October 30 , 2009

SENT ELECTRONICALLY AND OVERNIGHT MAIL Ms. Courtney Higgins O ffice of I nformation and Regulatory Affairs Office of Management and Budget New Executive Office Building 725 17th Street, NW Wa shington, DC 20503 Dear Ms. Higgins: T he Utility Solid Waste Activities Group ("USWAG") would like to thank you for the opportunity to present the electric utility industry’s views regarding the federal regulation of coal combustion byproducts (CCBs), RIN 2050
-AE81, “Standards for the Management of Coal Combustion Residues Generated by Commercial Electric Power Producers.” The purpose of this letter is to summarize our principal issues and to provide you with electronic copies of several reports we discussed at the meeting. USW AG s upports the d evelopment of federal regulations for CCBs . However, USW AG believes that CC B s should be regulated as non - hazardous waste under Subtitle D of the Resource Conservation and Recovery Act ("RCRA") rather than as hazardous waste under Subtitle C of the Act

. O ur arguments in support of this position can be summarized as follows: Environmental Benefits of Subtitle D Standards

· EPA already is on record as saying that CCBs can be adequately regulated under Subtitle D standards. This issue is not disputed

. In fa ct, EPA is sending the coal ash from the Tennessee Valley Authority’s Kingston spill to a RCRA Subtitle D facility
-- having determined that this disposal option is environmentally protective.

· We understand that scientific and technical data has been presented to OIRA that demonstrates that CCBs do not qualify as a hazardous waste using the typical methods for hazardous waste determination.2

· We also understand that the data shows that leachate from CCB landfills poses less of an environmental risk than l eachate from municipal solid waste landfills which are regulated under Subtitle D. Costs of Subtitle C Standards

· S hould EPA propose to regulate CCBs as a hazardous waste under RCRA Subtitle C, the Agency would be selecting the most extreme and costly reg ulatory option available, when the much less costly Subtitle D non - hazardous waste option would provide the same level of environmental protection and preserve markets for CCB beneficial use. Common sense and sound economic and environmental policy dictat e that any federal program for CCBs be developed under RCRA's non
hazardous waste program.

· If CCBs were regulated as hazardous waste, the economic i mpact on the utility i ndustry would b e e normous , resulting in power plants closures, increased electrici ty rates for consumers , corresponding power reliability concerns, and virtually eliminating all CCB beneficial uses. In 2000, following EPA’s Final Regulatory Determination that CCBs do not warrant hazardous waste regulation, the Agency solicited comment on the costs of regulating CCBs as hazardous wastes under RCRA Subtitle C. Our conservative annual cost estimate was $13.8 billion in 2000

– equivalent to $17 billion in 2008 dollars A copy of that analysis is enclos ed.

· In contrast, EPA estimates the costs of Subtitle D , non - hazardous waste , regulations would be $520 M . A copy of that analysis, prepared by DPRA for EPA in 2005 , is also enclos ed.

· Neither of these estimates included the capital costs associated with the phase out of existing surface i mpoundments and conversion of facilities to dry ash management. Enclos ed is a copy of the study analyzing the economic impacts of mandated closure of CCB surface impoundments. A ten year phase
- out of Surface Impoundments under a Subtitle D program would cost $39B, or $2.5B/year over 20 years. It should be noted that a phase
- out would be even more expensive under RCRA Subtitle C, and would be more costly under a shorter phase
- out period.

· Com bining the costs of conversion and the additional cost of Subtit le C management results in total annual cost of nearly $20 billion per year. These costs represent more than 25 percent of coal generating revenues. Considering that half of all electricity in the U.S. is from coal
-fired generation, the annual cost represe nts $370 per year for each of the 54 mi llion households that purchase coal
- based electricity. This estimate3 assumes that costs are directly passed through to customers rather than included in the rate base. Additional Societal and Budgetary Costs to be C onsidered In addition to direct compliance costs to the industry, USWAG recommends that OIRA assess other governmental budgetary and societal costs. State budget costs: Twenty eight (28) state environmental protection agencies

– the regulatory bodies re sponsible for administering any federal program for CCBs

– have weighed in unanimously opposing regulating CCBs as hazardous waste . The states make a compelling case that Subtitle C regulation of CCB is technically unnecessary , as CCBs rarely if ever exhi bit a hazardous waste characteristic, would deva state state budgets and draw resources away from more pressing infrastructure and true health issues

. The Environmental Council of States ("ECOS") and the Association of State and Territorial Solid Waste Man agement Officials ("AST SWM O ") e cho the views of the state environmental protection agencies, cautioning that regulating CCBs as hazardous waste would needlessly overwhelm hazardous waste disposal capacity, which is currently 2 mi llion tons a years . EPA's proposal would, in one fell swoop , add an additional 130 millions tons of hazardous waste to the system in the form of CCBs

. If even a fraction of CCBs currently disposed on
- site by utilities are sent to off
- site Subtitle C facilities, the Subtitle C disp osal market would be overwhelmed. The system cannot accommodate this , the States cannot afford it, and it is not necessary to protect human health and the environment

. Federal Budget Costs : The federal government would also face increased costs as a re sult of this change in the designation of this waste stream. It would also make it much more difficult for the Federal Government to demonstrate progress toward reducing the quantity of hazardous materials disposed of as required by President Obama’s Octo ber 5 th Executive Order on Federal Leadership in Environmental, Energy and Economic Performance. Federal Departments and Agencies (e.g. military departments, veterans hospitals, and GSA) burn coal for heat, steam, and electricity. Costs of these operatio ns would increase significantly if CCBs are designated as hazardous wastes. In addition, electricity costs to all Federal Government consumers would increase. USWAG does not have access to the information necessary to determine the budgetary im pact of th ese cost increases. OIRA should request that the Resource Management Offices obtain this data from their agencies before moving forward with this proposed determination so that appropriate adjustments to budget estimates can be included in the budgetary p rocess. Societal Cost Resulting from the Loss of Beneficial U se: Approximately 40 percent of CCB materials are currently recycled for other beneficial uses. End users of CCBs oppose hazardous waste regulation because of the adverse4

im pact of such regula tion on CCB b eneficial u se
. Current users will not be willing to accept the liability risk for using a material that has been designated as “hazardous” by the federal government. W e already are seeing adverse impacts on beneficial use merely from the st igm a of a proposal to list CCBs as hazardous; a sh marketers and end
- users confirm this. State highway departments and DOTs o ppose hazardous waste regulation because of the a dverse impact to State highway projects and highway construction budgets

. Unions and state Chambers of Commerce o ppose hazardous waste regulation as unnecessary and resulting in additional job losses at a time when the C ountry can least afford any further blows to the economy. Loss of beneficial use markets increases societal costs in two ways: it requires current users to find alternative (and higher cost) substitutes, and it increases the volume of material that has to be disposed as a hazardous waste. Reliability of Electricity Supplies : New federal mandates to close current coal ash ponds and convert all ash management practices to meet hazardous waste management standards will force closure of existing coal
- based electricity generation, due to economic considerations or site
- specific physical limitations or both. The cost analysis of pond closures separately addressed this issue

. For some power plants, the fixed costs associated with the conversion to dry management of CCBs would be too high to allow the facility to recover the conversion costs given the limited capacity of the se units. If only a portion of the at
- risk capacity needed to be replaced, annual energy replacement costs would be in a range of between $12 and $37 billion. State public utility commissions have taken the unusual position of weighing in because of the threat to electricity rates and reliability resulting from the extraordinary and unnecessary expense of hazardous waste regulation of CCBs. In sum, t he economic ramifications of regulating CCBs as a hazardous waste would be enormous , with ripple effects on state and local governments, utilities, and small businesses that use CCBs, and the thousands of industries that use CCBs for beneficial uses (wallboard, concrete)

. USWAG is concerned that EPA has not accurately calculated the cascading adverse econo mi c im pacts resulting from the regulation of CCBs as hazardous waste. A federal non
- hazardous waste rule for CCBs under RCRA Subtitle D is clearly the preferred and justified approach

. EPA has already concluded that Subtitle D regulations for CCBs would be environmentally protective , and equally important, such regulations would not harm beneficial use and would be implemented at a lower cost to industry, consumers and the states.DC2DOCS1
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Please feel free to contact me if you have additional questions or nee d or any additional information regarding the points discussed above. Sincerely,
James R. Roewer Enclosures cc: Jordan Kislear, DOE Diane Poster, CEQ