### February 2007



# Economic Impact Analysis of NESHAP for Institutional, Commercial, and Industrial Boilers at Area Sources

Draft Report

Prepared for

Tom Walton Environmental Protection Agency OAQPS Air Benefit and Cost Group Research Triangle Park, NC 27711

Prepared by

Katherine Heller Brooks Depro

Dallas Wood RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709
RTI Project Number 0209897.001.018_________________________________ RTI International is a trade name of Research Triangle Institute RTI Project Number 0209897.001.018


# Economic Impact Analysis of NESHAP for Institutional, Commercial, and Industrial Boilers at Area Sources

Draft Report

February 2007

Prepared for

Tom Walton Environmental Protection Agency OAQPS Air Benefit and Cost Group Research Triangle Park, NC 27711

Prepared by

Katherine Heller Brooks Depro

Dallas Wood RTI International 3040 Cornwallis Road Research Triangle Park, NC 27709iii CONTENTS

Section Page

1 Introduction................................................................................................................. .. 1-1 1.1 Why EPA is proposing NE SHAP for Industrial and Commercial/Institutional Boilers ........................................................................ 1-1 1.2 Types of Facilities Potentially A ffected by the I and C/I Boilers Area Source NESHAP.................................................................................................. 1-2 1.2 Organization of this Report ................................................................................. 1-2

2 Boiler Characteristics and Technologies ...................................................................... 2-1
2.1 Characteristics of Steam ...................................................................................... 2-1
2.2 Fossil-Fuel Boiler Characterization..................................................................... 2-4 2.2.1 Industrial, Commercial, a nd Institutional Boilers.................................... 2-4 2.2.2 Heat Transfer Configurations .................................................................. 2-4 2.2.3 Major Design Types................................................................................. 2-5
2.3 References............................................................................................................ 2-7

3 Profile of Affected Sectors............................................................................................ 3-1
3.1 Data sources used ................................................................................................ 3-1
3.2 Industrial Sectors ................................................................................................. 3-1 3.2.1 Food Manufacturing, NAICS 311............................................................ 3-2 3.2.2 Wood Product Manufacturing, NAICS 321............................................. 3-3 3.2.3 Nonmetallic Mineral Product Manufacturing, NAICS 327..................... 3-3
3.3 Service and Commer cial Sectors......................................................................... 3-7 3.3.1 Wholesale Trade in Nondurable Goods, NAICS 422.............................. 3-7 3.3.2 Real Estate, NAICS 531 ........................................................................ 3-10 3.3.3 Educational Services, NAICS 611......................................................... 3-11 3.3.4 Ambulatory Health Care Services, NAICS 621 .................................... 3-12 3.3.5 Hospitals, NAICS 622 ........................................................................... 3-13 3.3.6 Nursing and Residential Care Facilities, NAICS 623............................ 3-14 3.3.7 Traveler Accommodation, NAICS 7211 ............................................... 3-14iv 3.3.8 Food Services and Drinking Places, NAICS 722 .................................. 3-15 3.3.9 Religious Organizations, Grantm aking Organizations, and Civic and Professional Organizations, NonNAICS 813.................................. 3-16 3.4 Potentially Affected Government Entities, NAICS 92...................................... 3-16
3.5 References.......................................................................................................... 3-18

4 Estimated Impacts of Proposed NESHAP Control Options for Industrial, Commercial, and Institutional Boilers at area sources.................................................. 4-1 4.1 Costs of Regulatory Options................................................................................ 4-3 4.1.1 Estimated Costs of Compliance............................................................... 4-3 4.2 Technical Approach to Analyzing Economic Impacts and Small Business Impacts of Control Options ................................................................................. 4-4 4.3 Potential Impacts on Firms in Manufacturing Sectors ........................................ 4-5 4.3.1 Impact Assessment for Firm s Owning Existing Manufacturing Sources..................................................................................................... 4-5 4.3.2 Impact Assessment for Firms Owning New Manufacturing Sources...... 4-7 4.4 Impact Assessment for Firms in Servi ce, Trade, and Non-profit Sectors ........... 4-9 4.4.1 Impact Assessment for Firms Owning Existing Trade, Service, and Nonprofit Sources .................................................................................... 4-9 4.4.2 Impact Assessment for Firms Owning New Trade, Service, and Nonprofit Sources .................................................................................. 4-12 4.5 Potential Impacts on Local Governments Owning Affected Sources ............... 4-15 4.5.1 Impact Assessment for Local Governments Owning Existing Sources................................................................................................... 4-15 4.5.2 Impact Assessment for Governments Owning New Sources ................ 4-16
4.6 Conclusions ....................................................................................................... 4-16v LIST OF FIGURES

Number Page
2-1 Generating Electricity: Steam Turbines........................................................................ 2-3vi LIST OF TABLES

Number Page

1-1 Sectors Potentially Affected by the Industrial and Commercial/Institutional Boilers NESHAP for Area Sources .............................................................................. 1-2

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

3-1 Financial Information for Manufact uring Sectors by NAICS Code: 2002................... 3-2 3-2 Manufacturing Firms, Establishments , Receipts, and Average Annual Firm Revenue by NAICS Code and Firm Size: 2002............................................................ 3-4 3-3 Financial Information for Potentially Affected Service and Commercial Sectors, by NAICS: 2002 ........................................................................................................... 3-7 3-4 Characteristics of Potentially Aff ected Commercial and Service Firms by NAICS and Size Category: 2002 .................................................................................. 3-8 3-5 Characteristics of Potentially A ffected Government Units, by Population Served: 2002 ............................................................................................................... 3-18

4-1 Summary of Rule Requirements for Each Subcategory of Area Source Boilers ......... 4-2 4-2 Total Annualized Costs of Compliance per Boiler....................................................... 4-3 4-3 Cost-to-Sales Ratios for Firms Owni ng Existing Sources, by size of firm .................. 4-6 4-4 Cost-to-Profit Ratios for Firms Owni ng Existing Sources, by size of firm.................. 4-7 4-5 Cost-to-Sales Ratios for Firms Owni ng New Manufacturing Sources by Size of Firm........................................................................................................................... .... 4-8 4-6 Cost-to-Profit Ratios for Firms Ow ning New Manufacturing Sources by Size of Firm........................................................................................................................... .... 4-9 4-7 Cost-to-Sales Ratios for Firms Owning Ex isting Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm............................................................................. 4-10 4-8 Cost-to-Profit Ratios for Firms Owning Existing Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm............................................................................. 4-11 4-9 Cost-to-Sales Ratios for Firms Owning New Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm............................................................................. 4-13 4-10 Cost-to-Profit Ratio for Firms Owning New Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm............................................................................. 4-14 4-12 Cost-to-Revenue Ratios for Governme nts Owning Affected Existing Sources, by Size of Government ............................................................................................... 4-15 4-13 Cost-to-Revenue Ratios for Local G overnments Owning Affected New Sources, by Size of Government ............................................................................................... 4-161-1 SECTION 1 INTRODUCTION

The Environmental Protection Agency (EPA) is developing proposed national emission standards for hazardous air po llutants (NESHAP) for two area source categories: industrial boilers and commercial and instit utional boilers. A boiler is define d as an enclosed device using controlled flame combustion and having the primar y purpose of recovering thermal energy in the form of steam or hot water. The source affected by this proposed rule is the collection of all existing boilers within a subcategory located at an area source facility or each new boiler located at an area source facility. An area source of air pollu tion is a stationary source that is not a major source (does not emit or have the potential to emit 10 tons per year (tpy) of any hazardous air pollutant (HAP) or 25 tpy of any combination of HAP). The proposed rule affects industrial boilers, institutional boilers, and commercial boilers located at area sources. The industrial boiler source category includes boilers used in ma nufacturing, processing, mi ning, refining, or any other industry. The commercial boiler source ca tegory includes boilers used in commercial establishments such as stores/malls, laundries, apartments, restaurants, and hotels/motels. Institutional boiler source category includes bo ilers used in medical centers (e.g., hospitals, clinics, nursing homes), educationa l and religious facili ties (e.g., schools, univers ities, churches), and municipal buildings (e.g., courthouses, prisons). This report will refer to the sources as ICI area source boilers, to distinguish them fr om ICI major source boilers regulated
1.1 Why EPA is proposing NESHAP for Industrial and Commercial/Institutional Boilers

The Clean Air Act (CAA) sections 112(c)(3) and 112(k) describe s pecial requirements for area sources, directing EPA to identify at least 30 ai r toxics that pose the greatest potential health threat in urban areas and to regulate the area source categories that repr esent 90 percent of the emissions of the 30 “listed” air toxics. EP A implements these requirements through the Integrated Urban Air Toxics Strategy (64 FR 38715, July 19, 1999). A primary goal of the Strategy is to achieve a 75 percent reduction in cancer incidence attributable to HAP emitted from stationary sources.

Both of the source categories included in th is proposal are on the Integrated Urban Air Toxics Strategy Area Source Category List. I ndustrial boilers and institutional/commercial boilers were included in the ar ea source list for the Strategy (64 FR 38721). In addition, both industrial boilers and in stitutional/commercial boile rs are on the list of section 112(c)(6) source categories published on April 10, 1998 (63 FR 17830). Section 112(c)(6) requires EPA to list, and subject to standards, categories of sour ces accounting for not less than 90 percent of1-2 emissions of each of seven listed pollutants. These two categories are on the 112(c)(6) list because of emissions of mercury a nd polycyclic organic matter (POM).
1.2 Types of Facilities Potentially Affected by the I and C/I Boilers Area Source NESHAP
Entities potentially affected by the proposed rule include facilities in manufacturing, service, and government sectors that use boilers. Table 1-1 shows sectors that EPA believes may be affected by the rule.
Table 1-1. Sectors Potentially Affected by the Industrial and Commercial/Institutional Boilers NESHAP for Area Sources

NAICS Description of NAICS code

311 Food Manufacturing 321 Wood Product Manufacturing 327 Nonmetallic Mineral Product Manufacturing
452 General Merchandise Stores
531 Real Estate
611 Educational Services 621 Ambulatory Health Care Services 622 Hospitals 623 Nursing and Residential Care Facilities
721 Traveler Accommodation 722 Food Services and Drinking Places 813 Religious Organizations
92 Public Administration

EPA has identified the sectors li sted in Table 1-1, above, as potentially affected by the ICI Boilers Area Source NESHAP; however, this list may not be exhaustive. Instead, it provides examples of the types of entities EPA has identified as opera ting boilers, and which may be area

sources. 1.2 Organization of this Report
This report provides a brief profile of the i ndustry sectors potentially affected by the ICI Boilers Area Source NESHAP. Section 2 describe s boiler technologies an d characteristics. Section 3 describes the facilities and firms or other owning entities in potentially affected

sectors.2-1 SECTION 2 BOILER CHARACTERISTIC S AND TECHNOLOGIES

The three categories of combus tion devices affected under the regulations are industrial, commercial, and institutional (ICI) boilers. Uti lity boilers primarily engaged in generating electricity are not covered by the NESHAP under an alysis and are therefor e excluded from this analysis; units regulated under another MACT standard are also excluded.

Boilers are combustion devices used to produ ce steam or heat water. Steam is produced in boilers by heating water until it vaporizes. The steam is then channeled to applications within a facility or group of f acilities via pipes. Steam is an impor tant power and heating source for the U.S. economy. It is used in the preparation or manufacturing of many key products, such as paper, petroleum products, furniture, and chemicals. Steam is also used to heat buildings and to generate the majority of the elec tricity consumed in this country. There are literally thousands of boilers currently being used in the United St ates throughout a wide va riety of industries.

Since one of the main uses of boilers is to generate steam, some of the characteristics of steam are discussed in this secti on. This section also provides an overview of the various types of boiler characteristics and designs.

2.1 Characteristics of Steam
Steam, an odorless, invisible gas of vaporized water, may be interspersed with water droplets, which gives it a cloudy a ppearance. It is produced natura lly when underground water is heated by volcanic processes and mechanically us ing boilers and other he ating processes. When water is heated at atmospheric pressure, it re mains in liquid form until its temperature exceeds 212°F, the boiling point of water. Additional he at does not raise the water’s temperature but rather vaporizes the water, conve rting it into steam. However, if water is heated under pressure, such as in a boiler, the boiling point is higher than 212°F and more heat is required to generate steam. Once all the water has been vaporized in to steam, the addition of heat causes the temperature and volume to increase. Steam’s hea ting and work capabilities increase as it is produced under greater pressure coupled with hi gher temperatures. As steam escapes from the boiler, it can be direct ed through pipes to drive mechanical processes or to provide heat.

The steam used in most utility, industrial, a nd commercial applications is referred to as “clean steam.” Clean steam encompasses steam purit ies ranging from pure, solid-free steam used in critical processes to filtered steam for less de manding applications. The various types of clean steam differ in steam purity and steam quality. Steam purity is a quantitative measure of2-2 contamination of steam caused by dissolved partic les in the vapor or by tiny droplets of water that may remain in the steam. Steam quality is a measure of how much liquid water is mixed in with the dry steam (Fleming, 1992). Firms select the levels of steam quality and steam purity for their applications based on the sensitivity of th eir equipment to impurities, water droplet size, and condensation as well as the requirements fo r their production proces s. Using clean steam minimizes the risk of product contamination and prolongs equipment life. Although there are infinite possible levels of water purity and qual ity, the term “clean steam” generally refers to three basic types of steam:

 filtered steam—produced by filtering plant steam using high-efficiency filters. Filtered steam is generally of high steam quality because most large water droplets and other contaminants will be filtered out.

 clean steam—steam that is frequently produ ced from deionized and distilled water. Deionized and distilled water is free of dissolved solids and ions, which may corrode pipework.

 pure steam—similar to clean steam except that it is always produ ced from deionized and distilled water.
Steam applications can be categorized by the amount of pressure required: hot water, low pressure, and high pressure. Low pressure is 0 to 15 pounds per square inch (psi) and high pressure steam is above 15 psi ( Plant Engineering , 1991). Hot water systems, which generate little steam, are primarily used for comfort appl ications, such as hot water for a building. Low pressure applications include process heat a nd space heating. High pressure steam applications are more frequently used in industrial and utility applications. Some high pressure applications require that the steam be superheated, a process which ensures that the steam is free of water droplets, to avoid damaging sensitive equipment.

Electric cogenerators, such as large factories and processing f acilities, use steam to drive turbines to generate electricity. A conventiona l steam electric power plant burns fossil fuels (coal, gas, or oil) in a boiler, releasing heat that boils water and converts it into high-pressure steam (see Figure 2-1). The steam enters a turbine where it expands and pushes against blades to turn the generator shaft and create electric cu rrent. In this way, the thermal energy of steam becomes mechanical energy, which is converted in to electricity. Steam us ed to drive turbines generates most of the electric power in the United States (TXU, 2000).2-3 Figure 2-1. Generating Electricity: Steam Turbines

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

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

Industrial operations use steam to perform work such as powering complex machinery operations, in the same way that electric utilities use steam to rotate turbines. Textile mills, pulp and paper mills, and other manufacturing outfits are examples of facilities that use steam to run machinery. Steam also provides heat and pre ssure for manufacturing processes. Industrial establishments use steam to provide heat for dr ying or to heat and separate materials. For example, the paper industry uses steam to heat roll ers that dry paper during the final stages of the production process. Petroleum refi neries and chemical producers us e steam to heat petroleum, raw materials, and other inputs to separate inputs into their constitu ent components or to facilitate chemical interactions. In addition to these applications, steam is employed in many other industrial processes, in cluding textile production, wood working, furniture making, metal working, food preparation, and the manufacture of chemicals. Substitutes for using steam as process heat include electrical heating equipment, infrared, and other radiant drying techniques. Electricity may be used to power machinery, as well. However, switching from steam-powered to electricity-powered machiner y would require significant equipm ent retrofits or replacement.2-4 2.2 Fossil-Fuel Boiler Characterization

Section 2.2 discusses the different classes of fossil-fuel boilers, the most common heat transfer configurations, and the major design type s. The discussion indicate s the type(s) of fuel that each design can use to operate.
2.2.1 Industrial, Commercial, and Institutional Boilers
Industrial, commercial, and in stitutional boilers ar e primarily used for process heating, electrical or mechanical power generation, and/or space heating. Industrial boi lers are used in all major industrial sectors but primarily by the paper products, chemical, food, and petroleum industries. It is estimated that the heat input capacity for these bo ilers is typically between 10 and 250 MMBtu/hr; however, larger indust rial boilers do exist and are similar to utility boilers (EPA, 1997). Commercial/institutional boilers are generally smaller than the industrial units, with heat input capacities generally below 10 MMBtu/hr. These units norma lly supply the steam and hot water for space heating in a wide range of locatio ns, including wholesale and retail trade, office buildings, hotels, restaurants, hospitals, schools, museums, government buildings, and airports. Five hundred ninety-three of the 3,615 units potentially affected by the floor alternative for the regulation are commercial/institutional units.

A boiler system includes the boiler itself, a ssociated piping and valves, operation and safety controls, water treatment system, and peripheral equipment such as pollution control devices, economizers, or superheaters ( Plant Engineering , 1991). Most boilers are made of steel, cast iron, or copper. The primary fu els used by boilers are coal, oil, and natural gas, but some use electricity, waste gases, or biomass.

Boilers may either be erected onsite (field- erected boilers) or a ssembled at a factory (packaged boilers). Packaged boilers are typically lower in initial co st and more simple to install. However, field-erected boilers may have lower operating costs, less main tenance, and greater flexibility because the furnace or convection patt ern chosen to meet required steam pressure, capacity, and fuel specifications is ta ilored to the boiler’s potential use ( Plant Engineering
, 1991). Applications requiring more than 100,000 pounds of steam per hour are usually equipped with a field-erected boiler.
2.2.2 Heat Transfer Configurations
The heat transfer configuration of a boile r refers to the method by which heat is transferred to the water. The four primary boile r configurations are wate rtube, firetube, cast iron, and tubeless. Most industrial users tend to rely on either watertube or fi retube configurations.2-5 In a watertube boiler, combus tion heat is transferred to water flowing through tubes lining the furnace walls and boiler passes. The furnace watertubes absorb primarily radiative heat, while the watertubes in the boiler passes ga in heat by convective heat transfer. These units have a wide range of heat i nput capacities (ICI units range from 0.4 to 1,500 MMBtu/hr) and can be either field erected or pack aged. Watertube boilers with heat input capacities greater than 200 MMBtu/hr are typically field erected.

Because firetube, cast iron, and tubeless heat tr ansfer configurations typically have heat input capacities below 10 MMBtu/hr, they will not generally be covered by the NESHAP. Therefore, this profile focuses on those boile r types that use watertube heat transfer configurations.
2.2.3 Major Design Types
This section summarizes the five major design types for fossil fuel i ndustrial boile rs that will be covered by the NESHAP. It also discusses, where possible, the fuels used, capacity, and assembly method of each of these types of boilers.
2.2.3.1 Stoker-Fired Boilers (Coal)

These units use underfeed air to combust the coal char on a stationary grate, combined with one or more levels of overf ire air introduced above the grate. There are three types of stoker units:

 spreader stokers,

 underfeed stokers, and

 overfeed stokers.
Stokers generally burn all types of coal, w ith the exception of overfeed stokers, which do not burn coking bituminous coals. Stokers can also burn other types of solid fuel, such as wood, wood waste, and bagasse. Spreader stokers are th e most common of these boiler types and have heat input capacities that t ypically range from 5 to 550 MMBtu/hr. However, some of these boilers have capacities as high as 1,500 MMBtu/hr. Smaller stoker units (i.e., those with heat input capacities less than 100 MMBtu/hr) are generally packaged, while larger units are usually field erected.
2.2.3.2 Pulverized Coal Boilers (Coal)
Combustion in pulverized coal-fired units take s place almost entirely while the coal is suspended, unlike in stoker units in which the coal burns on a grate. Finely ground coal is typically mixed with primary combustion air and fed to the burner or burners, where it is ignited2-6 and mixed with secondary combustion air. De pending on the location of the burners and the direction of coal injection into the furnace, pulver ized coal-fired boilers can be classified into three different firing types:

 single and opposed wall,

 tangential, and

 cyclone.
Of these types, wall and ta ngential configurations are the most common. These firing methods are described furt her in Sections 2.2.3.4 and 2.2.3.5.
2.2.3.3 Fluidized Bed Combustion (FBC) Boilers (Coal)
FBC is an integrated technology for reduci ng sulfur dioxide (SO2) and NOx emissions during the combustion of coal. In a typical FBC boiler, crushed coal and inert material (sand, silica, alumina, or ash) and/ or a sorbent (limestone) are maintained in a highly turbulent suspended state by the upward flow of primary air from the windbox located directly below the combustion floor. This fluidized state provides a large amount of surface contact between the air and solid particles, which promotes uniform and efficient combustion at lower furnace temperatures than conventional coal-fired boi lers. Once the hot gases leave the combustion chamber, they pass through the convective sections of the boiler, which are si milar or identical to components used in conventional boilers.

For the FBCs currently in use in all sectors, coal is the primary fuel source, followed in descending order by biomass, coal waste, and municipal waste. Th e heat input capacities of all ICI FBC units generally range from 1.4 to 1,075 MMBtu/hr.
2.2.3.4 Tangentially Fired Boilers (Coal, Oil, Natural Gas)
The tangentially fired boiler is based on the concept of a single flame zone within the furnace. The fuel-air mixture projects from the four corners of the furn ace along a line tangential to an imaginary cylinder located along the furnac e centerline. As fuel and air are fed to the burners and the fuel is combuste d, a rotating “fireball” is form ed. Primarily because of their tangential firing pattern, which leads to larger flame volumes and flame interaction, uncontrolled tangentially fired boilers generally emit rela tively lower NOx than other uncontrolled boiler designs.

Utilities primarily use this type of boiler. Coal is the most common fuel used by these units. Tangentially fired boilers operated by utilities are typica lly larger than 400 MW, while2-7 industrial ones almost always have heat inpu t capacities over 100 MMBtu/hr. In general, most units with heat inpu t capacities over 100 MMBtu /hr are field erected.
2.2.3.5 Wall-fired Boilers (Coal, Oil, Natural Gas)
Wall-fired boilers are characterized by multip le individual burners located on a single wall or on opposing walls of the furnace. In contra st to tangentially fire d boilers, each of the burners in a wall-fired boiler has a relatively distinct flame zone , and the burners in wall-fired boilers do not tilt. Superheated steam temperatur es are instead controlle d by excess air levels, heat input, flue gas recircul ation, and/or steam attemperati on (water spray). Depending on the design and location of the burners, wall-fired boile rs are referred to as single wall or opposed wall.

Wall-fired boilers are used to burn coal, oil, or natural gas, and some designs feature multifuel capability. Almost all industrial wall-fi red boilers have heat input capacities greater than 100 MMBtu/hr. Opposed-wall boilers in pa rticular are usually much larger than 250 MMBtu/hr heat input capacity and are much more common in utility rather than in industrial operations. Because of their size, most wall-fired units are field erected. Field-erected watertube boilers strictly designed for oil fi ring are more compact than coal-fired boilers with the same heat input, because of the more rapid combustion charact eristics of fuel oil. Field-erected watertube boilers fired by natural gas are ev en more compact because of the rapid combustion rate of the gaseous fuel, the low flame luminosity, and the ash-free content of natural gas.

2.3 References Fleming, Ian. 1992. “Just How Clean is your Steam?: Minimizing Risk of Product Contamination and Prol onging Filter Life.” Manufacturing Chemist 63(10):37-39.
Plant Engineering . 1991. “Boiler Systems.” Plant Engineering 45(14):92-94.
Texas Utilities (TXU). 2000. “Generating Electri city: Steam Turbines.” As obtained in September 2000. <http://www.txu.com/knowle dge/energy_lib/generating01.html>.
U.S. Environmental Protection Agency (EPA). 1997. Regulatory Impact Analysis of Air Pollution Regulations: Util ity and Industrial Boilers . Research Triangle Park, NC: U.S. Environmental Protection Agency.3-1 SECTION 3 PROFILE OF AFFECTED SECTORS

This section examines sectors potentially affected by the proposed NESHAP for Industrial and Commercial/Inst itutional (ICI) Boilers at Ar ea Sources. As noted above, the industrial boiler source categor y includes boilers used in manufacturing, processing, mining, refining, or any other industry. Th e commercial boiler source categ ory includes boilers used in commercial establishments such as stores/ma lls, laundries, apartments, restaurants, and hotels/motels. Institutional boiler source category includes boilers used in medical centers (e.g., hospitals, clinics, nursing homes), educational and religious facilities (e.g ., schools, universities, churches), and municipal buildings (e.g., courthouses, prisons). Three industrial sectors, nine “service” sectors (which may have commercial or institutional boilers), and municipal and county governments (which may have institutiona l boilers) are profiled. For convenience, we refer to the affected sources as ICI area source boilers.

3.1 Data sources used
To profile sectors potentially affected by the proposed rulemaking, we used publicly available data from the U.S. Bureau of the Census. Specifically, the data examined are compiled from the Economic Census and the Survey of Current Business , by NAICS code, into groups by employment size of the firm and by receipts of the firm. 1 Businesses are grouped by employment size into categories up to 499 employees, and 50 0 employees and above. Similarly, businesses are grouped by receipts into gr oups ranging from enterprises with receipts less than $100,000 to enterprises with receipts ove r $100,000,000. To facilitate identifyi ng potentially affected small entities, we categorize affected industrial sectors by enterprise employment and commercial and service sectors by enterprise receipts. County and local gov ernments are categorized by population served.

3.2 Industrial Sectors
Industrial sectors that may have affected area sources include Food Ma nufacturing, Wood Product Manufacturing, and Nonmetallic Minera l Product Manufacturing. Table 3-1 provides information on total 2002 receipts, employment and payroll for these three manufacturing

sectors.

1 U.S. Bureau of the Census, Statistics of U.S. Businesses. Data compiled by employment size: http://www.census.gov/csd/susb/usalli02.xls and by receipts: http://www.census.gov/csd/susb/usalli_r03.xls

.3-2 Table 3-1. Financial Information for Manuf acturing Sectors by NAICS Code: 2002

NAICS

Code Description Receipt s ($1,000) Employment Annual Payroll ($1,000) 311 Food Manufacturing $ 457,521,297 1,443,766 $ 44,480,065 321 Wood Product Manufacturing $ 88,649,041 534,011 $ 15,922,366

327 Nonmetallic Mineral Product Manufacturing $ 95,442,761 475,476 $ 18,119,656

Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm
3.2.1 Food Manufacturing, NAICS 311
Industries in the Food Manufacturing subsect or transform livestock and agricultural products into products for intermediate or final consumption. The industry groups are distinguished by the raw materials (generally of animal or vegeta ble origin) processed into food products.

The food products manufactured in these establis hments are typically sold to wholesalers or retailers for distribution to consumers, but establishments primarily engaged in retailing bakery and candy products made on the premises not for immediate consumption are included.

Establishments primarily engaged in manufactur ing beverages are classified in Subsector 312, Beverage and Tobacco Produc t Manufacturing. (NAICS, 2002)

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

 animal feed manufacturing,

 grain and oilseed milling,

 production of frozen and canned vegetables and fruits,

 production of dairy products,

 production of meats, and

 production of many other types of processed food products.
The Small Business Administration (SBA, 2006) define s criteria for determin ing if businesses in each six-digit NAICS code qualify as small. In Food Manufacturing, NAICS 311, the criteria are defined in terms of employment. For the vast majority of six-digit NAICS codes in Food Manufacturing, businesses with fewer than 500 empl oyees are considered small. There are four six-digit NAICS codes for which businesses with fewer than 750 employees are defined as small,3-3 and four six-digit NAICS codes for which bus inesses with fewer than 1000 employees are considered small. Because the majority of the six-digit NAICS codes define small entities as having fewer than 500 employees, and because that definition is easily addressed using the data available, we define small entities in NAICS 311 as those firms with fewer that 500 employees.

Table 3-2 shows the number of firms and the number of establishments, and the total and average receipts, for food manufacturing firms with various numbers of employees. Although they comprise 97 percent of year-round firm s, they earn only 22 percent of revenues.
3.2.2 Wood Product Manufacturing, NAICS 321

Industries in the Wood Product Manufactur ing subsector manufacture wood products, such as lumber, plywood, veneers, wood contai ners, wood flooring, wood trusses, manufactured homes (i.e., mobile home), and prefabricated wood buildings. Th e production processes of the Wood Product Manufacturing s ubsector include sawing, planning, shaping, laminating, and assembling of wood products starting from logs that are cut into bolts, or lumber that then may be further cut, or shaped by lathes or other sh aping tools. The lumber or other transformed wood shapes may also be subsequently planed or smoo thed, and assembled into finished products, such as wood containers. The Wood Pr oduct Manufacturing subsector in cludes establishments that make wood products from logs a nd bolts that are sawed and shaped, and establishments that purchase sawed lumber and make wood products . With the exception of sawmills and wood preservation establishments, th e establishments are grouped into industries mainly based on the specific products manufactured. (NAICS, 2002)

The Small Business Administration defines sm all entities by six-digit NAICS code; for all 14 six-digit NAICS codes within the Wood Pr oduct Manufacturing Industr y, small entities are defined as those firms with fewer than 500 em ployees. (SBA, 2006) Table 3-2 shows the number of firms and the number of establishments, and the total and average r eceipts, for wood product manufacturing firms with various numbers of employees. Although they comprise 98 percent of year-round firms, they earn only 53 percent of revenues.
3.2.3 Nonmetallic Mineral Product Manufacturing, NAICS 327
The Nonmetallic Mineral Product Manufacturing subsector transforms mined or quarried nonmetallic minerals, such as sa nd, gravel, stone, clay, and refractory materials, into products for intermediate or final consumption. Processes used include grinding, mixing, cutting, shaping, and honing. Heat often is used in the process and chemicals are fr equently mixed to change the composition, purity, and chemical properties for th e intended product. For example, glass is produced by heating silica sand to the melting point (sometimes comb ined with cullet or recycled3-4Table 3-2. Manufacturing Firms, Establishments, Receipts,and Average Annual Firm Revenueby NAICS Code and FirmSize: 2002NAICSCodeEmployment Size of Firm(small business size standard, employees)Firms Establishments Receipts ($1,000)Average AnnualFirm Revenue($1,000)311 Food Manufacturing (500)All firms 21,384 25,698 $457,521,297 $21,395Firms operated for the entire year 19,378 23,691 $455,522,629 $23,507Fewer than 5 employees 6,458 6,463 $2,482,188 $3845 to 9 employees 3,894 3,915 $ 3,504,941 $90010 to 19 employees 3,293 3,341 $6,677,701 $2,02820 to 99 employees 3,935 4,254 $32,274,450 $8,202100 to 499 employees 1,247 1,951 $56,660,599 $45,438500 employees or more 551 3,767 $353,922,750 $642,328Firms not operated for the entire year 2,006 2,007 $1,998,668 $996321 Wood Product Manufacturing (500)All firms 15,198 17,052 $88,649,041 $5,833Firms operated for the entire year 14,051 15,901 $87,953,933 $6,260Fewer than 5 employees 4,290 4,293 $ 1,365,385 $3185 to 9 employees 2,769 2,772 $2,181,797 $78810 to 19 employees 2,681 2,693 $4,656,383 $1,73720 to 99 employees 3,280 3,482 $18,276,348 $5,572100 to 499 employees 791 1,271 $19,716,896 $24,927500 employees or more 240 1,390 $41,757,124 $173,988Firms not operated for the entire year 1,147 1,151 $695,108 $606(Continued)3-5Table 3-2. Manufacturing Firms, Establishments, Receipts,and Average Annual Firm Revenue by NAICS Code and FirmSize: 2002NAICSCodeEmployment Size of Firm(small business size standard, employees)Firms Establishments Receipts ($1,000)Average AnnualFirm Revenue($1,000)327 Nonmetallic Mineral Product ManufacturingAll firms 11,395 16,674 $95,442,761 $8,376Firms operated for the entire year 10,576 15,853 $95,176,342 $8,999Fewer than 5 employees 3,123 3,125 $900,494 $2885 to 9 employees 2,054 2,061 $1,755,553 $85510 to 19 employees 1,931 1,975 $3,790,341 $1,96320 to 99 employees 2,553 3,302 $15,357,243 $6,015100 to 499 employees 590 1,788 $14,721,698 $24,952500 employees or more 325 3,602 $58,651,013 $180,465Firms not operated for the entire year 819 821 $266,419 $325Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm3-6 glass) and then drawn, floated, or blow molded to the desire d shape or thickness. Refractory materials are heated and then formed into bricks or other shapes for use in industrial applications. The Nonmetallic Mineral Product Manufacturing subsector includes es tablishments that manufacture products, such as bric ks, refractories, ceramic produc ts, and glass and glass products, such as plate glass and containers. Also incl uded are cement and concre te products, lime, gypsum and other nonmetallic mineral products including abrasive products, ceramic plumbing fixtures, statuary, cut stone products, and mineral wool. The products are used in a wi de range of activities from construction and heavy and light manuf acturing to articles for personal use.

Mining, beneficiating, and manufact uring activities often occur in a single location. Separate receipts will be collected for th ese activities whenever possible. When receipts cannot be broken out between mining and manufacturing, establishments that mine or quarry nonmetallic minerals, beneficiate the nonmetallic minerals and further process the nonmetallic minerals into a more finished manufactured product are classified based on the primary activity of the establishment. A mine that manufactures a small amount of finished products will be classified in Sector 21, Mining. An establishment that mines whose primary output is a more-finished manufactured product will be classified in the Manufacturing Sector.

Excluded from the Nonmetallic Mineral Product Manufacturing subsector are establishments that primarily beneficiate mined non metallic minerals. Benefi ciation is the process whereby the extracted material is reduced to partic les that can be separated into mineral and waste, the former suitable for further processing or direct use. Beneficiation estab lishments are included in Sector 21, Mining. (NAICS, 2002)

The Small Business Administration defines small busin esses at the six-digit NAICS code level. For most of the 25 six-digit NAICS within NAICS 327, SBA defines a small firm as one having fewer than 500 employees. There are six six-digit NAICS fo r which small firms are defined as firms with fewer than 750 employees, and two six-digit NAICS for which small firms are defined as firms with fewer than 1000 employees. Because the major ity of the six-digit NAICS codes define small entities as having fewer than 500 employees, and becau se that definition is easily addressed using the data available, we define small entities in NAICS 327 as those firms with fewer that 500 employees. Table 3-2 shows the number of firms a nd the number of establishments, and the total and average receipts, for nonmetallic mineral pro duct manufacturing firms with various numbers of employees. Although they comprise 97 percent of year-round firms, they earn only 38 percent of

revenues.3-7 3.3 Service and Commercial Sectors
Service and commercial sectors that are poten tially affected by the proposed NESHAP include wholesale trade, real estate, educational se rvices, ambulatory health care services, hospitals, and nursing and residential care facilities, food services and dri nking places, traveler accommodation, and religious organizations. Table 3- 3 shows information on firms in potentially affected service and commercial sectors, includi ng receipts, number of employees, and payroll.
Table 3-3. Financial Information for Potentially Affected Service and Commercial Sectors, by NAICS: 2002

NAICS

Code Description Receipt s ($1,000) Employment Annual Payroll ($1,000)
422 Wholesale Trade, Nondurable Goods $2,157,881,220 2,416,559 $100,131,353 531 Real Estate $236,657,346 1,351,973 $45,772,548 611 Educational Services $180,278,839 2,701,675 $71,961,852 621 Ambulatory Health Care Services $505,690,644 4,917,156 $208,136,533 622 Hospitals $499,145,896 5,121,584 $195,097,359 623 Nursing and Residential Care Facilities $126,267,746 2,770,665 $58,950,491

722 Food Services and Drinking Places $324,210,635 8,35 2,174 $96,985,265 7211 Traveler Accommodation $117,414,326 1,642,067 $32,968,367 8131 Religious Organizations $82,910,385 1,638,915 $24,843,744
Sources: 2002 County Business Patterns and 2002 Economic Census. http://www.census.gov/csd/susb/susb02.htm.
3.3.1 Wholesale Trade in Nondurable Goods, NAICS 422

Industries in the Wholesale Trad e, Nondurable Goods subsector sell or arrange the purchase or sale of nondurable goods to other businesses. Nondurable goods are items generally with a normal life expectancy of less than three years. Nondurable goods wholesale trade establishments are engaged in wholesaling products, such as pa per and paper products, chemicals and chemical products, drugs, textiles and textile products, apparel, footwear, groceries, farm products, petroleum and petroleum products, alcoholic beverages, books, magazines, ne wspapers, flowers and nursery stock, and tobacco products.

The detailed industries within the subsector are organized in the cl assification structure based on the products sold. Within an industry, th e types of establishments may vary, including wholesale merchants and/or agents and brokers. Small firms in NAICS 422 are defined as firms with fewer than 100 employees. Table 3-4 show s information about potentially affected3-8 Table 3-4. Characteristics of Potentially Affe cted Commercial and Service Firms by NAICS and Size Category: 2002

NAICS

Code Receipt Size of Firm (small business size standard, $M) Firms Establishments Receipts ($1,000) Average Annual Firm

Revenue ($1,000) 422 Wholesale Trade, Nondurable Goods (100 Employees) All firms 124,758 153,941 $2,157,881,220 $17,297 Firms operated for the entire year 110,826 139,977 $2,144,997,782 $19,355 Fewer than 5 employees 55,947 56,039 $81,732,727 $1,461 5 to 9 employees 20,636 21,012 $81,872,704 $3,967 10 to 19 employees 14,434 15,425 $110,283,253 $7,641 20 to 99 employees 15,026 19,636 $314,532,298 $20,933 100 to 499 employees 3,343 8,581 $270,697,489 $80,974 500 employees or more 1,440 19,284 $1,285,879,311 $892,972 Firms not operated for the entire year 13,932 13,964 $12,883,438 $925 531 Real Estate ($23.5)

All firms 226,318 257,195 $236,657,346 $1,046 Less than $100,000 57,652 57,668 $2,940,109 $51 $100,000 to $499,999 101,753 101,950 $25,090,485 $247 $500,000 to $999,999 31,694 32,050 $22,143,040 $699 $1,000,000 to $4,999,999 28, 816 32,481 $55,817,823 $1,937 $5,000,000 to $9,999,999 3,055 5,242 $19,247,656 $6,300 $10,000,000 to $49,999,999 2,294 8,197 $34,143,223 $14,884 $50,000,000 to $99,999,999 347 3,004 $11,841,770 $34,126 $100,000,000 or more 707 16,603 $65,433,240 $92,551 611 Educational Services ($6.5)

All firms 65,933 73,701 $180,278,839 $2,734 Less than $100,000 19,608 19,617 $ 908,228 $46 $100,000 to $499,999 23,589 23,692 $5,647,731 $239 $500,000 to $999,999 7,389 7,590 $5,235,347 $709 $1,000,000 to $4,999,999 10, 755 12,166 $22,698,180 $2,110 $5,000,000 to $9,999,999 1,991 2,986 $12,906,215 $6,482 $10,000,000 to $49,999,999 1,931 4,065 $35,516,971 $18,393 $50,000,000 to $99,999,999 338 1,068 $19,314,389 $57,143 $100,000,000 or more 332 2,517 $78,051,778 $235,096 621 Ambulatory Health Care Services ($31.5)

All firms 424,694 487,747 $505,690,644 $1,191 Less than $100,000 56,619 56,688 $2,850,904 $50 $100,000 to $499,999 193,996 194,584 $54,362,647 $280 $500,000 to $999,999 95,043 96,423 $66,075,911 $695 $1,000,000 to $4,999,999 66, 502 78,465 $126,820,368 $1,907 $5,000,000 to $9,999,999 6,481 13,012 $42,723,078 $6,592 $10,000,000 to $49,999,999 4,608 18,062 $72,376,091 $15,707 $50,000,000 to $99,999,999 537 5,072 $20,288,006 $37,780 $100,000,000 or more 908 25,441 $120,193,639 $132,372 (continued)3-9 Table 3-4. Characteristics of Potentially Affe cted Commercial and Service Firms by NAICS and Size Category: 2002 (continued)

NAICS

Code Receipt Size of Firm (small business size standard, $M) Firms Establishments Receipts ($1,000) Average Annual Firm

Revenue ($1,000) 622 Hospitals ($31.5) All firms 4,548 7,569 $499,145,896 $109,751 Less than $100,000 184 184 (D) (D) $100,000 to $499,999 194 194 (D) (D) $500,000 to $999,999 126 126 $89,891 $713 $1,000,000 to $4,999,999 467 501 $1,404,495 $3,007 $5,000,000 to $9,999,999 520 548 $3,728,055 $7,169 $10,000,000 to $49,999,999 1,444 1,601 $33,820,475 $23,421 $50,000,000 to $99,999,999 512 633 $33,753,433 $65,925 $100,000,000 or more 1,101 3,782 $426,290,638 $387,185

623 Nursing and Residential Care Facilities ($12.5)

All firms 32,720 67,900 $126,267,746 $3,859 Less than $100,000 5,489 5,497 (D) (D) $100,000 to $499,999 9,646 9,760 (D) (D) $500,000 to $999,999 3,457 3,730 $2,467,333 $714 $1,000,000 to $4,999,999 8,191 12,978 $19,343,333 $2,362 $5,000,000 to $9,999,999 2,862 7,439 $17,773,345 $6,210 $10,000,000 to $49,999,999 2,420 14,399 $34,241,886 $14,150 $50,000,000 to $99,999,999 252 3,810 $10,185,463 $40,419 $100,000,000 or more 403 10,287 $39,638,992 $98,360 722 Food Services and Dr inking Places ($19)

All firms 376,637 503,354 $324,210,635 $861 Less than $100,000 89,074 89,149 $4,406,632 $ 49 $100,000 to $499,999 181,695 182,424 $45,255,183 $249 $500,000 to $999,999 56,509 58,372 $39,508,709 $699 $1,000,000 to $4,999,999 43, 456 58,713 $78,411,546 $1,804 $5,000,000 to $9,999,999 3,048 13,102 $19,536,493 $6,410 $10,000,000 to $49,999,999 2,252 29,004 $37,063,816 $16,458 $50,000,000 to $99,999,999 244 8,256 $10,415,763 $42,688 $100,000,000 or more 359 64,334 $89,612,493 $249,617 (continued)3-10 Table 3-4. Characteristics of Potentially Affe cted Commercial and Service Firms by NAICS and Size Category: 2002 (continued)

NAICS

Code Receipt Size of Firm (small business size standard, $M) Firms Establishments Receipts ($1,000) Average Annual Firm

Revenue ($1,000) 7211 Traveler Accommodation ($6.5)

All firms 41,551 51,531 $117,414,326 $2,826 Less than $100,000 7,441 7,446 $382,929 $51 $100,000 to $499,999 17,351 17,458 $4,404,095 $254 $500,000 to $999,999 7,450 7,576 $5,281,185 $709 $1,000,000 to $4,999,999 7,351 8,120 $14,075,921 $1,915 $5,000,000 to $9,999,999 859 1,336 $5,504,778 $6,408 $10,000,000 to $49,999,999 745 2,203 $12,350,512 $16,578 $50,000,000 to $99,999,999 120 1,018 (D) (D) $100,000,000 or more 234 6,374 (D) (D) 8131 Religious Organizations ($6.5)

All firms 172,311 172,562 $82,910,385 $481 Less than $100,000 68,164 68,164 $2,774,665 $41 $100,000 to $499,999 71,962 71,964 $16,732,659 $233 $500,000 to $999,999 16,466 16,469 $11,480,290 $697 $1,000,000 to $4,999,999 13, 966 14,011 $27,360,127 $1,959 $5,000,000 to $9,999,999 1,139 1,168 $7,558,585 $6,636 $10,000,000 to $49,999,999 525 671 $8,792,099 $16,747 $50,000,000 to $99,999,999 42 53 $1,983,004 $47,214 $100,000,000 or more 47 62 $6,228,956 $132,531

establishments and firms, by employment size. Although 96 percent of firms qualify as small entities under this definition, they earn only 27 percent of receipts.
3.3.2 Real Estate, NAICS 531

Industries in the Real Estate subsector group establishments th at are primarily engaged in renting or leasing real estate to others; managing real estate fo r others; selling, buying, or renting real estate for others; and providi ng other real estate related servi ces, such as appraisal services. Among the subsectors of this NAICS are firms that lease residential propertie s, such as apartment buildings. This industry comprises establishments primarily engaged in acting as lessors of buildings used as residences or dwellings, such as single-family homes, apartment buildings, and town homes. Included in this indu stry are owner-lessors and establishments renting real estate and then acting as lessors in subleasi ng it to others. The esta blishments in this industry may manage the3-11 property themselves or have another establishmen t manage it for them. Another subsector is firms that lease nonresidential propert ies. This industry comprises esta blishments primarily engaged in acting as lessors of buildings (e xcept miniwarehouses and self-stora ge units) that are not used as residences or dwellings. Included in this industry are: (1) owner-le ssors of nonresidential buildings; (2) establishments renting real estate and then ac ting as lessors in subleasing it to others; and (3) establishments providing full service office space, wh ether on a lease or service contract basis. The establishments in this industry may manage the pr operty themselves or have another establishment manage it for them. Real estate property manage rs are establishments primarily engaged in managing real property for others. Management incl udes ensuring that various activities associated with the overall operation of the property are performed, such as collecting rents, and overseeing other services (e.g., maintenan ce, security, trash removal.)

The Small Business Administration defines small real estate firms as firms having receipts of less than $23.5 million per year. The data av ailable do not readily correspond to this size definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 million comprise 99.5 percent of the firms in the industry, but earn only 67 percent of the receipts.
3.3.3 Educational Services, NAICS 611

Industries in the Educational Se rvices subsector provide instru ction and training in a wide variety of subjects. The instruction and training is provided by specialized establishments, such as schools, colleges, universities, and training centers. The subsector is structured according to level and type of educational services. Elementary and secondary schools, junior colleges and colleges, universities, and professional sc hools correspond to a re cognized series of formal levels of education designated by diplomas, associate degrees (including e quivalent certificates), and degrees. The remaining industry grou ps are based more on the type of instruction or training offered and the levels are not always as formally define d. The establishments are often highly specialized, many offering instruction in a very limited subject matter, for example ski lessons or one specific computer software package. Within the sector, th e level and types of trai ning that are required of the instructors and teachers vary depending on the industry.

Establishments that manage schools and other educational establishments on a contractual basis are classified in this s ubsector if they both manage the operation and provide the operating staff. Such establishments are classified in the ed ucational services subsecto r based on the type of facility managed and operated.3-12 The Small Business Administration defines small firms in NAICS 611 as firms having receipts of less than $6.5 million per year. The data available do not readily correspond to this size definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 million comprise 96 percent of the firms in the industry, but earn only 26 percent of the receipts.
3.3.4 Ambulatory Health Ca re Services, NAICS 621
Industries in the Ambulatory Heal th Care Services subsector provide health care services directly or indirectly to ambul atory patients and do not usually pr ovide inpatient services. Health practitioners in this subsector provide outpatient services, with the facilities and equipment not usually being the most significant pa rt of the production process.

Included in NAICS 621 are doctors’ offices, esta blishments of health practitioners having the degree of M.D. (Doctor of medicine) or D.O. (Doctor of osteopathy) primarily engaged in the independent practice of genera l or specialized medicine (e.g., anesthesiology, oncology, ophthalmology, psychiatry) or surgery. These practi tioners operate private or group practices in their own offices (e.g., centers, clin ics) or in the facilities of ot hers, such as hospitals or HMO medical centers.

Also included are psychiatrist’s offices. This U.S. industry comprise s establishments of health practitioners having the degr ee of M.D. (Doctor of medicine) or D.O. (Doctor of osteopathy) primarily engaged in the independe nt practice of psychiatry or ps ychoanalysis. These practitioners operate private or group practices in their own offices (e.g., centers, c linics) or in th e facilities of others, such as hospitals or HMO medical centers.

Also included are dentists’ offices. This i ndustry comprises establishments of health practitioners having the degree of D.M.D. (Doctor of dental medicine), D.D.S. (Doctor of dental surgery), or D.D.Sc. (Doctor of dental science) primarily engage d in the independent practice of general or specialized dentistry or dental surgery. These practi tioners operate private or group practices in their own offices (e.g., cent ers, clinics) or in th e facilities of others, such as hospitals or HMO medical centers. They can provide either co mprehensive preventive, cosmetic, or emergency care, or specialize in a single field of dentistry.

In addition to doctors’ offices and dentists’ o ffices, this NAICS also includes offices of medical specialists, offices of mental health prof essionals other than doct ors, free-standing urgent care or emergency care centers, and ment al health and substance abuse centers.3-13 The Small Business Administration defines small firms in NAICS 621 as firms having receipts of less than $31.5 million per year. The data available do not readily correspond to this size definition; we therefore use the upper bound of th e receipts category within which this size definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 million comprise 99.7 percent of the firms in th e industry, and earn 72 per cent of the receipts.
3.3.5 Hospitals, NAICS 622
Industries in the Hospitals subs ector provide medical, diagnostic, and treatment services that include physician, nursing, and other health services to inpatients and the specialized accommodation services required by inpatients. Hospita ls may also provide outpatient services as a secondary activity. Establishments in the Hospital s subsector provide inpa tient health services, many of which can only be provided using the speci alized facilities and equipment that form a significant and integral part of the production process. Included in NAICS 622 are general medical and surgical hospitals, establishm ents known and licensed as general medical and surgical hospitals primarily engaged in providing diagnostic and medi cal treatment (both surgic al and nonsurgical) to inpatients with any of a wide va riety of medical conditions. These es tablishments maintain inpatient beds and provide patients with food services th at meet their nutritional requirements. These hospitals have an organized staff of physicians and other medical staff to provide patient care services. These establishments usually provide other services, such as outpatient services, anatomical pathology services, diag nostic X-ray services, clinical laboratory services, operating room services for a variety of procedures, and pharmacy services.

Also included are psychiatric and substan ce abuse hospitals. This industry comprises establishments known and licensed as psychiatric and substance abuse hospitals primarily engaged in providing diagnostic, medical treatment, and monitoring services for inpatients who suffer from mental illness or substance abuse disorders. The treatment often requires an extended stay in the hospital. These establishments main tain inpatient beds and provide pa tients with food services that meet their nutritional requirements. They have an organized staff of physic ians and other medical staff to provide patient care se rvices. Psychiatric, psychological, and social work services are available at the facility. These hospitals usually pr ovide other services, such as outpatient services, clinical laboratory services, diagnostic X-ray servi ces, and electroencepha lograph services.

Finally, NAICS 622 also includes other specialt y hospitals such as maternity hospitals, orthopedic hospitals, and other specialty hospitals that treat a limited subset of conditions.

The Small Business Administration defines small firms in NAICS 622 as firms having receipts of less than $31.5 million per year. The data available do not readily correspond to this size3-14 definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 million comprise 65 percent of the firms in the industry, but earn less than 10 percent of the receipts. Unlike several of the other affected sectors, larger firms are common in NAICS 622.
3.3.6 Nursing and Residential Care Facilities, NAICS 623
Industries in the Nursing and Re sidential Care Facilities subs ector provide residential care combined with either nursing, supervisory, or othe r types of care as requir ed by the residents. In this subsector, the facili ties are a significant part of the production process and the care provided is a mix of health and social services with the he alth services being larg ely some level of nursing services. Nursing care facilities are establishments primarily enga ged in providing inpatient nursing and rehabilitative services. The care is generally provided for an extended period of time to individuals requiring nursing care. Th ese establishments have a permanent core staff of registered or licensed practical nurses who, along with othe r staff, provide nursing and continuous personal care services. Also included are establishments prim arily engaged in providing residential care (but not licensed hospital care) to people with mental retardation, mental illness, or substance abuse problems. In addition, residential care homes for the elderly and ot her residential care establishments such as orphanages, group homes, and halfway houses are included in this NAICS.

The Small Business Administration defines small firms in NAICS 623 as firms having receipts of less than $12.5 million per year. The data available do not readily correspond to this size definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 million comprise 98 percent of the firms in the industry, but earn only 58 percent of the receipts.
3.3.7 Traveler Accommodation, NAICS 7211
Industries in the Accommodation subsector pr ovide lodging or short-term accommodations for travelers, vacationers, and others. There is a wi de range of establishments in these industries. Some provide lodging only; while others provid e meals, laundry serv ices, and recreational facilities, as well as lodging. Lodgi ng establishments are classified in this subsector even if the provision of complementary services generates more revenue. The types of complementary services provided vary from establishment to establishment.

The subsector is organized into three i ndustry groups: (1) traveler accommodation, (2) recreational accommodation, and (3) rooming and boardi ng houses. Of these, the first and third may potentially be affected by the proposed rule. The Traveler Accommodati on industry group includes establishments that primarily provide traditiona l types of lodging servic es. This group includes3-15 hotels, motels, and bed and breakfast inns. In add ition to lodging, these esta blishments may provide a range of other services to their guests. The Rooming and Boarding Houses industry group includes establishments providing temporary or longer-term accommodations, which for the period of occupancy, may serve as a principal residence. Board (i.e., meals) may be provided but is not essential.

The Small Business Administration defines small firms in NAICS 721 as firms having receipts of less than $6.5 million per year. The data available do not readily correspond to this size definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 million comprise 97 percent of the firms in the industry, but earn only 25 percent of the receipts.
3.3.8 Food Services and Drinking Places, NAICS 722
Industries in the Food Services and Drinking Pl aces subsector prepar e meals, snacks, and beverages to customer order for immediate on-prem ises and off-premises consumption. There is a wide range of establishments in these industries. Some provide food and drink only; while others provide various combinations of seating space, wa iter/waitress services and incidental amenities, such as limited entertainment. The industries in the subsector are grouped based on the type and level of services provid ed. The industry groups are full-servic e restaurants; limited-service eating places; special food services, such as food service contractors, cater ers, and mobile food services; and drinking places.

Food services and drink activitie s at hotels and motels; amusement parks, theaters, casinos, country clubs, and similar recreati onal facilities; a nd civic and social organi zations are included in this subsector only if th ese services are provided by a separate establishment primarily engaged in providing food and beverage services.

Excluded from this subsector are establis hments operating dinner cruises. These establishments are classified in Subsector 487, Scenic and Sightse eing Transportation because those establishments utilize transportation equipment to provide scenic recreational entertainment.

The Small Business Administration defines small firms in NAICS 722 as firms having receipts of less than $6.5 million per year, exce pt for subsector 72231, Food Service Contractors, for which the criterion is $19.0 million. To be cons ervative, we utilize the $19.0 million small entity
definition. The data available do not readily correspond to this size definition; we therefore use the upper bound of the receipts categor y within which this size definition falls: less than $50 million. As shown in Table 3-4, firms with receipts less than $50 million comprise 99.8 percent of the firms3-16 in the industry, but earn only 69 percent of the receipts. If we had utilized the $6.5 million definition, the upper bound for that size category is $10 million. Firms with less than $10 million in receipts comprise 99.2 percent of the firms in the industry, and earn 58 percent of receipts.
3.3.9 Religious Organizations, Grantmaking Or ganizations, and Civic and Professional Organizations, NonNAICS 813
Industries in the Relig ious, Grantmaking, Civic, Professi onal, and Similar Organizations subsector group establishments that organize an d promote religious activ ities; support various causes through grantmaking; advoc ate various social and political causes; and promote and defend the interests of their members.

The industry groups within the subsector are defi ned in terms of their activities, such as establishments that provide f unding for specific causes or for a variety of charitable causes; establishments that advocate and actively prom ote causes and beliefs for the public good; and establishments that have an active membership structure to promote causes and represent the interests of their members. Establishments in this subsector may publish newsletters, books, and periodicals, for distribu tion to their membership.

Religious organizations include (1) establishmen ts primarily engaged in operating religious organizations, such as churches, religious temple s, and monasteries and/ or (2) establishments primarily engaged in administer ing an organized religion or pr omoting religious activities. Grantmaking and giving organizations includ e (1) establishments known as grantmaking foundations or charitable trusts and (2) establishments primarily enga ged in raising funds for a wide range of social welfare activities, such as health, educational, sc ientific, and cultural activities. Civic and professional organizations include groups that raise funds for specific causes, including research and services for specific diseases, a dvocacy groups for the environment and for other social and recreational causes.

The Small Business Administration defines small firms in NAICS 813 as firms having receipts of less than $6.5 million per year. The data available do not readily correspond to this size definition; we therefore use the upper bound of the receipts category within which this size definition falls: less than $10 million. As shown in Table 3-4, firms with receipts less than $10 million comprise 99 percent of the firms in the industry, and earn 79 percent of the receipts.
3.4 Potentially Affected Gov ernment Entities, NAICS 92
Government units that own and operate affect ed area source boilers ar e classified in the public administration sector, NAICS 92. The P ublic Administration sector consists of3-17 establishments of federal, state, and local gove rnment agencies that administer, oversee, and manage public programs and have executive, legislativ e, or judicial authority over other institutions within a given area. These agencies also set policy, create laws, adjudicate civil and criminal legal cases, provide for public safety and for national defe nse. In general, government establishments in the Public Administration sector oversee govern mental programs and activities that are not performed by private establishments. Establishments in this sector typica lly are engaged in the organization and financing of the production of public goods and services , most of which are provided for free or at prices that are not economically significant.

Government establishments also engage in a wide range of productiv e activities covering not only public goods and services but also individual goods and serv ices similar to those produced in sectors typically identified with private-sector establishments. In general, ownership is not a criterion for classification in NAICS. Therefor e, government establishments engaged in the production of private-sector-like goods and services should be classified in the same industry as private-sector establishments engaged in similar activities.

As a practical matter, it is difficult to iden tify separate establishment detail for many government agencies. To the extent that separa te establishment record s are available, the administration of governmental programs is classi fied in Sector 92, Publ ic Administration, while the operation of that same governmental program is classified elsewhere in NAICS based on the activities performed. For example, the governmental administrative authority for an airport is classified in Industry 92612, Re gulation and Administration of Transportation Programs, while operating the airport is classified in Industry 488 11, Airport Operations. When separate records are not available to distinguish between the administration of a governmental program and the operation of it, the establishment is classi fied in Sector 92, Public Administration.

Examples of government facilities that may operate affected boilers are courthouses, correctional institutions, and administ rative buildings of various types.

Small governments are defined as those serv ing a population of less than 50,000 people. Small governments may be municipal or county governments. Table 3-5 shows information for county and municipal governme nts by population served. Roughly 72 percent of counties and 97 percent of municipal gov ernments qualify as small government units. Small county governments receive 14 percent of county revenues, while sma ll municipalities receive 29 percent of municipal revenues. Small counties average $16 million in revenues, while larger counties (over 50,000 in population served) average $261 million. The contra st between small and large municipal3-18 Table 3-5. Characteristics of Potentially Affect ed Government Units, by Population Served: 2002

NAICS Code Population Size of Municipalities and Counties (small entity size standard, population) Governments (number) Receipts ($1,000) Average Annual Revenue ($1,000)
Counties (50,000) All Counties 3034 $259,661,308 $85,584 Less than 10,000 671 $4,296,943 $6,404 9211, 9212, 9213,

9214, 922, 923, 924, 925, 926

10,000 to 24,999 869 $12,787,595 $14,715 25,000 to 49,999 638 $19,557,174 $30,654 50,000 to 99,999 383 $26,354,527 $68,811 100,000 to 149,999 156 $17,070,457 $109,426 150,000 to 249,999 116 $21,416,080 $184,621 250,000 to 499,999 110 $34,962,295 $317,839 500,000 or more 91 $123,216,237 $1,354,025 Municipalities (50,000) All Municipalities 19429 $337,432,406 $17,367 Less than 10,000 16745 $34,944,647 $2,087 9211, 9212, 9213,

9214, 922, 923, 924, 925, 927

10,000 to 24,999 1436 $32,010,988 $22,292 25,000 to 49,999 643 $31,630,676 $49,192 50,000 to 74,999 246 $22,544,234 $91,643 75,000 to 99,999 118 $15,949,696 $135,167 100,000 to 199,999 153 $38,160,854 $249,417 200,000 to 299,999 30 $12,886,487 $429,550 300,000 or more 58 $149,304,824 $2,574,221

Sources:

U.S. Census of Governments. 2002. Finances of County Governments, 2002. http://www.census.gov/prod/2005pubs/gc02x43.pdf U.S. Census of Governments. 2002. Finances of Municipal and Township Governments, 2002. http://www.census.gov/prod/2005pubs/gc024x4.pdf

governments is even more striking. Small muni cipal governments average roughly $5 million in revenues, and larger municipal govern ments average $392 million in revenues.

3.5 References
U.S. Bureau of the Census. Census of Govern ments. 2002. Finances of County Governments, 2002. http://www.census.gov/prod/2005pubs/gc02x43.pdf
U.S. Bureau of the Census, 2002. Census of Governments. 2002. Finances of Municipal and Township Governments, 2002. http://www.census.gov/prod/2005pubs/gc024x4.pdf3-19 U.S. Bureau of the Census. North Amer ican Classification System (NAICS). 2002. http://www.census.gov/epcd/www/naics.html

U.S. Small Business Administration, 2006. Small Business Size Standards Matched to the North American Classification Syst em, effective July 31, 2006. http://www.sba.gov/si ze/sizetable2002.html4-1 SECTION 4 ESTIMATED IMPACTS OF PROPOSED NESHAP CONTROL OPTIONS FOR INDUSTRIAL, COMMERCIAL, AND INST ITUTIONAL BOILERS AT AREA SOURCES

In developing the proposed NESHAP for industr ial, commercial, and institutional boilers at area sources, EPA defined subcategories base d on boiler size and fuel type. Large units are water tube boilers with heat input capacities greater than 10 million BTU per hour. Small units are all other boilers. EPA examined two options fo r reducing emissions from affected boilers at area source facilities. The above-the-floor opti on would apply the major source NESHAP to cover area sources. MACT Floor would be to apply MACT (maximum achievable control technology) for the 112(c)(6 ) pollutants (mercu ry and Particulate Organi c Matter or POM) and GACT (generally achievable control technology) for the other HAP. GACT allows more flexibility to use work practices and alternative approaches.

To establish the MACT floor for existing uni ts, EPA examined control options used by units within each subcategory to identify the be st performing units; options considered included fuel substitution, process changes, work prac tices, and add-on control technologies. After examining the data for existing units, EPA concl uded that MACT floor for existing units for both mercury and POM in all subcategories is no cont rol. Under GACT, for large existing solid fuel boilers, EPA is proposing a work practice standa rd, requiring an energy audit performed on the boiler and the facility and to implement any cost-effective energy conservation improvement identified by the audit.

For new units, MACT is defined as the emi ssion control that is achieved in practice by the best controlled source. For new solid fuel boi lers, MACT floor level of control is defined by the combination of a fabric filter and a CO em ission limit. For new large liquid fuel boilers and new large gaseous fuel boilers, MACT floor is a CO emission limit. For new small liquid fuel boilers and new small gaseous fuel boilers, MACT floor is no emission reduction. GACT for new solid fuel area source boilers is also based on a fabric filter.

Table 4-1 presents the subcategories and a summary of requirements for existing and new sources. Note that for existing sources, only la rge units using solid fuel have any compliance activities required. For new sources , on the other hand, small units using liquid or gaseous fuel have no compliance activities.4-2 Table 4-1. Summary of Rule Requirements for Each Subcategory of Area Source Boilers

Subcategory Emission Limits a Work Practice Standard a Testing Requirements Monitoring Requirements Existing Large solid

Above-the-floor PM Mercury HCl Other Metals PM, Hg, HCl, CO PM, Hg, HCl, Scrubber process monitoring, Fuel, Opacity CO, O2 monitoring
MACT Floor 1. Energy audit 2. Implement C/E findings None None

Small solid Large liquid Small liquid Large gaseous Small gaseous None

New Large solid

Above-the-floor PM Mercury CO None PM – Stack test Hg – stack test or fuel analysis 1. opacity 2. fuel

MACT Floor PM Mercury CO None Boiler tune-up None

Small solid

Above-the-floor PM Mercury PM – Stack test Hg – stack test or fuel analysis 1. opacity 2. fuel

MACT Floor1. Install energyefficient boiler 2. Annual tune-ups Boiler tune-up None

Large liquid CO None Annual stack test for units 10 to 100 million Btu/hour in size CEM for units greater than 100 million Btu/hour in size Small liquid None Large gaseous CO None Annual stack test for units 10 to 100 million Btu/hour in size CEM for units greater than 100 million Btu/hour in size Small gaseous None

a Existing Units: Emission standards are Above- the-Floor; Work Practice is MACT Floor.4-3 This section examines the costs for existi ng and new boiler units under each option, and assesses the economic impacts of the options by comparing costs under each option to revenues for boiler owners of various types and sizes.
4.1 Costs of Regulatory Options
EPA considered two regulatory options fo r both new and existing sources. The first option is comparable to the regu lation promulgated for major s ources, and includes, for existing sources, add-on control equipment, monitoring, recordkeeping, and reporting. The second option is a work-practice standard that requires affected sources to conduct a facility-w ide energy audit and to implement any efficiency-enhancing activ ities identified. After examining the costs and effectiveness of these regulatory options, EPA chose to adopt standards based on MACT Floor for existing sources because the above-the-floor option appeared likely to impose significant economic impacts, especial ly for small entities.
4.1.1 Estimated Costs of Compliance

Affected sources’ costs of compliance under both options are shown in Table 4-2. To reflect the fact that costs vary substantially among sources under the above-the-floor option for existing sources and under both the above-the-f loor option and MACT Floor for new sources, Table 4-2 presents the minimum and maximum costs per source, and a measure of central tendency (weighted average for ex isting sources, median for ne w sources). For existing area source facilities, costs for the above-the- floor option range from $97,500 to $254,000. Because costs are estimated for an existing population an d the distribution of costs for the population is known, we also compute a weighted average cost as the central tendency cost measure for existing facilities. By contrast, MACT Floor is very low cost: conducting an energy audit will cost an estimated $245 for each facility.
Table 4-2. Total Annualized Costs of Compliance per Boiler

Existing Sources Above-the-floor MACT Floor Minimum $97,500 $245 Weighted Average $206,000 $245 Maximum $254,000 $245

New Sources Above-the-floor MACT Floor
Minimum $976 $200 Median $78,300 $2,220 Maximum $244,000 $100,7414-4 For affected new sources, estimated costs of complying with MACT Floor range from $200 to $101,000, with a median cost of $2,220; cost s of complying with the above-the-floor option range from $976 to $244,000, with a median of $78,300
4.2 Technical Approach to Analyzing Economic Impacts and Small Business Impacts of Control Options
Complying with the proposed rule may im pose costs on affected facilities. Economic impact analysis (EIA) is used by EPA to examine the effects of these cost s on affected facilities, companies, governments, and markets. In genera l, EIA methods vary depending on the scope of economic decision-making and the amount of in teraction between segments of the economy accounted for in the analysis. Economic analysis methods may simulate behavioral changes by affected economic actors, or they may hold constant all interactions between the affected facility and market forces, and assume that the facility absorbs all control co sts and does not pass any portion of the control costs back to suppliers or forward to consumers. In addition, economic analyses may focus only on directly affected en tities, or they may incorporate some or all indirect impacts throughout the rest of the economy.

In reality, an increase in costs, however small, will likely result in some change in economic behavior by affected entities. Similarl y, because all markets are linked directly or indirectly, creating a web of interactions, the effect s of the increase in costs will likely be felt to some extent throughout the economy. In the case of the proposed rule for ICI boilers at area sources, the rule will impose costs on some affected facilities; the increased costs of operating a boiler will in turn increase the cost of conducting the primary activ ities at such facilities, such as producing a good or providing a servi ce. Affected facilities may atte mpt to recover some of their costs by passing them back to suppliers or forwar d to customers. The suppliers and customers, in turn, may try to pass some of their costs on to other entities, and there by the direct costs of compliance may have ramifications throughout the economy.

For several reasons, however, EPA has chosen not to model the behavioral responses of actors throughout the economy in response to the proposed rule. Fi rst, the costs of complying with the rule, if any, are expect ed to be relatively small for mo st entities, and therefore their responses and the resulting i ndirect impacts would also be small. Second, there is some uncertainty about who would be impacted by the proposed rule. Of the industry sectors that may potentially be affected, some are characteri zed by local markets, some by national or international markets, and some are not market ed at all (governmental facilities). EPA has chosen to conduct a non-behavioral assessment of potential impacts of th e regulatory options for the proposed rule on affected entities. This appro ach assumes that the aff ected entities absorb the4-5 cost of complying with the proposed rule, rather than passing the costs on to customers or back to suppliers. Thus, this assessment approach examines the worst-case impacts on directly impacted entities and does not estimate any indirect impact s on customers or suppliers.

To analyze the economic impacts of the cont rol options on affected facilities, we use Census data on typical establishments and firms in affected manufacturi ng, service, trade, and nonprofit sectors to represen t potentially affected firms of vary ing sizes. To estimate profits for firms in the affected sectors, we use statisti cs on return on sales for the potentially affected sectors compiled by Dun & Bradstreet. These data were presented in Section 3, above. Costs were assigned to affected facilities using the following assumptions:

 There is one affected source per facility

 For non-government sources, we use Census da ta to estimate the number of affected facilities per firm.

 For government sources, we assume one affect ed facility per county or municipality.
Using these assumptions, we computed an estimate d cost of complying with control options, for new and existing sources, by industry sector and government type, by size of firm or government.

To assess potential impacts of the proposed rule, EPA examined cost-to-sales ratios and cost-to-profit ratios for potentially affected fi rms, and cost-to-revenue ratios for potentially affected governments.
4.3 Potential Impacts on Firm s in Manufacturing Sectors
Firms owning affected sources would incur co sts to comply with the control options. To measure the potential impacts on these firms, EP A examined the ratios of total annualized costs of complying with each control option to firm sa les revenues. This cost -to-sales ratio measure the scale of the impact relative to the size of the business. After estimating profits for low-profit, median-profit, and high-profit firms in each sector, EPA also computed the ratio of average or median TAC to firm profits. This cost-to-profit ratio measures the potential for firms in affected sectors that were previously prof itable to become unprofitable due to the costs of complying with the rule.
4.3.1 Impact Assessment for Firms Owning Existing Manufacturing Sources

Table 4-3 shows cost-to-sales ratios for firms owning existing sources under control options 1 and 2. For The above-the-floor option, co sts vary depending on bo iler type and control; for MACT Floor, costs of energy audit is $245 for each facility.4-6 Table 4-3. Cost-to-Sales Ratios for Firms Ow ning Existing Sources, by size of firm

Above-the-floor MACT Floor

NAICS Sector Minimum TAC Weighted Average

TAC Maximum TAC (TAC = $245 per facility) 311 Food Manufacturing

Firms with fewer than 500 employees 1.9% 3.7% 4.8% 0.0048% 0.0048% 0.0048%

Firms with 500 employees or

more 0.10% 0.20% 0.26% 0.00026% 0.00026% 0.00026%

321 Wood Product Manufacturing

Firms with fewer than 500 employees 3.0% 6.0% 7.7% 0.0077% 0.0077% 0.0077%

Firms with 500 employees or

more 0.32% 0.63% 0.82% 0.00082% 0.00082% 0.00082%

327 Nonmetallic Mineral Product Manufacturing

Firms with fewer than 500 employees 3.2% 6.4% 8.2% 0.0082% 0.0082% 0.0082%

Firms with 500 employees or

more 0.59% 1.2% 1.5% 0.0015% 0.0015% 0.0015%

Table 4-3 shows that MACT Floor will be affordable for both large and small firms owning affected manufacturing facilities. Even for small firms, costs under MACT Floor represent less than 0.1 percent of firm sales. The a bove-the-floor option, on the other hand, could impose costs exceeding 4 percent of sales for sm all firms in the Food manufacturing sector, 7.7 percent of sales for small firms in the wood pr oduct manufacturing sector, and over 8 percent for firms in the nonmetallic mineral product manufac turing sector. Even for larger firms in the nonmetallic mineral product manufacturing sect or, The above-the-floor option could impose costs exceeding 1 pe rcent of sales.

Table 4-4 presents cost-to-profit ratios for firms owning existing manufacturing sources, under control options 1 and 2. This ratio again indicates that MA CT Floor would be generally affordable, even for small firms owning exis ting sources. The above-the-floor option, on the other hand, would potentially make low-profit and median-prof it small firms owning existing manufacturing sources unprofitabl e, and would substantially re duce the profits of even highprofit small firms in these sectors.4-7 Table 4-4. Cost-to-Profit Ratios for Firms Ow ning Existing Sources, by size of firm

Above-the-floor MACT Floor

NAICS Sector Average TAC, Lower Quartile Profits Average TAC, median profits Average TAC, Upper Quartile Profits Average TAC, Lower Quartile Profits Average TAC, median profits Average TAC, Upper Quartile Profits
311 Food Manufacturing
Firms with fewer than 500 employees 950% 160% 63% 1.1% 0.19% 0.076%
Firms with 500 employees or more 8.0% 1.3% 0.53% 0.010% 0.00159% 0.00064%

321 Wood Product Manufacturing

Firms with fewer than 500 employees 1000% 250% 95% 1.2% 0.29% 0.11%
Firms with 500 employees or more 20% 4.7% 1.8% 0.023% 0.0056% 0.0022%

327 Nonmetallic Mineral Pr oduct Manufacturing
Firms with fewer than 500 employees 820% 230% 79% 0.98% 0.28% 0.094%
Firms with 500 employees or more 16% 4.6% 1.6% 0.019% 0.0054% 0.0019%

4.3.2 Impact Assessment for Firms Owning New Manufacturing Sources
Using the same measures, EPA examined the pot ential impacts of c ontrol options 1 and 2 for firms owning new manufacturing sources. For new sources, costs of complying with The above-the-floor option are again higher than costs of complyi ng with MACT Floor, although the cost differential is smaller than for existing sources.

Table 4-5 presents cost-to-sa les ratios for firms owning new manufacturing sources under options 1 and 2. Under both Options 1 and 2, sma ll firms may incur costs exceeding 1 percent of sales under median TAC or higher. Because these are costs for new sources, however, it is likely that small firms would select a boiler design that would meet their design needs and also be subject to low or even no costs under the rule. Thus, the higher cost-to-sales ratios shown below might be avoided by careful boiler design selection. For larger firms, costs would be less than 1 percent of sales under MACT Floor, and at most 1.2 percent of sales under The above-the-floor option.4-8 Table 4-5. Cost-to-Sales Ratios for Firms Owni ng New Manufacturing Sources by Size of Firm

Above-the-floor MACT Floor

NAICS Sector Minimum TAC Median TAC Maximu m TAC Minimum TAC Media n TAC Maximu m TAC 311 Food Manufacturing
Firms with fewer than 500 employees 0.22% 1.5% 4.0% 0.0037% 1.5% 2.0% Firms with 500 employees or more 0.012% 0.082% 0.21% 0.000031% 0.081% 0.11%

321 Wood Product Manufacturing
Firms with fewer than 500 employees 0.36% 2.4% 6.3% 0.0060% 2.4% 3.2% Firms with 500 employees or more 0.038% 0.26% 0.67% 0.00011% 0.25% 0.34%

327 Nonmetallic Mineral Product Manufacturing
Firms with fewer than 500 employees 0.38% 2.6% 6.8% 0.0056% 2.5% 3.4% Firms with 500 employees or

more 0.070% 0.47% 1.2% 0.00011% 0.47% 0.62%

Table 4-6 shows cost-to-prof it ratios for firms owning new sources in manufacturing sectors. Median TAC under both Options 1 and 2 is more than three times estimated baseline profits for low-profit small firms in all three manufacturing sectors, and would substantially reduce profitability for median-pro fit small firms. As noted above, however, small firms wishing to install a new boiler have design choices that could enable them to avoid these impacts by choosing boiler designs that meet their facility ne eds but incur low or no costs under the rule. For larger firms, profits would not be significantly affected by complying with the rule under either option.4-9 Table 4-6. Cost-to-Profit Ratios for Firms Owni ng New Manufacturing Sources by Size of Firm

Above-the-floor MACT Floor

NAICS Sector Median TAC, Lower Quartile Profits Median TAC, Median Profits Median TAC, Maximum

Profits Median TAC, Lower Quartile Profits Median TAC, Median Profits Median TAC, Maximum

Profits 311 Food Manufacturing (500)
Firms with fewer than 500 employees 360% 60% 24% 10% 1.7% 0.69% Firms with 500 employees or more 3.0% 0.51% 0.20% 0.086% 0.014% 0.0058%

321 Wood Product Manufacturing (500)
Firms with fewer than 500 employees 390% 94% 36% 11% 2.7% 1.0% Firms with 500 employees or more 7.5% 1.8% 0.69% 0.21% 0.051% 0.020%

327 Nonmetallic Mineral Product Manufacturing
Firms with fewer than 500 employees 310% 88% 30% 8.9% 2.5% 0.85% Firms with 500 employees or more 6.2% 1.7% 0.59% 0.18% 0.049% 0.017%

4.4 Impact Assessment for Firms in Serv ice, Trade, and Non-profit Sectors
EPA used the same analytical approach to examine potential impacts on firms owning affected facilities in service, trade, and non-pr ofit sectors. These impacts are discussed in the following section, and shown in Ta bles 4-7 through 4-10 below.
4.4.1 Impact Assessment for Firms Owning Existin g Trade, Service, and Nonprofit Sources
Table 4-7 presents cost-to- sales ratios for firms owning existing sources in Trade, Service, and Nonprofit sectors. For small firms in several of these sectors, The above-the-floor option costs represent a substantial share of their baseline sales. Even for larger firms in some sectors, The above-the-floor opti on costs exceed 3 percent of sa les. MACT Floor costs, on the other hand, would be less than 0.1 percent of sale s for small entities in al l of the sectors shown.4-10 Table 4-7. Cost-to-Sales Ratios for Firms Owning Existing Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm

Above-the-floor MACT Floor

NAICS

Code Employment Size of Firm (small business size standard, employees or $Million) Min. TAC Weighted Average

TAC Max. TAC TAC = $245 per facility 422 Wholesale Trade, Nondurable Goods (100 Employees) firms with fewer than 500 employees 1.4% 2.7% 3.4% 0.0034% 0.0034% 0.0034% firms with 500 employees or more 0.15% 0.28% 0.37% 0.00037% 0.00037% 0.00037%

531 Real Estate ($23.5) Firms with sales less than $50.0 14.4% 28.3% 36.5% 0.037% 0.037% 0.037% Firms with sales of $50.0 or more 2.5% 4.8% 6.2% 0.0062% 0.0062% 0.0062%

611 Educational Services ($6.5) Firms with sales less than $10.0 13.5% 26.4% 34.1% 0.034% 0.034% 0.034% Firms with sales of $10.0 or more 0.6% 1.1% 1.4% 0.0014% 0.0014% 0.0014%

621 Ambulatory Health Care Services ($31.5) Firms with sales less than $50.0 12.1% 23.7% 30.7% 0.031% 0.031% 0.031% Firms with sales of $50.0 or more 2.1% 4.1% 5.3% 0.0053% 0.0053% 0.0053%
622 Hospitals ($31.5) Firms with sales less than $50.0 0.8% 1.5% 2.0% 0.0020% 0.0020% 0.0020% Firms with sales of $50.0 or more 0.1% 0.2% 0.2% 0.00024% 0.00024% 0.00024%

623 Nursing and Residential Care Facilities ($12.5) Firms with sales less than $50.0 7.1% 13.8% 17.9% 0.018% 0.018% 0.018% Firms with sales of $50.0 or more 2.7% 5.4% 6.9% 0.0069% 0.0069% 0.0069%

722 Food Services and Drinking Places ($19) Firms with sales less than $50.0 18.6% 36.4% 47.1% 0.047% 0.047% 0.047% Firms with sales of $50.0 or more 7.0% 13.8% 17.8% 0.018% 0.018% 0.018%

7211 Traveler Accommodation ($6.5) Firms with sales less than $50.0 13.7% 26.8% 34.7% 0.035% 0.035% 0.035% Firms with sales of $50.0 or more 7.5% 14.7% 19.0% 0.019% 0.019% 0.019%
8131 Religious Organizations ($6.5) Firms with sales less than $50.0 25.2% 49.4% 63.9% 0.064% 0.064% 0.064% Firms with sales of $50.0 or more 0.4% 0.9% 1.1% 0.0011% 0.0011% 0.0011%

Table 4-8 shows cost-to-profit ratios for firms owning existing sources in trade, service, and nonprofit sectors. The above-the -floor option costs exceed base line profits for small lowand median-profit4-11 Table 4-8 Cost-to-Profit Ratios for Firms Ow ning Existing Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm

Above-the-floor MACT Floor

NAIC S Code Employment Size of Firm (small business size standard, employees or $Million) Average TAC, Lower Quartile Profits Average TAC, Median Profits Average TAC, Upper Quartile Profits Average TAC, Lower Quartile Profits Average TAC, Median Profits Average TAC, Upper Quartile Profits 422 Wholesale Trade, Nondurable Goods (100 Employees) firms with fewer than 500 employees 1300% 260% 93% 1.6% 0.31% 0.11% firms with 500 employees or more 12% 2.3% 0.82% 0.014% 0.0027% 0.0010%

531 Real Estate ($23.5) Firms with sales less than $50.0 2600% 480% 160% 3.1% 0.57% 0.19% Firms with sales of $50.0 or more 25% 4.6% 1.6% 0.030% 0.0055% 0.0019%

611 Educational Services ($6.5) Firms with sales less than $10.0 9200% 540% 180% 11% 0.64% 0.21% Firms with sales of $10.0 or more 134% 7.9% 2.6% 0.16% 0.0094% 0.0031%

621 Ambulatory Health Care Services ($31.5) Firms with sales less than $50.0 2600% 550% 280% 3.2% 0.66% 0.33% Firms with sales of $50.0 or more 23% 4.9% 2.5% 0.028% 0.0059% 0.0030%
622 Hospitals ($31.5) Firms with sales less than $50.0 170% 36% 18% 0.20% 0.043% 0.022% Firms with sales of $50.0 or more 8.0% 1.7% 0.8% 0.010% 0.0020% 0.0010%

623 Nursing and Residential Care Facilities ($12.5) Firms with sales less than $50.0 990% 210% 110% 1.2% 0.25% 0.13% Firms with sales of $50.0 or more 30% 6.3% 3.2% 0.036% 0.0075% 0.0038%

722 Food Services and Drinking Places ($19) Firms with sales less than $50.0 17000% 1400% 590% 21% 1.6% 0.71% Firms with sales of $50.0 or more 62% 5.0% 2.1% 0.074% 0.0059% 0.0025%

7211 Traveler Accommodation ($6.5) Firms with sales less than $50.0 (a) 830% 320% (a) 1.0% 0.38% Firms with sales of $50.0 or more (a) 54% 21% (a) 0.064% 0.024%
8131 Religious Organizations ($6.5) Firms with sales less than $50.0 2700% 1300% 430% 3.2% 1.6% 0.51% Firms with sales of $50.0 or more 37% 19% 5.9% 0.044% 0.022% 0.0071% (a) For NAICS 7211, lower quartile firms are unprofitabl e at baseline; TAC would further reduce profitability.

firms in most sectors, suggesting that comp lying with MACT Floor would render many small firms in these sectors unprofitable. Under MACT Floor, on the other hand, costs of complying would be affordable for small firms in most sect ors, including those with relatively low baseline4-12 profits. It should be noted that for NAICS 7211, Traveler Accommodations, low-profit firms are already losing money at baseline and thus might find it difficult to comply with the rule under either option, even if costs are quite low.
4.4.2 Impact Assessment for Firms Owning New Tr ade, Service, and Nonprofit Sources

Table 4-9 shows cost-to-sales ratios for firms owning new sour ces in Trade, Service, and Nonprofit sectors under Cont rol Options 1 and 2. For new sources, costs of complying with the rule under The above-the-floor option again ex ceed the costs of complying under MACT Floor, although the differential between the options is sma ller than for existing sources. Even for larger firms in some of the sectors (Real Estate, Nurs ing and Residential Care Facilities, Ambulatory Health Care Services, Food Services and Dri nking Places, and Traveler Accommodation), the maximum TAC exceeds 3 percent of sales under e ither The above-the-floor option or MACT Floor. For small firms in several of the potentia lly affected sectors (r eal Estate, Educational Services, Food Services and Drinking Pl aces, Traveler Accommodation, and Religious Organizations), the median costs of complying with either Control Option exceed ten percent of sales. Because these are costs associated with new sources, however, firm s wishing to install a new boiler have the opportunity to select boile r designs that would meet their engineering requirements and also minimize the costs of comp lying with the rule, and could thus incur no cost or very low costs of compliance.

Table 4-10 shows cost-to-profit ratios for fi rms owning new sources in Trade, Service, and Nonprofit sectors under Cont rol Options 1 and 2. The cost -to-profit ratios compare the average TAC to estimated profits, based on lowe r quartile, median, and upper quartile return on sales ratios for affected sectors. For small firms in some of the sectors, the costs of complying with the rule under eith er option would render previously pr ofitable firms unprofitable, or would significantly reduce profitabi lity. For larger firms in most sector s that are making at least median profits at baseline, complying with the rule woul d not significantly affect profits. As discussed above, firms considering installing a new boiler have the opportunity to select boiler designs using cleaner fuels that would meet their engi neering needs and also minimize the costs of complying with the rule, so the median TAC may substantially overstate the costs of compliance that firms would actually incur. Low-profit fi rms in the Traveler Accommodation sector are unprofitable at baseline and thus would potentially not be able to afford even low costs of compliance.4-13 Table 4-9. Cost-to-Sales Ratios for Firms Ow ning New Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm

Above-the-floor MACT Floor

NAICS

Code Employment Size of Firm (small business size standard, employees or $Million) Minimum TAC Median TAC Maximum TAC Minimum TAC Median TAC Maximum TAC 422 Wholesale Trade, Nondurable Goods (100 Employees) firms with fewer than 500 employees 0.16% 1.1% 2.8% 0.0025% 1.1% 1.4% firms with 500 employees or more 0.017% 0.11% 0.30% 0.000022% 0.11% 0.15%

531 Real Estate ($23.5) Firms with sales less than $50.0 1.7% 11.4% 30% 0.028% 11% 15% Firms with sales of $50.0 or more 0.29% 1.9% 5.1% 0.00027% 1.9% 2.6%

611 Educational Services ($6.5) Firms with sales less than $10.0 1.6% 11% 28% 0.027% 11% 14% Firms with sales of $10.0 or more 0.07% 0.44% 1.2% 0.00039% 0.44% 0.58%

621 Ambulatory Health Care Services ($31.5) Firms with sales less than $50.0 1.4% 9.6% 25% 0.2023 9.5% 12.6% Firms with sales of $50.0 or more 0.25% 1.7% 4.4% 0.00021% 1.6% 2.2%
622 Hospitals ($31.5) Firms with sales less than $50.0 0.092% 0.62% 1.6% 0.0015% 0.61% 0.81% Firms with sales of $50.0 or more 0.011% 0.074% 0.19% 0.0021% 0.073% 0.10%

623 Nursing and Residential Care Facilities ($12.5) Firms with sales less than $50.0 0.83% 5.6% 15% 0.0087% 5.5% 7.3% Firms with sales of $50.0 or more 0.32% 2.2% 5.7% 0.00026% 2.1% 2.9%

722 Food Services and Drinking Places ($19) Firms with sales less than $50.0 2.2% 15% 39% 0. 034% 15% 19% Firms with sales of $50.0 or more 0.83% 5.6% 15% 0.00012% 5.5% 7.3%

7211 Traveler Accommodation ($6.5) Firms with sales less than $50.0 1.6% 11% 28% 0.027% 11% 14% Firms with sales of $50.0 or more 0.89% 6.0% 16% 0.0018% 5.9% 7.8%
8131 Religious Organizations ($6.5) Firms with sales less than $50.0 3.0% 20% 53% 0.052% 19.7% 26.3% Firms with sales of $50.0 or more 0.053% 0.35% 0.93% 0.00072% 0.35% 0.47%4-14 Table 4-10. Cost-to-Profit Ratio for Firms Owni ng New Sources in Trade, Service, and Nonprofit Sectors, by Size of Firm

Above-the-floor MACT Floor

NAICS

Code Employment Size of Firm (small business size standard, employees or $Million) Average TAC, Lower Quartile Profits Average TAC, Median Profits Average TAC, Upper Quartile Profits Average TAC, Lower Quartile Profits Average TAC, Median Profits Average TAC, Upper Quartile Profits 422 Wholesale Trade, Nondurable Goods (100 Employees) firms with fewer than 500 employees 500% 100% 36% 14% 2.8% 1.0% firms with 500 employees or more 4.4% 0.88% 0.31% 0.12% 0.025% 0.0089%

531 Real Estate ($23.5) Firms with sales less than $50.0 1000% 180% 61% 29% 5.1% 1.7% Firms with sales of $50.0 or more 10% 1.8% 0.59% 0.28% 0.050% 0.017%

611 Educational Services ($6.5) Firms with sales less than $10.0 3500% 200% 67% 99% 5.8% 1.9% Firms with sales of $10.0 or more 51% 3.0% 1.0% 1.4% 0.085% 0.028%

621 Ambulatory Health Care Services ($31.5) Firms with sales less than $50.0 1010% 210% 110% 29% 6.0% 3.0% Firms with sales of $50.0 or more 8.9% 1.9% 0.95% 0.25% 0.053% 0.03%
622 Hospitals ($31.5) Firms with sales less than $50.0 65% 14% 6.9% 1.9% 0.39% 0.20% Firms with sales of $50.0 or more 3.1% 0.64% 0.32% 0.1% 0.02% 0.01%

623 Nursing and Residential Care Facilities ($12.5) Firms with sales less than $50.0 380% 79% 40% 11% 2.2% 1.1% Firms with sales of $50.0 or more 11% 2.4% 1.2% 0.32% 0.068% 0.034%

722 Food Services and Drinking Places ($19) Firms with sales less than $50.0 6600% 520% 230% 190% 15% 6.4% Firms with sales of $50.0 or more 24% 1.9% 0.81% 0.67% 0.054% 0.023%

7211 Traveler Accommodation ($6.5) Firms with sales less than $50.0 (a) 310% 120% (a) 8.9% 3.4% Firms with sales of $50.0 or more (a) 20% 7.8% (a) 0.58% 0.22%
8131 Religious Organizations ($6.5) Firms with sales less than $50.0 1000% 510% 160% 29% 14% 4.6% Firms with sales of $50.0 or more 14% 7.1% 2.3% 0.40% 0.20% 0.064% (a) For NAICS 7211, lower quartile firms are unprofitabl e at baseline; TAC would further reduce profitability.4-15 4.5 Potential Impacts on Local Gove rnments Owning Affected Sources
This section examines potential economic impacts on local governments (counties or municipalities) owning affected sources. To measure impacts on governments, EPA compares the estimated total annualized cost of compliance (TAC) under each Control Option to government revenues for small local government s (those serving fewer than 50,000 people) and larger governments (serving 50,000 people or more).

4.5.1 Impact Assessment for Local Governm ents Owning Existing Sources
Table 4-12 presents cost-to-revenue ratios fo r local governments owning affected existing sources, by size of government. For small county governments, complying with The above-thefloor option could impose TAC exceeding 1 percen t of annual revenue, while MACT Floor TAC is less than 0.1 percent of annual revenue. Similarly, for small municipal governments, The above-the-floor option minimum TAC exceeds 1 percent of municipal annual revenue, and maximum TAC exceeds 4 percent of annual revenue ; MACT Floor TAC is less than 0.1 percent of annual municipal revenue. For larger muni cipalities and counties, TAC of both Control Options is less than 1 percent of revenues.
Table 4-12. Cost-to-Revenue Ratios for Governments Owning Affected Existing Sources, by Size of Government

Above-the-floor MACT Floor

NAICS

Code Size of Government (small entity size standard, population) Number ofGovernments Min. TAC weighted average

TAC Max. TAC ($245 per facility)
Government Facilities – County Level Governments serving fewer than 50,000 2,178 0.58% 1.1% 1.5% 0.0015% 0.0015% 0.0015% Governments serving 50,000 or more 856 0.037% 0.073% 0.09% 0.000094% 0.000094% 0.000094 % 921, 922, 923, 924, 925, 926

Government Facilities – Municipality Level Governments serving fewer than 50,000 18,824 1.8% 3.6% 4.7% 0.0047% 0.0047% 0.0047% Governments serving 50,000 or more 605 0.025% 0.048% 0.062% 0.000062% 0.000062% 0.000062 % 921, 922, 923, 924, 925, 9274-16 4.5.2 Impact Assessment for Governments Owning New Sources
Table 4-13 presents cost-to-revenue ratios for local governments owning new affected sources. For governments owning new sources, bo th Options 1 and 2 would potentially impose costs exceeding 3 perc ent of revenues for small local gove rnments under median and maximum TAC. For larger local governments owning a ffected new sources, even maximum TAC under Control Options 1 and 2 is less than 1 percent of annual revenu e. For small counties, maximum TAC under The above-the-floor option exceeds 1 percent of annual revenue, but maximum TAC under MACT Floor does not. For small municipal governments, median costs under both Control Options exceed 1 percent of annual revenue, and maximum TAC under Above-the-floor exceeds 3 percent of annual revenue. Because these governm ents are considering installing a new boiler, however, they have the option of choosing a boiler design that will meet their engineering needs while also minimizing their costs, so that they mi ght in fact incur low or no costs under the rule.

Table 4-13. Cost-to-Revenue Ratios for Local Governments Owning Affected New Sources, by Size of Government

Above-the-floor MACT Floor
NAICS

Code Population Size of Municipalities (small entity size standard, population) Number ofGovernments Min. TAC Median TAC Max. TAC Min. TAC Median TAC Max. TAC
Government Facilities – County Level Governments serving fewer than 50,000 2,178 0.068% 0.46% 1.2% 0.0012% 0.45% 0.60% Governments serving 50,000 or more 856 0.00% 0.029% 0.077% 0.000077% 0.029% 0.039% 921, 922, 923, 924, 925, 926

Government Facilities – Municipality Level Governments serving fewer than 50,000 18,824 0.22% 1.5% 3.8% 0.0038% 1.4% 1.9% Governments serving 50,000 or more 605 0.0029% 0.019% 0.051% 0.000051% 0.019% 0.026% 921, 922, 923, 924, 925, 927

4.6 Conclusions
EPA has analyzed potential economic impacts on affected firms and governments in sectors likely to be affected by the proposed ru le, using a range of compliance costs for new and existing sources and data for representative firm s in those sectors. Based on these analyses, EPA believes that the proposed rule will generally not impose burdensome economic impacts on firms and governments owning affected new and existi ng sources. For existing sources, MACT Floor costs are estimated to be a uniform $245 per faci lity, which would be affordable for nearly all4-17 firms that are profitable at baseline. For new sour ces, the ability of firms to select boiler designs using cleaner fuels that both meet their engin eering needs and minimize their costs of complying with the proposed rule will enable most firms to install new boilers while incurring low or no costs of compliance under the rule.