Director may

require additional monitoring for species not subject to the BTA requirements for impingement mortality at § 12 5.95(c). Such monitoring requirements will be determined by the Director on a site - specific basis . ( d) Monitoring requirements for new units at existing facilities . Monitoring is required to demonstrate compliance with the requirements of § 125.94( e ). ( 1 ) The Director may

establish monitoring requirements for impingement , impingement mortality , and entrainment of the commercial, recreational, and forage base fish and shellfish species identified in the Source Water Baseline Biological Characterization data required by 40 CFR 122.21(r)(4) . Monitoring methods used must be consistent with those used for the Source Water Bas eline Biological Characterization at 40 CFR 122.21(r)(4). If the Director establishes such monitoring requirements, the frequency of monitoring and s pecific protocols will be determined by the Director. ( 2 ) If your facility

is subject to the requirements of § 125.94( e)(1 ) or (2 ), the frequency of flow monitoring and velocity monitoring must be dail y and must be representative of normal operating conditions. Flow monitoring must include measuring cooling water withdrawals, make - up water, an d blowdown volume. The Director may require additional monitoring necessary to demonstrate compliance with § 125.94( e ). ( 3 ) If your facility

is subject to the requirements of § 125.94( e )( 2 ), you must monitor to demonstrate achievement of reduc tions commensurate with a closed - cycle recirculating s ys tem. Y ou must monitor entrainable organisms at a proximity to the intake that is representative of the entrainable organisms in the absence of the intake structure. You must also monitor the latent entrainment mortality in front of the intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 555 of 567 structure. Mortality after passing the cooling water intake structure must be counted as 100 percent mortality

unless you have demonstrated to the approval of the Director that the mortality

for each species is le ss than 100 percent. Monitoring must be representative of the cooling water intake when the structure is in operation. In addition, sufficient samples must be collected to allow for calculation of annual average entrainment levels of all life stages of fis h and shellfish. Specific monitoring pro tocols and frequency of monitoring will be determined by the Director. You must follow the monitoring frequencies identified b y the Director for at least two years after the initial permit issuance. After that time, the Director may approve a request for less frequent monitoring in the remaining ye ars of the permit term and when a subsequent permit is reissued. The monitoring must measure the total count of entrainable organisms or density of organisms, unless the Director approves of a different metric for such measurements. In addition, you must monitor the AIF for each intake. The AIF must be measured at the same time as the samples of entrainable organisms are collected. The Director may require additional monit oring necessary to demonstrate compliance with § 125.94( e ). (4) The Director may

require additional monitoring for impingement or entrainment at the cooling water intake structure used by a new unit including, but not limited to, the following: (i) The Director may require additional monitoring if there are changes in operating conditions at the facility or in the source waterbody that warrant a re examination of the operational conditions identified at 40 CFR 122.21(r) .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 556 of 567 (ii) The Director may

require additional monitoring for species not subject to the BTA requirements for impingement mortality at § 125.95(c). Such monitoring requirements will be determined by the Director on a site - specific basis . ( e ) Visual or remote inspections. You must either conduct visual inspections or employ remote monitoring devices during the period the cooling water intake structure is in operation. You must conduct such inspections at least weekl y to ensure that any technologies operated to comply with § 125.94 are maintained and operated to function as designed including those installed to protect Federall y- listed threatened or endangered species or designated critical habitat . The Director may establish alternative procedures if this requirement is not feasible (e.g., an offshore intake , velocity cap, or during periods of inclement weather). ( f ) Request for reduced monitoring . For facilities that are subject to § 125.94(c)(7 ) and where the facility’s cooling water intake structure does not directly or indirectly affect Federally- listed threatened and endangered species, or designated critical habitat , the owner or operator of the facility may request the Director to reduce mo nitoring requirements after the first full permit term in which these monitoring requirements are implemented, on the condition that the results of the monitoring to date demonstrate that the owner or operator of the facility has consistentl y operated the intake as designed and is meeting the requirements of § 125.94( c ). (g) Additional monitoring related to Federally- listed threatened and endangered species and designated critical habitat at existing facilities. Where the Director requires additional measures to protect Federall y- listed threatened or endangered species or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 557 of 567 designated critical habitat pursuant to § 125.94(g), the Director shall require monitoring associated with those measures. **§ 125.97 Other permit reporting and recordkeeping requirements.**  The owner or operator of an existing facility subject to this subpart is required to submit to the Director the following information: (a) Monitoring re

p orts. Discharge Monitoring Reports (DMRs) (or e quivalent State reports) and results of all monitoring, demonstrations, and other information required b y the permit sufficient to determine compliance with the permit conditions and requirements established under § 125.94. (b) Status reports . Any reports required b y the Director under § 125.9 4 . (c) Annual certification statement and report . An annual certification statement signed b y the responsible corporate officer as defined in § 122.22 subject to the fo llowing : ( 1 ) If the information contained in the previous ye ar’s annual certification is still pertinent , you may

simply state as such in a letter to the Director and the letter, along with any applicable data submission requirements specified in this sec tion shall constitute the annual certification. ( 2 ) If you have substantially modified operation of any unit at your facility

that impacts cooling water withdrawals or operation of your cooling water intake structures, yo u must provide a summary of those changes in the report. In addition, you must submit revisions to the information required at § 122.21(r) in your next permit application. (d) Permit reporting records retention .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 558 of 567 R ecords of all submissions that are part of the permit reporting requirements of this sectio n must be retained until the subsequent permit is issued . Inaddition, the Director may require supplemental recordkeeping such as compliance monitoring under § 125.96, supplemental data collection under 40 CFR 122.21, additional monitoring or data collec tion under § 125.95. (e) Reporting. The Director has the discretion to require additional reporting when necessary

to establish permit compliance and may provide for periodic inspection of the facility . The Director may require additional reporting including but not limited to the records required under § 125.97(d). (f) Records of Director’s Determination of BTA for Entrainment. All records supporting the Director’s Determ ination of BTA for Entrainment under § 125.98(f) or (g) must be retained until such time as the Director revises the Determination of BTA for Entrainment in the permit. (g) Additional reporting requirements related to Federally- listed threatened and endangered species or designated critical habitat. Where the Director requires additional measures to protect Federally- listed threatened or endangered species or critical habitat pursuant to § 125.94(g), the Director shall require reporting associated with those measures. **§ 125.98 Director requirements.** (a) Permit application . The Director must review the materials submitted by the applicant under 40 CFR 122.21(r) for completeness pursuant to 40 CFR 122.21(e) at the time of initial permit application and any application for a subsequent permit .*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 559 of 567 (b) Permitting requirements. Section 316(b) requirements are implemented through an NPDES permit. Based on the information submitted in the permit application, the Director must determine the requirements and conditions to include in the permit. (1) Such permits, including permits with alternative requirements under paragraph (7), must include the following language as a permit condition: “Nothing in this permit authorizes take for the purposes of a facility ’ s compliance with the Endangered Species Act . ” (2) In the case of any permit issued after **[INSERT date 4 5**  **months after effective date of the final rule]**  , at a minimum, the permit must include conditions to implement and ensure complianc e with the impingement mortality standard at § 125.94(c) and the entrainment standard at § 125.94(d), including any measures to protect Federall y- listed threatened and endangered species and designated critical habitat required b y the Director . In addition, the permit must include conditions, management practices and operational measures necessary to ensure proper operation of any technology

used to comply

with the impingement mortality standard at § 125.94(c) and the entrainment standard at § 125.94(d). Pursuant to § 125.94(g), the permit may include additional control measures , monitoring requirements, and reporting requirements that are designed to minimize incidental take, reduce or remove more than minor detrimental effects to Federall y- listed species and designated critical habitat , or avoid jeopardizing Federall y- listed species or destro yi ng or adversel y modifying designated critical habitat (e.g . prey base). Such control measures, monitoring requirements, and reporting requirements may

include measures or requirements identified by the U.S. Fish and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 560 of 567 Wildlife Service and/or the National Marine Fisheries Service during the 60 day review period pursuant to § 125.98(h) or the public notice and comment period pursuant to 40 CFR 124.10. The Director may include additional permit requirements if: ( i) Based on information submitted to the Director by any fishery

management agency or other relevant information, there are migratory or sport or commercial species subject to entrainment that may be directly

or indirectl y affected b y the cooling water intake structure; or (ii ) It is determined by

the Director, based on information submitted by any fis hery management agencies or other relevant information, that operation of the facility , after meeting the entrainment standard of this section, would still result in undesirable cumulative stressors to Federall y- listed and proposed , threatened and endangered species, and designated and proposed critical habitat . (3 ) At a minimum, the permit must require the permittee to monitor as required at § 125 . 9 4 and § 125 . 9 6 . ( 4 ) At a minimum, the permit must require the permittee to report and keep the records specified at § 125 . 9 7 . ( 5 ) After [ **INSERT effective date of the final rule]** , i n the case of any permit issued before **[INSERT date 45 months after effective date of the final rule]** for which th e Director, pursuant to § 125.95(a)(2), has established an alternate schedule for submission of the information required b y 40 CFR 122.21(r), the Director m ay include permit conditions to ensure that , for any subsequent permit, the Director will have all the information required b y 40 CFR 122.21(r) necessary to establish impingement mortality*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 561 of 567 and entrainment BTA requirements under § 125.94(c) and (d) . In addition, the Director must establish interim BTA requirements in the permit based on the Director’s bes t professional judgment on a site - specific basis in accordance with § 125.90(b) and 40 CFR 401.14. ( 6 ) In the case of any permit issued after [ **INSERT effective date of the final rule]**  , and applied for before [ **INSERT effective date of the final rule],** the Director m ay include permit conditions to ensure that the Director will have all the information under 40 CFR 122.21(r) necessary to establish impingement mortality and entrainment BTA requirements under § 125. 94(c) and (d) for the subsequent permit. The Director must establish interim BTA requirements in the permit on a site - specific basis based on the Director’s best professional judgment in accordance with § 125.90(b) and 40 CFR 401. 14 . (7) For new units at existing facilities, the Director may establish alternative requirements if the data specific to the facility indicate that compliance with the requirements of paragraphs ( e )(1) or (2) of § 125.94 for each new unit would result in compliance costs wholl y out of proportion to the costs EPA considered in establishing the requirements at issue , or would result in significant adverse impacts on local air quality , significant adverse impacts on local water resources other than impingement or entrainment, or significant adverse impacts on local energy markets : (i) The alternative requirements must achieve a level of performance as close as practicable to the requirements of paragraph ( e )(1) of § 125.94 ;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 562 of 567 (ii) The alternative requirements must ensure compliance with these regulations, other provisions of the Clean Water Act , and State and Tribal law; (iii) The burden is on the owner or operator of the facility requesting the alternative requirement to demo nstrate that alternative requirements should be authorized for the new unit. (8) The Director may

require additional measures such as seasonal deployment of barrier nets, to protect shellfish. ( c ) Compliance schedule . When the Director establishes a sch edule of requirements under § 125.94 (b) , the schedule must provide for compliance with § 125.94 (c) and (d) as soon as practicable . When establishing a schedule for electric power generating facilities, the Director should consider measures to maint ain adequate energy reliability and necessary

grid reserve capacity during any facility outage. These may include establishing a staggered schedule for multiple facilities serving the same localities. The Director may confer with independent sy stem operato rs and state public utility regulatory

agencies when establishing a schedule for electric power generating facilities. The Director may determine that extenuating circumstances (e.g., lengthy scheduled outages, future production schedules) warrant establis hing a different compliance date for any manufacturing facility . ( d) Supplemental Technologies and Monitoring. The Director may require additional technologies for protection of fragile species, and may require additional monitoring of species of fish and shellfish not already required under § 125.95(c). The Director may

consider data submitted by other interested parties. The Dire ctor may also*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 563 of 567 require additional study

and monitoring if a threatened or endangered species has been identified in the vicinity

of the intake. (e) I mpingement technology performance optimization study . The owner or operator of a facility that choos es to comply with § 125.94(c)(5) or (6 ) must demonstrate in its impingement technology performance optimization study that the operation of its impingement reduction technology has been optimized to min imize impingement mortality of non - fragile species . The Director may request further data collection and information as part of the impingement technology performance optimization study , including extending the study period beyond two years . The Director may also consider previously

collec ted biological data and performance reviews as part of the study . The Director must include in the permit verifiable and enforceable permit co nditions that ensure the modified traveling screens or other s ys tems of technologies will perform as demonstrated . The Director may waive all or part of the impingement technology performance optimization study at 40 CFR 122 .21(r)(6) after the first permit cycle wherein the permittee is deemed in compliance with 125 .94(c) . ( f ) Site -specific entrainment requirements . The Director must establish site specific requirements for entrainment after reviewing the information submitted under 40 CFR 122.21(r) and § 125.95. These entrainment requirements must reflect the Director’s determination of the maximum reduction in entrainment warranted after consideration of factors relevant for determining the best technology available for minimizing adverse environmental impact at each facility . These entrainment requirements may also reflect any control measures to reduce entrainment of Federall y- listed threatened and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 564 of 567 endangered species and designated critical habitat (e.g. prey base) . The Director may reject an otherwise available technology as a basis for entrainment requirements if the Director determines there are unacceptable adverse impacts including impingement, entrainment, or other adverse effects to Federall y- listed threatened or endangered species or designated critical habitat . Prior to any permit reissuance after [ **INSERT date 4 5**  **months after effective date of final rule** ], the D irector must review the performance of the facility ’s installed entrainment technolog y to determine whether it continue s to meet the requirements of § 125.94( d). (1) The Director must provide a written explanation of the proposed entrainment d eterminatio n in the fact sheet or statement of basis for the proposed permit under 40 CFR 124.7 or 124.8 . The written explanation must describe why the Director has rejected any entrainment control technologies or measures that perform better than the selected technologies or measures, and must reflect consideration of all reasonable attempts to mitigate any adverse impacts of otherwise available better performing entrainment technologies. (2) The proposed determination in the fact sheet or statement of basis must be based on consideration of any additional information required b y the Director at § 125.98(i) and the following factors listed below. The weight given to each factor is within the Director’s discretion based upon the circumstances of each facility . ( i ) Numbers and typ es of organisms entrained , including, specificall y, the numbers and species (or lowest taxonomic classificatio n possible) of Federally- listed, threatened and endangered species, and designated critical habitat (e.g., prey base);*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 565 of 567 ( ii) Impact of changes in particulate emissions or other pollutants associated with entrainment technologies; ( iii ) L and availability

i nasmuch as it relates to the feasibility of entrainment technology ; ( iv ) Remaining useful plant life ; and (v) Quantified and qualitative social benefits and costs of available entrainment technologies when such information on both benefits and costs is of sufficient rigor to make a decision . (3) The proposed det ermination in the fact sheet or statement of basis m ay be based on consideration of the following factors to the extent the applicant submitted information under 40 CFR 122.21(r) on these fact ors: ( i ) Entrainment impacts on the waterbody; ( ii ) Thermal discharge impacts; ( iii ) Credit for reductions in flow associated with the retirement of unit s occurring within the ten ye ars preceding **[INSERT effective date of the final rule]** ; (iv ) Impacts on the reliability of energy

delivery within the immediate area ; (v ) Impacts on water consumption; and (vi ) Availability

of process water, gray

water, waste water, reclaimed water, or other waters of appropriate quantity and quality

for reuse as cooling water. (4) If all technologies considered have social costs not jus tified by the social benefit s , or have unacceptable adverse impacts that cannot be mitigated, the Director may determine that no additional control requirements are necessary beyond what the facility*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 566 of 567 is already doing. The Director may reject an otherwise available technology as a BTA standard for entrainment if the social costs are not j ustified by the social benefits. (g) Ongoing permitting proceedings . In the case of permit proceedings begun prior to **[INSERT effective date of the final rule]** whenever the Director has determined that the information already submitted by

the owner or operator of the facility is sufficient , the Director may proceed with a determination of BTA standards for impingement mortality

and entrainment without requiring the owner o r operator of the facility to submit the information required in 40 CFR 1 22.21(r). The Director’s BTA determination may

be based on some or all of the factors in (f)(2) and (3) and the BTA standards for impingement mortality at § 125.95(c). In making the decision on whether to require additional information from the applicant, and what BTA requirements to include in the applicant’s permit for impingement mortality and site - specific entrainment, the Director should consider whether any of the information at 40 CFR 122.21(r) is necessary . (h) The Director must transmit all permit application s for facilities subject to Subpart J to the appropriate Field Office of the U.S. Fish and Wildlife Service and/or Regional Office of the National Marine Fisheries Service upon receipt f or a 6 0 day review prior to public notice of the draft or proposed permit. The Director shall provide the public notice and an opportunity to comment as required under 40 CFR 124.10 and must submit a copy

of the fact sheet or statement of basis (for EPA - issued permits), the permit application (if any) and the draft permit (if any) to the appropriate Field Office of the. Fish and Wildlife Service and/or Regional Office of the National Marine Fisheries*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review ***

Page 567 of 567 Service. This includes notice of specific cooling water intake structure requirements at 124.10( d)(1)( ix ), notice of the draft permit, and any specific information the Director has about threatened or en dangered species and critical habitat that are or may be present in the action area, including any proposed control measures and monitoring and reporting requirements for such species and habitat. (i ) Additional information . In implementing the Direct or’s responsibilities under the provision s of this subpart , the Director is authorized to inspect the facility and t o request additional information needed b y the Director for determining permit conditions and requirements , including any additional informatio n from the facility recommended by the Services upon review of the permit application under paragraph (h). (j) Nothing in this subpart authorizes the take , as defined at 16 U.S.C. 1532(19), of threatened or endangered species of fish or wildlife. Such take is prohibited under the Endangered Species Act unless it is exempted pursuant to 16 U.S.C. 1536(o) or permitted pursuant to 16 U.S.C. 1539(a). Absent such exemption or permit, any facility operating under the authority of this regulation must not take threatened or endangered wildlife . (k) The Director must submit at least annually to the appropriate EPA Regional Office f acilities’ annual reports submitted pursuant to § 125.97(g), for compilation and transmittal to the Services. § 125.99 [Reserved ]