66182 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 441

[FRL–5922–2]

RIN 2040–AB97

Effluent Limitations Guidelines and

Pretreatment Standards for the

Industrial Laundries Point Source

Category

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: This proposed rule would

limit the discharge of pollutants into

waters of the United States and publicly

owned treatment works (POTWs) from

existing and new industrial laundries by

establishing pretreatment standards for

existing and new sources (PSES and

PSNS, respectively). These standards

are based on a determination of the

degree to which pollutants pass through

or interfere with POTWs; the best

available technology economically

achievable for PSES; and best available

demonstrated control technology for

PSNS. EPA estimates the proposed rule

would cost approximately $139.4

million ($1997 pretax total social cost)

annually (posttax compliance costs to

affected facilities would be $93.9

million annually) while it reduces the

discharge of toxic and nonconventional

pollutants to POTWs by approximately

13 million pounds resulting in reduced

discharges of 5 million pounds per year

of such pollutants as well as significant

amounts of other conventional

pollutants per year to waters of the U.S.

This proposed rule would also reduce

the impacts of these discharges to

aquatic life and human health and

reduce potential interference with

POTW operations. EPA is reserving

effluent limitations guidelines for direct

dischargers since EPA has identified no

direct dischargers and has no means to

evaluate performance to determine the

appropriate level of control. If any such

discharges were to occur, they would be

subject to limitations set on a best

professional judgement basis.

DATES: EPA must receive comments on

the proposal by February 17, 1998.

EPA will conduct a public hearing on

pretreatment standards on January 15,

1998 from 9am EST to 12 noon.

ADDRESSES: Submit comments in

writing to W–97–14, Ms. Marta Jordan,

Engineering and Analysis Division

(4303), U.S. EPA, 401 M. St. SW,

Washington, DC 20460. Please submit

any references cited in your comments.

EPA requests an original and three

copies of your comments and enclosures

(including references). Commenters who

want EPA to acknowledge receipt of

their comments should enclose a selfaddressed, stamped envelope. No

facsimiles (faxes) will be accepted. For

additional information on how to

submit electronic comments see

SUPPLEMENTARY INFORMATION ‘‘How to

Submit Comments’’.

The public record for this proposed

rulemaking has been established under

docket number W–97–14 and is located

in the Water Docket, Room M2616, 401

M. St. SW, Washington, DC 20460. The

record is available for inspection from

9:00 a.m. to 4:00 p.m., Monday through

Friday, excluding legal holidays. For

access to the docket materials call (202)

260–3027 to schedule an appointment.

You may have to pay a reasonable fee

for copying.

EPA will conduct a public hearing on

pretreatment standards in EPA’s

Auditorium, Waterside Mall, 401 M. St.

SW, Washington, DC. Persons wishing

to present formal comments at the

public hearing should have a written

copy for submittal.

FOR FURTHER INFORMATION CONTACT: For

technical information contact Ms. Marta

E. Jordan at (202) 260–0817. For

economic information contact Mr.

George Denning at (202) 260–7374.

SUPPLEMENTARY INFORMATION:

Regulated Entities

This proposed rule would apply to

industrial laundries. An industrial

laundry is any facility that launders

industrial textile items from off-site as a

business activity (i.e., launders

industrial textile items for other

business entities for a fee or through a

cooperative arrangement). Either the

industrial laundry facility or the off-site

customer may own the industrial

laundered textile items. This definition

includes textile rental companies that

perform laundering operations. For this

proposed rule, laundering means

washing with water, including water

washing following dry cleaning. This

proposed rule would not apply to

laundering exclusively through dry

cleaning. Industrial textile items

include, but are not limited to,

industrial: shop towels, printer towels/

rags, furniture towels, rags, mops, mats,

rugs, tool covers, fender covers, dustcontrol items, gloves, buffing pads,

absorbents, uniforms, filters and clean

room items. If any of these items

otherwise considered to be industrial

textile items are used only by hotels,

hospitals, or restaurants, they are not

industrial items and would not be

covered by this rule.

Category Examples of regulated entities

Industry ...................... Facilities that launder

industrial textile

items from off-site

as a business activity.

This table is not intended to be

exhaustive, but rather provides a guide

for readers regarding entities likely to be

regulated by this action. This table lists

the types of entities that EPA is now

aware could potentially be regulated by

this action. Other types of entities not

listed in the table could also be

regulated by this proposed action. To

determine whether your facility is

regulated by this proposed action, you

should carefully examine the Industrial

Laundries Definition section of the

proposed rule. If you have any questions

regarding the applicability of this

proposed action to a particular entity,

consult the person(s) listed in the ‘‘For

Further Information Contact’’ section of

this proposed rule.

The proposed rule would not apply to

discharges from: on-site laundering at

industrial facilities, laundering of

industrial textile items originating from

the same business entity, and facilities

that exclusively launder linen items,

denim prewash items, new items (i.e.,

items directly from textile

manufacturers, not yet used for

intended purpose), any other laundering

of hospital, hotel, or restaurant items or

any combination of these items. This

proposed rule would apply to hotel,

hospital, or restaurant laundering of

industrial textile items from off-site

industrial users, (e.g., shop towels). In

addition, this proposed rule would not

apply to the discharges from oil-only

treatment of mops.

By linen items, EPA means: sheets,

pillow cases, blankets, bath towels and

washcloths, hospital gowns and robes,

tablecloths, napkins, tableskirts, kitchen

textile items, continuous roll towels,

laboratory coats, household laundry

(such as clothes, but not industrial

uniforms), executive wear, mattress

pads, incontinence pads, and diapers.

This list is meant to be all inclusive. By

linen items, EPA does not mean to

specify a particular type of fabric, but

instead the types of items listed above.

For facilities covered under the

Industrial Laundry definition,

wastewater from all water washing

operations would be covered, including

the washing of linen items as long as

these items do not constitute 100

percent of the items washed.
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66183

Exclusions

Under Pretreatment Standards for

Existing Sources (PSES), EPA is

proposing to exclude existing facilities

that launder less than one million

pounds of incoming laundry per

calendar year and less than 255,000

pounds of shop and/or printer towels/

rags per calendar year. EPA proposes

this exclusion in order to eliminate

unacceptable disproportionate adverse

economic impacts on these smaller

facilities. The excluded facilities would

be disproportionately adversely affected

relative to all facilities covered by this

proposed rule, as discussed further

below. If any excluded facility launders

one million pounds or more of incoming

laundry per calendar year or 255,000

pounds or more of shop and/or printer

towels/rags per calendar year, it will no

longer be excluded from the standards.

All of the excluded facilities are small

entities under the Small Business

Administration (SBA) definition of

small entity. The excluded facilities

account for less than three percent of

the pollutant removals from the waters

of the U.S. than would occur if the

proposed rule were implemented

without the exclusion.

Under Pretreatment Standards for

New Sources (PSNS), EPA is proposing

no exclusion since the economic

projections indicate that there would be

no barrier to entry as a result of the

proposed new source standards.

Supporting Documentation

The basis for this proposed rule is

detailed in five documents, each of

which is supported in turn by

additional information and analyses in

the rulemaking record. EPA’s technical

foundation for the regulation is

presented in the Technical Development

Document for Proposed Pretreatment

Standards for Existing and New Sources

for the Industrial Laundries Point

Source Category. (Hereafter,

‘‘Development Document’’; EPA Report

No. EPA–821–R–97–007). EPA’s

economic analysis is presented in the

Economic Assessment for Proposed

Pretreatment Standards for Existing and

New Sources for the Industrial

Laundries Point Source Category.

(Hereafter, ‘‘Economic Assessment’’;

EPA Report No. EPA–821–R–97–008)

and the Cost-Effectiveness Analysis for

Proposed Pretreatment Standards for

Existing and New Sources for the

Industrial Laundries Point Source

Category (Hereafter, ‘‘Cost-Effectiveness

Analysis’’; EPA Report No. EPA–821–R–

97–005). EPA’s statistical analysis is

presented in the Statistical Support

Document for Proposed Pretreatment

Standards for Existing and New Sources

for the Industrial Laundries Point

Source Category. (Hereinafter,

‘‘Statistical Support Document’’; EPA

Report No. EPA–821–R–97–006). EPA’s

environmental benefits analysis is

presented in the Water Quality Benefits

Analysis for Proposed Pretreatment

Standards for Existing and New Sources

for the Industrial Laundries Point

Source Category. (Hereinafter, ‘‘WQBA’’;

EPA Report No. EPA–821–R–97–009).

These background documents are

available from the Office of Water

Resource Center, RC–4100, at the U.S.

EPA, Washington, DC address shown

above; telephone (202) 260–7786 for the

voice mail publication request line.

How to Submit Comments

Comments may be filed electronically

to Jordan.Marta@epamail.epa.gov.

Electronic comments must be submitted

as an ASCII or WordPerfect 6.1 file

avoiding the use of special characters

and any form of encryption. Electronic

comments must be identified by the

docket number W–97–14 and must be

received by midnight of February 17,

1998. Electronic comments on this

notice may be filed online at many

Federal Depository Libraries. No

confidential business information (CBI)

should be sent via e-mail.

Protection of Confidential Business

Information

EPA notes that many documents in

the record supporting the proposed rule

have been claimed as confidential

business information (CBI) and

therefore, are not included in the record

that is available to the public in the

Water Docket. To support the

rulemaking, EPA is presenting certain

information in aggregated form or is

masking facility identities to preserve

confidentiality claims. Further, the

Agency has withheld from disclosure

some data not claimed as CBI because

release of this information could

indirectly reveal information claimed to

be confidential.

Some facility-specific data, claimed as

CBI, are available to the company that

submitted the information. To ensure

that all CBI is protected in accordance

with EPA regulations, any requests for

company-specific data should be

submitted to EPA on company

letterhead and signed by a responsible

official authorized to receive such data.

The request must list the specific data

requested and include the following

statement, ‘‘I certify that EPA is

authorized to transfer confidential

business information submitted by my

company, and that I am authorized to

receive it.’’

Organization of this Document

I. Legal Authority

II. Summary of Proposed Pretreatment

Standards

III. Background

A. Clean Water Act Statutory

Requirements

B. Pollution Prevention Act

C. Industrial Laundries Definition

D. Summary of Public Participation

IV. Description of the Industry

V. Summary of Data Gathering Efforts

VI. Development of the Pretreatment

Standards

A. Wastewater Characteristics

B. Selection of Pollutant Parameters to be

Regulated

C. Available Treatment Technologies

D. Technology and Regulatory Options

Considered

E. Costs

F. Rationale for Selection of PSES and

PSNS

G. Determination of Long-Term Averages

(LTAs), Variability Factors, and

Limitations for PSES and PSNS

VII. Economic Analysis

A. Introduction

B. Economic Impact Methodology

C. Summary of Costs and Economic

Impacts

D. Cost-Benefit Analysis

E. Cost-Effectiveness Analysis

VIII. Non-Water Quality Environmental

Impacts

IX. Environmental Benefits Analysis

A. Introduction

B. Overview of the Industrial Laundry

Industry’s Effluent Discharges

C. Benefits of the Proposed Rule

D. Human Health Benefits

E. Ecological Benefits Valued on the Basis

of Enhanced Recreational Fishing

Opportunities

F. Benefits From Reduced Cost of Sewage

Sludge Disposal and Reduced Incidence

of Inhibition

G. Discussions With POTW Operators

and Pre-Treatment Coordinators

X. Related Acts of Congress, Executive

Orders, and Agency Initiatives

A. Regulatory Flexibility Act (RFA) as

Amended by the Small Business

Regulatory Enforcement Fairness Act

(SBREFA)

B. Executive Order 12866

C. Unfunded Mandates Reform Act

(UMRA)

D. Paperwork Reduction Act

E. National Technology Transfer and

Advancement Act

XI. Related Rulemakings

A. Office of Solid Waste (OSW) Activities

Related to This Effort

XII. Regulatory Implementation

A. Upset and Bypass Provisions

B. Variances and Modifications

Appendix A—Abbreviations, Acronyms, and

Other Terms Used in This Notice

I. Legal Authority

This regulation is being proposed

under the authority of sections 301, 304,

306, 307, 308, and 501 of the Clean
66184 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

Water Act (CWA), 33 U.S.C. sections

1311, 1314, 1316, 1317, 1318, and 1361.

II. Summary of Proposed Pretreatment

Standards

EPA proposes to establish

‘‘Pretreatment Standards for Existing

Sources’’ (PSES), and ‘‘Pretreatment

Standards for New Sources’’ (PSNS).

Under PSES, EPA is proposing

pretreatment standards for the entire

facility wastestream based on Chemical

Precipitation treatment of the portion of

facility wastewater generated by

laundering the industrial items only

(CP–IL). EPA’s data shows that these

standards can be met by treating only

this portion of wastewater. EPA finds

this option to be the best available

technology economically achievable

based on the data collected during

development of the proposed rule. CP–

IL also provides effective treatment to

minimize/prevent pass through and

interference at POTWs. Under PSNS,

EPA is also proposing standards based

on Chemical Precipitation treatment of

the portion of facility wastewater

generated only by laundering of the

industrial items since it is the best

available demonstrated technology for

pretreatment and the costs are not

projected to be a barrier to entry.

EPA is not developing effluent

limitations guidelines and New Source

Performance Standards for direct

dischargers because EPA has identified

no direct dischargers and there is no

available information with which to

accurately determine ‘‘Best Available

Technology Economically Achievable’’

(BAT) or ‘‘Best Available Demonstrated

Control Technology’’ (BADCT)

performance for direct dischargers.

Proposed limitations based on

pretreatment control technologies

would not likely represent best available

technology or best available

demonstrated technology for direct

dischargers because the treatment

technologies at existing industrial

laundries that EPA evaluated were not

designed for treatment prior to

discharging directly to surface waters.

The type or design (i.e., size) of

treatment would not represent BAT

because in all cases facilities rely on

additional treatment at POTWs. For the

pollutants evaluated in this proposed

rule, the POTW’s biological treatment

removes from 4%–99% depending on

the pollutant. Because EPA has not

identified any POTWs receiving a very

large proportion of their load (70–100%)

from an industrial laundry, a

determination of direct discharge

effluent limitations cannot be

performed. Thus, EPA is reserving

effluent limitations guidelines and

standards for direct dischargers in this

rulemaking.

This proposed rule would not apply

to discharges from: on-site laundering at

industrial facilities, laundering of

industrial textile items originating from

the same business entity, and facilities

that exclusively launder linen items,

denim prewash items, new items (i.e.,

items directly from textile

manufacturers, not yet used for

intended purpose), any other laundering

of hotel, hospital, or restaurant items or

any combination of these items. This

proposed rule would apply to hotel,

hospital, or restaurant laundering of

industrial textile items. In addition, this

proposed rule would not apply to

laundering exclusively through dry

cleaning and the oil-only treatment of

mops.

The rule also would not apply to

certain small industrial laundries; see

‘‘Regulated Entities’’ discussion above,

industrial laundries definition, and rule

text below.

Pursuant to CWA section 307(b)(1),

indirect dischargers are required to

comply with pretreatment standards for

existing sources by three years of the

effective date of the final rule. For

purposes of this rule, indirect

dischargers must comply with this rule

by three years after the date of

publication of the final rule.

III. Background

A. Clean Water Act Statutory

Requirements

The objective of the Clean Water Act

(CWA) is to ‘‘restore and maintain the

chemical, physical, and biological

integrity of the Nation’s waters.’’ CWA

section 101(a). To assist in achieving

this objective, EPA issues effluent

limitation guidelines, pretreatment

standards, and new source performance

standards for industrial dischargers.

These standards relevant to this

rulemaking are summarized here:

1. Best Available Technology

Economically Achievable (BAT)—

Section 304(b)(2) of the CWA

BAT effluent limitations guidelines

apply to direct dischargers of toxic and

nonconventional pollutants. In general,

they represent the best existing

economically achievable performance of

plants in the industrial subcategory or

category. The factors considered in

assessing BAT include the age of

equipment and facilities involved, the

process employed, potential process

changes, non-water quality

environmental impacts, including

energy requirements, and such factors as

the Administrator deems appropriate.

EPA retains considerable discretion in

assigning the weight to be accorded

these factors. An additional statutory

factor considered in setting BAT is

economic achievability. Generally, the

achievability is determined on the basis

of total costs to the industrial

subcategory and the rule’s effect on the

overall industry financial health. Where

existing performance is uniformly

inadequate, BAT may be transferred

from a different subcategory or category.

BAT may be based upon process

changes or internal controls, even when

these technologies are not common

industry practice.

2. New Source Performance Standards

(NSPS)—Section 306 of the CWA

NSPS are based on the best available

demonstrated control technology

(BADCT) and apply to all pollutants

(conventional, nonconventional, and

toxic). New facilities have the

opportunity to install the best and most

efficient production processes and

wastewater treatment technologies.

Under NSPS, EPA is to consider the best

demonstrated process changes, in-plant

controls, and end-of-process control and

treatment technologies that reduce

pollution to the maximum extent

feasible. In establishing NSPS, EPA is

directed to take into consideration the

cost of achieving the effluent reduction

and any non-water quality

environmental impacts and energy

requirements.

3. Pretreatment Standards for Existing

Sources (PSES)—Section 307(b) of the

CWA

PSES are designed to prevent the

discharge of pollutants that pass

through, interfere with, or are otherwise

incompatible with the operation of

publicly owned treatment works

(POTWs). The CWA authorizes EPA to

establish pretreatment standards for

pollutants that pass through POTWs or

interfere with treatment processes or

sludge disposal methods at POTWs.

Pretreatment standards are technologybased and analogous to BAT effluent

limitations guidelines.

The General Pretreatment

Regulations, which set forth the

framework for the implementation of

categorical pretreatment standards, are

found at 40 CFR part 403. Those

regulations contain a definition of pass

through that addresses localized rather

than national instances of pass through

and establish pretreatment standards

that apply to all non-domestic

dischargers. See 52 FR 1586 January 14,

1987.
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66185

4. Pretreatment Standards for New

Sources (PSNS)—Section 307(b) of the

CWA

Like PSES, PSNS are designed to

prevent the discharges of pollutants that

pass through, interfere with, or are

incompatible with the operations of

POTWs. New indirect dischargers have

the opportunity to incorporate into their

plants the best available demonstrated

technologies. The Agency considers the

same factors in promulgating PSNS as it

considers in promulgating NSPS.

5. Best Management Practices (BMPs)

Section 304(e) of the CWA gives the

Administrator the authority to publish

regulations, in addition to the effluent

limitations guidelines and standards

listed above, to control plant site runoff,

spillage or leaks, sludge or waste

disposal, and drainage from raw

material storage that the Administrator

determines may contribute significant

amounts of pollutants. Some industrial

laundry facilities have BMPs in place

and these BMPs are further discussed in

Sections III.B. and VI.C.1. below and in

more detail in the Development

Document.

6. CWA Section 304(m) Requirements

Section 304(m) of the CWA requires

EPA to establish schedules for (I)

reviewing and revising existing effluent

limitations guidelines and standards

and (ii) promulgating new effluent

limitations. On January 2, 1990, EPA

published an Effluent Guidelines Plan

(55 FR 80), in which schedules were

established for developing new and

revised guidelines for several industry

categories, including the industrial

laundries point source category. Natural

Resources Defense Council, Inc.,

challenged the Effluent Guidelines Plan

in a suit filed in the U.S. District Court

for the District of Columbia, (NRDC et

al v. Reilly, Civ. No. 89–2980). On

January 31, 1992 the Court entered a

consent decree (the ‘‘304(m) Decree’’),

which establishes schedules for, among

other things, EPA’s proposal and

promulgation of effluent guidelines for

a number of point source categories,

including the industrial laundries point

source category. The most recent

Effluent Guidelines Plan Update was

published in the Federal Register on

February 26, 1997 (62 FR 8726). This

plan requires, among other things, that

EPA propose the Industrial Laundries

Effluent Limitations Guidelines and

Pretreatment Standards by September

1997 and take final action on the

Guidelines and Standards by June 1999.

B. Pollution Prevention Act

The Pollution Prevention Act of 1990

(PPA) (42 U.S.C. 13101 et seq., Pub. L.

101–508, November 5, 1990) ‘‘declares it

to be the national policy of the United

States that pollution should be

prevented or reduced whenever feasible;

pollution that cannot be prevented

should be recycled in an

environmentally safe manner, whenever

feasible; pollution that cannot be

prevented or recycled should be treated

in an environmentally safe manner

whenever feasible; and disposal or

release into the environment should be

employed only as a last resort * * *’’

(Sec. 6602; 42 U.S.C. 13101(b)). In short,

preventing pollution before it is created

is preferable to trying to manage, treat

or dispose of it after it is created. The

PPA directs the Agency to, among other

things, ‘‘review regulations of the

Agency prior and subsequent to their

proposal to determine their effect on

source reduction’’ (Sec. 6604; 42 U.S.C.

13103(b)(2)). This effluent guideline was

reviewed for its incorporation of

pollution prevention.

According to the PPA, source

reduction reduces the generation and

release of hazardous substances,

pollutants, wastes, contaminants or

residuals at the source, usually within a

process. The term source reduction

‘‘include[s] equipment or technology

modifications, process or procedure

modifications, reformulation or redesign

of products, substitution of raw

materials, and improvements in

housekeeping, maintenance, training or

inventory control. The term ‘‘source

reduction’’ does not include any

practice which alters the physical,

chemical, or biological characteristics or

the volume of a hazardous substance,

pollutant, or contaminant through a

process or activity which itself is not

integral to or necessary for the

production of a product or the providing

of a service.’’ 42 U.S.C. 13102(5). In

effect, source reduction means reducing

the amount of a pollutant that enters a

waste stream or that is otherwise

released into the environment prior to

out-of-process recycling, treatment, or

disposal.

EPA has undertaken several pollution

prevention related activities involving

the industrial laundries industry. Part of

the efforts were Agency wide, including

the Office of Research and Development

(ORD) and EPA’s Region 9, while other

efforts were included as part of the

engineering studies in the development

of the proposed rule.

The Agency-wide efforts, called the

Industrial Pollution Prevention Project

(IP3), were multi-media and examined

how industrial pollution prevention can

be incorporated into EPA’s regulatory

framework and how the pollution

prevention ethic can be promoted

throughout industry, the public and

government. A report summarizing the

results of these efforts, entitled

‘‘Summary Report of the Industrial

Pollution Prevention Project (IP3),’’

EPA–820-R–95–007, July 1995, included

the results of two case studies involving

industrial laundries. More detailed

discussions of the two studies are

contained in the individual reports,

‘‘Pollution Prevention at Industrial

Laundries: Assessment Observations

and Waste Reduction Options,’’ EPA–

820-R–95–010, July 1995, and

‘‘Pollution Prevention at Industrial

Laundries: A Collaborative Approach in

Southern California,’’ EPA–820-R–95–

012. These studies identified a number

of ‘‘best management practices’’ (BMP’s)

and water and energy savings

technologies as potential pollution

prevention practices at industrial

laundries.

Similarly, during the engineering

study phase of the development of the

proposed rule, a number of potential

pollution prevention practices and

technology applications were identified.

Discussion of the pollution prevention

technologies and practices and their

uses with respect to this proposed rule

are contained later in Section VI of this

preamble and in the Development

Document.

C. Industrial Laundries Definition

An industrial laundry is any facility

that launders industrial textile items

from off-site as a business activity (i.e.,

launders industrial textile items for

other business entities for a fee or

through a cooperative arrangement).

Either the industrial laundry facility or

the off-site customer may own the

industrial laundered textile items. This

definition includes textile rental

companies that perform laundering

operations. For this proposed rule,

laundering means washing with water,

including water washing following dry

cleaning. This proposed rule would not

apply to laundering exclusively through

dry cleaning. Industrial textile items

include, but are not limited to

industrial: shop towels, printer towels/

rags, furniture towels, rags, mops, mats,

rugs, tool covers, fender covers, dustcontrol items, gloves, buffing pads,

absorbents, uniforms, filters and clean

room garments. If any of these items are

used by hotels, hospitals, or restaurants,

they are not industrial items.

The proposed rule would not apply to

discharges from: on-site laundering at

industrial facilities, laundering of
66186 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

industrial textile items originating from

the same business entity, and facilities

that exclusively launder linen items,

denim prewash, new items (i.e. items

directly from textile manufacturers, not

yet used for intended purpose), any

other laundering of hotel, hospital, or

restaurant items or any combination of

these items. This proposed rule would

apply to hotel, hospital, or restaurant

laundering of industrial textile items. In

addition, this rule would not apply to

discharges from the oil-only treatment

of mops.

The focus of this rule is on industrial

laundries that function independently

of other industrial activities that

generate wastewater. The reason EPA is

excluding from applicability on-site

laundries is that EPA believes it is more

appropriate to address on-site laundry

discharges at industrial facilities as part

of the effluent from the facility as a

whole, for several reasons. First, many

such facilities commingle laundry

wastewater with wastewater from other

processes. Second, EPA anticipates that

contaminants removed from laundered

items can best be treated with process

wastewater containing similar

contaminants. EPA has already

established effluent limitations

guidelines and standards for 51

industries (see Development Document).

These regulations generally apply to

wastewater generated from these

industries, including on-site laundering.

For example, the OCPSF effluent

guidelines control discharges from

garment laundering at OCPSF facilities.

For industries not yet covered by

effluent limitations guidelines and

standards, it makes sense to examine

these industries and the wastewater

treatment processes at these industrial

facilities in the context of the entire

industrial facility, not just the

laundering portion of the facility.

Addressing on-site laundering

discharges along with other industrial

discharges in an industry allows EPA to

examine all of the production and

processing equipment used by the

industry, all of the discharges in an

industry, all the potential wastewater

treatment applicable to the industry,

and all of the economic impacts of any

such national regulation for the

industrial subcategory as a whole. This

is consistent with EPA’s efforts to make

common-sense regulatory decisions.

EPA has also considered concerns

expressed by industrial launderers that

by excluding on-site laundering of

industrial items, EPA has created an

incentive for businesses to switch from

using industrial launderers covered by

the rule to on-site laundering. EPA does

not believe this will happen because the

average increased price per pound of

laundering as a result of the proposed

rule ($0.003 per pound) is so small that

the cost of buying the equipment and

operating the equipment on-site (capital,

operation and maintenance including

labor, chemicals, water) to do on-site

laundering rather than using industrial

launderers would not be justified.

Furthermore, an increase in pollutant

loads at the facility may necessitate

additional changes in the facility’s

NPDES permit if it is a direct discharger

or its pretreatment permit issued by the

local POTW if it is an indirect

discharger. See Section 8 of the EA and

Chapter 6 of the Development

Document.

EPA also looked at the types of items

that were water washed to determine if

any specific items should be excluded

from regulation. EPA reviewed the

available data to determine differences

in types of items laundered, and

determined that wastewater

characteristics of denim prewash items

and linen items are significantly

different from the wastewater

characteristics of industrial items, based

on a statistical comparison of untreated

wastewater pollutant concentrations.

The pollutant concentrations in

wastewater from laundering denim

prewash items and linen items are lower

on average than industrial item

wastewater concentrations. The

available data indicate that the pollutant

concentrations are lower for denim

prewash items and linen items, and

POTWs can adequately treat wastewater

streams generated from these types of

items. Therefore, EPA is excluding

facilities discharging 100 percent denim

prewash items and linen item

wastewater from the scope of this

proposed rule.

EPA is excluding new items from

regulation since these items are

laundered prior to being used for their

intended purpose and therefore may not

contain pollutants at concentrations that

are incompatible with or interfere with

POTWs.

The rule also would not apply to

certain small facilities; see ‘‘Regulated

Entities’’ discussion above and rule text

below.

D. Summary of Public Participation

EPA encouraged full public

participation in developing the

proposed rule. During the data gathering

activities that preceded development of

the proposed rule, EPA met with

industry trade associations, state and

local governments, and industrial

laundry and linen facilities. EPA has

also participated in numerous industry

talks and meetings. To further public

participation on this rule, on March 4,

1997, EPA held a public meeting about

the content and status of the proposed

regulation. The meeting was announced

in the Federal Register (62 FR 3849;

January 27, 1997) and information

packages were distributed at the

meeting. The public meeting also gave

interested parties an opportunity to

provide information, data, and ideas or

comments on key issues.

During the development of the

proposed rule, EPA sent a screener

questionnaire to assess the number of

facilities that could potentially be

considered industrial laundries, and

followed this with a detailed

questionnaire to a stratified random

sample of the industry under authority

of section 308 of the CWA. During the

design of the detailed questionnaire,

EPA met with industry trade

associations to discuss EPA’s plans to

issue a questionnaire; and distributed

several drafts of the questionnaire to

both the industry trade associations and

the Natural Resources Defense Council,

Inc., for review and comment. The

detailed questionnaire was subsequently

completed, reviewed and approved by

the Office of Management and Budget

(OMB) and sent to industrial laundry

facilities. Two trade associations, the

Textile Rental Services Association of

America (TRSA) and Uniform and

Textile Service Association (UTSA) sent

letters to OMB supporting EPA’s data

collection efforts, particularly the

detailed questionnaire. EPA held

workshops for the public on how to

complete the detailed questionnaire.

EPA also sent a screener

questionnaire to hotels, hospitals, and

prisons to assess whether these facilities

should be included in the scope of the

industrial laundries regulation. Also,

following receipt of the detailed

questionnaire responses and as part of

the technology performance data

gathering effort, EPA requested detailed

monitoring data from 37 facilities that

had already received the detailed

questionnaire so that data specific to

these facilities could be evaluated as

part of EPA’s analyses.

IV. Description of the Industry

Industrial laundry facilities are

located in all 50 states and all 10 EPA

regions. By State, the largest number of

industrial laundries are in California. By

EPA Region, the largest concentration of

industrial laundries is in Region V. Most

of the industrial laundering facilities are

in large urban areas. EPA estimates that

there are 1,747 facilities nationwide.

Industrial laundries vary in size from

one- or two-person facilities to large

corporations that operate many facilities
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66187

with hundreds of employees

nationwide. Annual laundry production

per facility ranges from 44,100 to

32,620,000 pounds.

Facilities launder most items using

water washing. Water washing involves

washing items in water. Some facilities

launder items using dry cleaning, which

involves washing items in an organic

solvent. Facilities that only dry clean

(with solvent washing) are not covered

by this proposed rule. Dry cleaning is

not a water washing process and

generates little, if any, wastewater,

therefore EPA excluded this process

from this proposed rule. The pollutants

generated in the dry cleaning operation

are recovered from the solvent through

distillation and then disposed of off-site

as a hazardous waste. Air emissions

from dry cleaning may be controlled by

EPA in Maximum Achievable Control

Technology (MACT) standards issued

under the Clean Air Act. In some cases,

facilities combine the two processes to

wash items that have large amounts of

both water soluble and organic-solvent

soluble soils. When water washing and

dry cleaning are performed in series

without drying the items between the

solvent and water phases, the process is

called dual-phase washing. The order in

which these processes are performed

depends on the solvent used, type of

soil, and drying energy requirements.

Typically, in dual-phase washing, the

solvent wash occurs prior to the water

wash; none of the facilities responding

to the detailed questionnaire reported

performing water washing followed by

solvent wash. Facilities performing

dual-phase washing of industrial items

are covered by this proposed rule if they

process industrial textile items.

At some facilities, dust mops are not

water washed, but are cleaned and

treated with heated oil instead of water.

After cleaning, the oil is extracted from

the mops, leaving them coated with the

desired quantity of oil. Since the oil

treatment of mops is not a water

washing process and generates no

wastewater, EPA excluded this process

from this proposed regulation.

A more detailed description of the

industry is included in the Industrial

Laundries Development Document

contained in the record for this

proposed rule.

V. Summary of Data Gathering Efforts

EPA has collected data from various

sources. EPA has collected industrysupplied data from industrial laundries

through the screener questionnaires,

detailed questionnaires and the detailed

monitoring data requests. EPA has also

collected data through site visits and

sampling activities. EPA distributed a

screener questionnaire in 1993 and a

supplemental screener questionnaire in

1994 to develop the scope of the rule,

identify the population of the industry,

and select facilities to receive the moredetailed questionnaire. Also, in

response to comments from industrial

laundry and linen trade associations,

EPA mailed 100 screener questionnaires

in January 1995 to hospitals, hotels, and

prisons, which potentially operate onsite laundries.

The industrial laundries industry

detailed questionnaires were sent to a

stratified random sample of facilities

that were identified from two sources:

Trade association mailing lists and

information obtained from Dun &

Bradstreet. These sources produced a

list of 3,726 possible facilities

generating industrial laundry

wastewater. Based on responses to the

screener questionnaires, EPA estimated

there were 1,960 facilities generating

industrial laundry wastewater.

To minimize the burden on the

respondents to the trade association

screener questionnaire, EPA chose to

send detailed questionnaires to only a

selected sample group of facilities. EPA

grouped facilities by the type of items

they laundered, their 1992 revenues,

and the type of wastewater treatment

they had in place. The Dun & Bradstreet

detailed questionnaire (which was

identical to the trade association

detailed questionnaire in content) was

based on groupings of Standard

Industrial Classification codes of 7218

(industrial laundering) and 7213 (linen

supply servicing). This technique is

known as stratification of the

population. Depending on the number

of facilities within the strata, EPA either

censused or chose a random sample of

facilities within each strata. The chosen

facilities were given survey weights

based on a facility’s probability of

selection. If the stratum was censused,

those facilities represent themselves

only. Otherwise, the facility is given a

survey weight that allows them to

represent themselves and other

facilities, within that stratum, that were

not selected to receive a detailed

questionnaire.

Of the 1,960 facilities generating

industrial laundry wastewater, 255

received detailed questionnaires and

were used to develop survey weights.

After analyzing responses to the

questionnaires, EPA chose to exclude

facilities that launder 100% linen items.

EPA was left with 193 complete

responses representing 1,747 industrial

laundry facilities nationwide. After

examining economic impacts, EPA then

decided to exclude existing facilities

that launder less than one million

pounds of incoming laundry per

calendar year and less than 255,000

pounds of shop and/or printer towels/

rags per calendar year. Therefore, EPA

estimates the total number of facilities

that currently would be subject to the

standards in this proposed rule to be

1,606 facilities. All analyses of impacts

of the rule are based on 193

questionnaire respondent facilities and

then the survey weight is applied to

develop national estimates for all

facilities. See the Statistical Support

Document for the Industrial Laundries

Pretreatment Standards for additional

information on the development of

survey weights.

The responses to the detailed

questionnaires provided EPA with

detailed technical, economic, and

financial information from industrial

laundry and linen supply facilities. EPA

used the information reported to

develop an industry profile, characterize

industry production and water use,

develop pollutant loadings and

reductions estimates, and develop

compliance cost estimates.

In 1995, EPA mailed out 37 requests

for detailed monitoring data to a

selected group of industrial laundries.

EPA identified this selected group of

facilities because they indicated in their

initial responses in the detailed

questionnaires that they had available

monitoring data that EPA determined

might be useful in characterizing

performance of certain treatment

technologies. EPA has also collected

data through site visits and sampling

activities. EPA conducted more than 30

site visits between 1992 and 1997 to

collect information about industrial

laundry processes, water use practices,

pollution prevention practices,

wastewater treatment technologies, and

waste disposal methods. EPA conducted

eight sampling episodes to characterize

industrial laundry wastewaters and to

assess treatment technology

effectiveness. A more detailed

description of these data collection

efforts can be found in Chapter 3 of the

Industrial Laundries Development

Document.

VI. Development of the Pretreatment

Standards

A. Wastewater Characteristics

Industrial laundry facilities generate

wastewater discharges from water

washing industrial textile items. All of

the facilities identified in the data

gathering phase of this rulemaking were

found to be indirect dischargers and

discharge all laundry process

wastewater to publicly owned treatment

works.
66188 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

The detailed questionnaires requested

information on the types of analytes

tested during wastewater sampling

activities performed at the facilities in

1993. The facilities reported analytes in

the following categories: oil and grease/

total petroleum hydrocarbons (O&G/

TPH), conventional pollutants, metals,

organics, and pesticides.

Based on data collected through the

detailed questionnaires and sampling

and analysis of industry wastewater,

EPA has determined that 67% of the

total industry raw wastewater toxic

pollutant loading is generated from

laundering of shop and printer towels.

Shop and printer towels represent 80%

of the raw wastewater toxic pollutant

loading from industrial laundry items.

B. Selection of Pollutant Parameters To

Be Regulated

1. Pollutants Regulated

EPA collected data to determine the

conventional, toxic/priority, and

nonconventional pollutants present in

industrial laundries wastewaters. EPA

analyzed industrial laundries

wastewater for 315 pollutants consisting

of four conventional, 98 toxic or

priority, and 213 nonconventional

organic and metal pollutants, during the

1993–1996 industrial laundries

sampling program. This section of the

preamble discusses how EPA

determined the pollutants to be

regulated under the selected option.

Other options have the same list of

regulated pollutants, although EPA’s

rationale for regulating these pollutants

varies depending on the option. This is

discussed in Chapter 7 of the

Development Document.

EPA reduced the list of 315 pollutants

to 72 pollutants for further

consideration for control using the

following criteria: eliminating

pollutants never detected in laundry

wastewater, pollutants detected only a

small percentage of the time in laundry

wastewater (less than 10% of the time),

pollutants detected in source water at

concentrations similar to concentrations

in laundry wastewater, pollutants

analyzed for screening purposes, but not

analyzed in a quantitative manner due

to a lack of acceptable analytical

methods, and pollutants likely to be

adequately regulated on a case-by-case

basis by POTWs using the current

regulations on controlling pass through

and interference. (See Development

Document, Chapter 7).

For the selected option (CP-IL), the 72

pollutants were subsequently reduced to

59 pollutants by eliminating n-alkanes

(11 separate pollutants), which make up

part of TPH as measured by SGT-HEM,

as well as two pollutants used as

treatment chemicals (Aluminum and

Iron). EPA also eliminated 31 pollutants

from regulation because these pollutants

are not removed by the treatment

technology for the selected option or

because these pollutants were present

below treatable concentrations in

wastewaters influent to the treatment

system and therefore would not be

substantially removed by the treatment

technology. For purposes of this rule,

EPA considers treatable concentrations

to be greater than 10 times the method

detection level. Based on these analyses,

this left EPA with 28 pollutants under

consideration for regulation.

Before proposing pretreatment

standards, EPA examines whether the

pollutants discharged by the industry

pass through a POTW to waters of the

U.S. or interfere with the POTW

operation or sludge disposal practices.

Generally, in determining whether

pollutants pass through a POTW, EPA

compares the percentage of the

pollutant removed by well-operated

POTWs achieving secondary treatment

with the percentage of the pollutant

removed by facilities meeting BAT

effluent limitations. In this case, where

only pretreatment standards are being

considered, EPA compared the POTW

removals with removals achieved by

indirect dischargers using the candidate

technology that satisfies the BAT

factors. For specific pollutants, such as

volatile organic compounds or highly

biodegradable compounds, EPA may

use other means to determine pass

through. For volatile compounds, a

volatile override test based on the

Henry’s Law Constant is used to

determine pass through. If a pollutant

has a Henry’s Law Constant greater than

2.4 x 10–5 atm-m 3/mole, it is generally

determined to pass through because it is

assumed to be sufficiently volatile such

that a significant portion of the

compound would not be treated by the

POTW. For highly biodegradable

compounds, the pass through

determination may be conducted using

engineering modeling.

The primary source of POTW data

was the Fate of Priority Pollutants in

Publicly Owned Treatment Works (also

known as the 50 POTW Study). Since

the 50 POTW Study did not cover all

the pollutants detected in industrial

laundry wastewater, EPA used

additional data from the Risk Reduction

Engineering Laboratory (RREL)

database. The RREL database EPA used

included data relating to activated

sludge and aerated lagoons reflecting

POTW secondary treatment from

domestic and industrial wastewater

sources.

EPA eliminated three conventional

pollutants (O&G, BOD, and TSS) from

regulation without conducting the

percent removal comparison because

EPA believes POTWs adequately treat

these parameters in the concentrations

found in IL wastewaters. Thus, these

parameters are deemed to not pass

through. EPA conducted the pass

through analysis on the remaining 25

pollutants.

For this proposed rule, the percent

removal comparison between indirect

dischargers using the candidate PSESBAT technology and POTWs and the

volatile override test were used to

determine pass through. Since EPA has

not identified any direct dischargers,

EPA used PSES percent removals for

evaluating pass through. EPA finds that

a pollutant passes through when the

average percentage removed nationwide

by well-operated POTWs (those meeting

secondary treatment requirements) is

less than the percentage removed by

facilities meeting candidate PSES

standards for that pollutant.

EPA eliminated POTW and PSES data

from the analysis where the influent

levels for the pollutant were less than 10

times the method detection level

because EPA reasoned that low

removals may simply reflect low

influent rather than ineffective

treatment. For pollutants for which

none of the POTW influent

concentrations exceeded 10 times the

method detection level, in order to

conduct the analysis using the 50 POTW

Study, EPA modified its editing criteria

to eliminate data where the influent

values were less than 20 μg/L or the

method detection level. EPA selected 20

μg/L or the method detection level

because for pollutants with low influent

concentrations, i.e., less than 20 μg/L or

the method detection level, the effluent

concentrations were consistently below

the detection level and could not be

precisely quantified.

EPA then averaged the remaining

influent data and the remaining effluent

data. The percent removals achieved for

each pollutant were determined from

these averaged influent and effluent

levels. This percent removal was then

compared to each of the PSES treatment

technology options.

Of the 25 pollutants that were

evaluated, 23 were found to pass

through. A more detailed description of

the results of the pass through analysis

is provided in Chapter 7 of the

Development Document.

The remaining 23 pollutants were

reviewed in an attempt to streamline the

control and compliance process. To do

this, EPA determined whether certain

pollutants could serve as ‘‘indicator’’
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66189

pollutants for others. Because many of

the pollutants originate from similar

sources and have similar treatability

properties, setting standards for some

‘‘indicator’’ pollutants would effectively

control a broader set of pollutants.

Based on this analysis, EPA determined

that setting limits for 11 pollutants

would control the remaining 23

pollutants. The list of 11 pollutants is as

follows: SGT-HEM, Copper, Lead, Zinc,

Bis(2-Ethylhexyl) Phthalate,

Ethylbenzene, Naphthalene,

Tetrachloroethene, Toluene, m-Xylene

and o&p-Xylene. The limitations for the

Xylenes parameters contained in the

proposed rule are based on data

obtained from EPA sampling episodes

using EPA Method 1624 and detailed

monitoring questionnaires which

reported EPA Method 624 which are

contained in Part 136 but not identified

for use in measuring Xylenes. A more

detailed description of the selection of

the regulated pollutants and the

pollutants controlled by regulation of

these pollutants is in Chapter 7 of the

Development Document.

EPA is proposing to establish PSES

and PSNS that would regulate SGTHEM as an indicator pollutant

controlling the discharge of toxic and

nonconventional pollutants. Chemical

precipitation technology has shown that

the SGT-HEM limitation is a good

indicator reflecting the correct operation

of the control technology that results in

removals of both organic and metal

compounds. EPA is regulating SGTHEM rather than total recoverable oil

and grease since SGT-HEM more closely

corresponds to the toxic portion of oil

and grease in industrial laundry

wastewaters, while POTWs can

generally treat the other portions of oil

and grease consisting of vegetable oils,

animal fats, soaps, etc. Also, since

petroleum-based oils degrade slowly at

the POTWs, if sufficient quantities exist

in the influent, it can pass through the

treatment plant as discussed in

Pretreatment of Industrial Wastes

prepared by the Water Environment

Federation, 1994. The SGT-HEM

measurement used to develop the

limitations is based on the proposed

analytical method 1664 (Silica Gel

Treated N-Hexane Extractable Material;

‘‘SGT-HEM’’) (61 FR 1730; January 23,

1996) and not on the current method

contained in 40 CFR Part 136, which

uses freon extraction. The data collected

from the detailed monitoring

questionnaires are based on the current

Part 136 method of measuring TPH,

while the EPA sampling data are based

on the proposed Method 1664, which

measures SGT-HEM. EPA proposes to

regulate SGT-HEM based on calculating

limitations with EPA sampling data

only. EPA is soliciting comment or

information on any additional data

regarding the use of this analytical

method.

EPA is also regulating SGT-HEM

based on interference. Petroleum-based

oils have a low rate of biodegradation at

the POTWs. These oils tend to coat the

biological organisms, preventing or

reducing oxygen transfer and

degradation of other organics as

discussed in Pretreatment of Industrial

Wastes prepared by the Water

Environment Federation, 1994.

Pretreatment coordinators have

indicated that interference can be a

problem at POTWs as discussed further

in Section IX.G.

2. Pollutants Not Regulated

Tables 7–3,7–4, and 7–5 in Chapter 7

of the Development Document list the

pollutants EPA proposes not to regulate

and the bases for these decisions.

C. Available Treatment Technologies

1. Current Practice

Facilities in the detailed

questionnaire reported having a range of

wastewater treatment equipment from

no treatment to well-operated Chemical

Precipitation (CP) or Dissolved Air

Flotation (DAF) systems. Many

industrial laundry facilities currently

have no treatment (approx. 87%).

Although many facilities have no

treatment, some facilities have reported

that they have best management

practices in place to limit pollution.

Many laundries have adopted the

practice of requiring incoming laundry

to have no free liquids. Liquids may be

removed through various mechanisms at

the laundry or by the customer (e.g.,

hand wringing, mechanical wringing, or

centrifuging).

EPA, based on responses to the

detailed questionnaire, considered

several technologies to develop

standards for this industry. The major

wastewater treatment technologies

reported included: Chemical Emulsion

Breaking (CEB), DAF, and CP. Other

technologies reported included:

screening, equalization, gravity settling,

sludge dewatering, pH adjustment,

ultrafiltration, centrifugation, filtration,

oil/water separation, carbon adsorption,

air stripping and vacuum degassing. In

addition, facilities reported dry cleaning

and steam tumbling as in-process

treatment technologies to remove

pollutants from items prior to water

washing.

During the site visit and field

sampling phase of the proposed rule

development and as follow up to

responses in the detailed

questionnaires, EPA identified three

major technologies for further

evaluation. These major technologies,

CEB, DAF and CP are described below.

CEB is used primarily to remove oil

and grease, as well as other related

pollutants, from process wastewater

streams. CEB is effective in treating

wastewater streams having stable oil-inwater emulsions. The treatment consists

of lowering the pH of the wastewater to

break the emulsions, and skimming the

surface of the water to remove the

floating substances.

DAF is used to remove suspended

solids, oil, and some dissolved

pollutants from process wastewater.

DAF treatment involves coagulating and

flocculating the solids and oil and

grease and then floating the resulting

floc to the surface using pressurized air

injected into the unit and removing the

floating material. Some DAF systems

also have the means to remove material

that settles to the bottom of the tank on

a continuous basis.

CP is used to remove dissolved

pollutants from process wastewater.

Precipitation aids, such as lime, work by

reacting with the cations (e.g., metals)

and some anions to convert them into

an insoluble form (e.g., metal

hydroxides). The pH of the wastewater

also affects how much pollutant mass is

precipitated, as pollutants precipitate

more efficiently at different pH ranges.

Coagulation and flocculation aids are

usually added to facilitate the formation

of large agglomerated particles that

settle more readily and can be removed

from the bottom of the clarifiers.

In addition to these major

technologies identified and described

above, a number of controls that are

common to or make up part of the

treatment systems at many facilities

include: screening, equalization, gravity

settling and pH adjustment or

neutralization.

Screening is often performed prior to

subsequent treatment to remove grit and

suspended solids that may potentially

damage or clog process equipment

located downstream.

Equalization controls fluctuations in

flow and pollutant loadings in process

wastewater prior to treatment to

overcome operational problems that

may result from the fluctuations, reduce

the size and cost of the downstream

treatment units, and improve the overall

performance of these units.

Gravity settling is primarily used to

remove suspended solids, including

pollutants that are in insoluble

particulate form such as metals from

industrial laundry process wastewater.
66190 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

Most facilities currently have gravity

settling alone without chemical

addition. The wastewater is typically

collected in a catch basin where the

water is detained for a period of time,

allowing solids with a higher specific

gravity to settle to the bottom of the tank

and solids with a lower specific gravity

to float to the surface. The effectiveness

of the solids settling depends on the

characteristics of the laundry

wastewater, the length of time the

wastewater is held in the catch basin

and the regular maintenance of the

basin, especially regular removal of the

solids.

pH adjustment is used to increase

treatment effectiveness—since many

treatment technologies used in this

industry are sensitive to pH

fluctuations—and to meet discharge

requirements.

Other wastewater treatment

technologies identified as being used in

this industry are carbon adsorption, air

stripping with and without carbon

adsorption, ultrafiltration,

centrifugation, sludge dewatering,

filtration, oil/water separation without

chemical addition, and vacuum

degassing.

• Carbon adsorption uses activated

carbon to remove dissolved VOCs from

process wastewater.

• Air stripping is normally performed

in a countercurrent, packed tower, or

tray tower column. The wastewater is

introduced at the top of the column and

allowed to flow downward through the

packing material or trays. Air is

simultaneously introduced at the

bottom of the column and blows

upward through the water stream.

Volatile organics are stripped from the

water stream, transferred to the air

stream, and carried out of the top of the

column with the air, preferably through

activated carbon. The treated water is

discharged out of the bottom of the

column.

• Ultrafiltration uses semipermeable

polymeric membranes to separate

emulsified or colloidal materials

suspended in the process wastewater

stream by pressurizing the liquid so that

it permeates the membrane.

• Centrifugation applies centrifugal

forces to settle and separate higher

density solids from process wastewater.

Some facilities use centrifugation as a

method to separate solids from

wastewater; and centrifugation can be

chemically enhanced to remove

additional pollutants.

• Sludge dewatering processes

remove water from sludge generated

from the wastewater treatment process.

Many industrial laundry facilities

(31%), including some of those with

only screening or gravity settling but no

additional treatment, reported

dewatering their sludge prior to

disposal. The types of dewatering

devices used in the industrial laundries

industry include: plate and frame filters,

rotary vacuum filters, and sludge dryers.

• Industrial laundries use bag and

sand filters to remove solids from

wastewater. Among the facilities visited

or responding to the detailed

questionnaire, filtration most common

to this industry included bag filters and

sand filters.

• Oil/water separation without

chemical addition technology removes a

separated oil layer. The oil layer can be

removed by a skimming device or

decanted from the wastewater.

• EPA sampled one facility using

vacuum degassing. At this facility the

vacuum degasser was intended to

remove organic compounds.

EPA identified the following inprocess treatment technologies that

remove pollutants from industrial

laundry items prior to water washing:

• Dry cleaning involves cleaning

soiled items with an organic-based

solvent that removes VOCs as well as

organic pollutants (e.g., oil and grease).

The pollutants generated in the dry

cleaning operation are recovered from

the solvent through distillation and then

disposed of off-site as a hazardous

waste.

• Steam tumbling involves agitating

soiled items within a modified washer/

extractor while steam is injected into

the chamber. The tumbling items

contact the steam, which removes the

VOCs. The steam is condensed, and the

pollutants are recovered through a

phase separation and are then disposed

of as a hazardous waste.

2. Technologies Rejected From Further

Consideration

The technologies described above

were those reported in the detailed

questionnaire. EPA then determined

that certain major technologies should

be considered as best available in the

industry and chose to sample these

candidate technologies.

Based on the data EPA gathered and

evaluated, EPA rejected the following

technologies from further consideration:

bag filtration, sand filtration,

ultrafiltration, oil/water separation and

vacuum degassing.

EPA removed sand and bag filtration

from the list of technology options

because data for both sand filtration and

bag filtration showed poor removals of

most pollutants.

EPA sampled one facility using

ultrafiltration. Based on conversations

with industrial laundries and corporate

contacts, many laundry facilities that

have tried ultrafiltration as wastewater

treatment have reported problems with

fouling, and solids building up in the

unit requiring constant maintenance

and/or inhibiting the performance of the

unit. Some facilities have replaced

ultrafiltration units with dissolved air

flotation or chemical precipitation units.

Therefore, EPA did not further consider

ultrafiltration as a regulatory option.

EPA investigated oil/water separation

as part of the data analysis. After some

assessment, EPA determined that oil/

water separation without chemical

addition to lower the pH is not nearly

as effective as CEB. EPA sampled one

facility using CEB.

Vacuum degassing, which was

sampled for the removal of organics, did

not remove organic pollutants

effectively. Therefore, EPA did not

continue evaluating this technology as

an option. See Chapter 9 of the

Development Document.

D. Technology and Regulatory Options

Considered

1. Initial Regulatory Options for PSES

and PSNS

For the proposed rule, EPA initially

developed the following regulatory

options based on evaluating screener

and detailed questionnaire data

submitted by industry. In addition to

using the major technologies described

above (CEB, DAF, and CP), EPA

considered regulatory options using

stream splitting, a common practice at

some facilities. Stream splitting

provides a means of treating a portion

of the total wastewater generated at

industrial laundries. Stream splitting

may be used to isolate and treat a stream

with a higher pollutant load, while a

stream with a lower load is either

recycled and reused or discharged to the

POTW without treatment. A divided

trench and sump system is used to split

process wastewater streams. Washer

modification (dual valves) is also part of

stream splitting.

The initial regulatory options

included standards based on: Chemical

Emulsion Breaking of wastewater from

the washing of heavy industrial items

only (CEB-heavy), Dissolved Air

Flotation of wastewater from the

washing of heavy industrial items only

(DAF-heavy), Chemical Precipitation of

wastewater from the washing of heavy

industrial items only (CP-heavy),

Dissolved Air Flotation of all

wastewater (DAF-all), Chemical

Precipitation of all wastewater (CP-all)

and a Combined Option establishing

limits based on using either DAF or CP

of all wastewater (Combo-all). For the
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66191

‘‘heavy’’ options in this proposed rule,

heavy is defined as wastewater from the

laundering of shop towels, printer

towels, fender covers, filters and mops.

As part of the options listed above EPA

also included gravity settling, screening,

equalization, pH adjustment, sludge

dewatering (for CP and DAF only), and

the use of common pollution prevention

practices (or best management

practices).

Based on evaluation of the effluent

concentration data from these site visits

and sampling, some of the initial

options were no longer pursued, or were

further modified. The DAF-heavy and

CP-heavy options were determined not

to be appropriate because at some

facilities the untreated waste streams for

those items not considered to be heavy

by the facility had higher concentrations

of pollutants than the average treated

effluent concentrations for the same

pollutants. This problem, in part, was

caused by the different mix of ‘‘heavy’’

items being laundered at the different

facilities from which wastewater data

were obtained. If sufficient treated

effluent data could be obtained related

to the laundering of the same set of

‘‘heavy’’ items, the heavy option may be

a feasible alternative for the final rule.

However, any option that would

regulate only the wastewater from

washing heavy industrial items would

require an in-plant compliance

monitoring location or a separate

discharge point to the sewer after the

treatment system which could increase

the compliance burden on the control

authority. In some cases where the endof-pipe monitoring for some parameters

was still required based on local limits,

the costs of this option would increase

due to the in-plant plus end-of-pipe

monitoring. At the same time, EPA

recognizes that targeting the rule to

heavy items only could reduce costs to

the regulated community by removing

some facilities from the scope of the

rule. Some facilities could also save

money by segregating heavy items from

other items and treating only the heavy

items. The CEB-heavy option was

determined not to be feasible due to less

pollutant removals at higher costs than

the DAF-heavy and CP-heavy options.

See Chapters 9 and 10 of the

Development Document. EPA solicits

comments and data on the feasibility of

either the DAF or CP heavy only options

where the definition of heavy includes

only the laundering of printer rags, shop

towels, mops, fender covers and filters.

2. Modified Regulatory Options

EPA evaluated proposing

pretreatment standards for the entire

facility wastestream based on only a

portion being treated, specifically only

the portion of facility wastewater

generated by laundering industrial items

was costed for treatment by DAF and

CP. The basis for costing partial

treatment is that EPA’s data shows these

standards can be met by treating only

the portion of wastewater from

laundering industrial items. EPA called

these options DAF–IL, CP–IL, Combo-IL

and Combo-IL2Lim.

EPA evaluated the combo option in

two scenarios. Under the first scenario

(Combo-IL) either DAF or CP would

form the basis of the standards by

establishing one set of standards based

on the less stringent of the two

standards for each regulated pollutant

for the two technologies. Having one set

of such standards would allow some

flexibility for facilities with either

technology to meet the limitations. This

option would base the standard for each

parameter on the lesser performance

between DAF and CP, and based on

current data, remove less total

pollutants.

Under the second combo scenario

(Combo-IL2Lim), facilities with DAF in

place as of the publication date of the

proposal would have to comply with the

standards based on DAF and all other

facilities would have to comply with

standards based on CP.

EPA additionally considered an

organics control option, which involves

the use of steam tumbling for treatment

of shop and printer towels and mops for

removal of organic pollutants.

EPA also considered proposing a no

regulation option, but rejected it

because the available discharge loadings

data identified a number of pollutants

that were estimated to pass through or

have the potential to interfere with

POTW operations.

Under Section 307(b) of the CWA,

EPA is directed to establish

pretreatment standards that prevent the

discharge of pollutants to POTWs that

interfere with, pass-through, or are

otherwise incompatible with the

operation of POTWs. EPA has

interpreted the pass-through provision

to mean that a pollutant ‘‘passes

through’’ the POTW if the removal

efficiency of an available pretreatment

option is greater than the removal

efficiency of the POTW. Based on

available data, EPA believes that

pretreatment technology is available to

the industrial laundries industry that

removes some pollutants with greater

efficiency than is achieved by most

POTWs.

Nonetheless, both the Small Business

Regulatory Enforcement Fairness Act

(SBREFA) panel, which is comprised of

representatives from three federal

agencies (EPA, the Small Business

Administration, and the Office of

Management and Budget), and small

entity representatives recommended

that EPA solicit comments on a no

regulation option. EPA has the

discretion under the CWA to decline to

regulate an industrial subcategory based

on lack of pollutant loadings, the small

number of affected facilities, or other

relevant factors, one of which could be

a determination that there is no pass

through or interference due to the

pollutant discharges of the industry.

The SBREFA Panel noted, among other

things, that ‘‘the total pollutant loadings

(pre-regulation) are not as high for this

industry as they were for most

industries with effluent guidelines in

place and that the regulatory options are

not as cost-effective as those selected for

most other effluent guidelines.’’ In

addition, EPA notes that if we did not

use a toxic weighting factor for TPH (see

Section VII.E below), the cost per pound

equivalent removed of this rule relative

to previous rules would be still higher.

As indirect dischargers, industrial

laundries are subject to the general

prohibitions in the pretreatment

requirements and any additional

pretreatment requirements set by local

POTWs. Any pass-through or

interference problems potentially

caused by a laundry can be directly

addressed by the POTW through the

establishment of appropriate local

limits. Some POTWs support the no

regulation option because it provides

them with the flexibility to design less

stringent local pretreatment

requirements that are appropriate to

local conditions. Other POTWs prefer to

have EPA establish uniform

pretreatment standards because of the

resources required to determine and

enforce local limits on a case-by-case

basis.

EPA solicits comments on the no

regulation option and encourages

commenters to support such arguments

with information and data, particularly

data on the loadings and the degree of

pass through at POTWs. Further, EPA

encourages commenters to explain how

the no regulation option would be

consistent with those requirements of

sections 301, 304 and 307 of the CWA

that require the control of pollutants

discharged to POTWs that pass through

or interfere with POTW operations.

Based on the above evaluations, EPA

decided to evaluate the following

options: organics control(OC), combo-IL,

combo-IL2Lim, DAF–IL, and CP–IL.

E. Costs

EPA estimated the cost for industrial

laundries to implement each of the
66192 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

model technologies considered for the

proposed standards. These estimated

costs are summarized in this section and

discussed in more detail in the

Development Document. All cost

estimates in this preamble are expressed

in 1997 dollars. The cost components

reported in this section represent

estimates of the investment cost of

purchasing and installing equipment,

and the annual operating and

maintenance costs associated with that

equipment. In section VII, costs are

expressed in terms of a different cost

component, total annualized costs,

which are used to estimate economic

impacts. Annualized costs better

describe the actual compliance costs

that a facility/company would incur,

allowing for interest, depreciation, and

taxes. A summary of the economic

impact analysis for the proposed

regulation is contained in section VII of

today’s notice. See also the Economic

Assessment.

EPA estimated the cost for

implementing the candidate PSES by

calculating the engineering costs of

meeting the required effluent reductions

for each industrial laundry facility. EPA

used information from the 193 in-scope

facilities responding to the

questionnaire as the basis for the cost

estimates calculated by the cost model

for these facilities. Using statistically

calculated facility weighting factors,

EPA then extrapolated the results to the

entire industrial laundries industry. The

facility-specific engineering cost

assessment for PSES began with a

review of present wastewater treatment

technologies at each facility. For

facilities without treatment-in-place

equivalent to the candidate PSES

technology options, EPA estimated the

cost to upgrade the facility’s existing

treatment technology or if none was in

place install treatment to achieve the

proposed discharge standards. EPA

based these estimates on vendor quotes

and engineering judgment. Facilities

that had treatment in place equivalent to

that option were costed for monitoring

only. EPA believes that this approach

overestimates the costs to achieve the

candidate PSES standards because many

facilities can achieve the standards

without using all of the components of

the technology basis or by treating

wastewater from certain items only. For

the current options, EPA assumed

treating all wastewater except for

wastewater from linen items, denim

prewash items, and new items. EPA

solicits comments on these costing

assumptions. See Development

Document for more details. The

following table summarizes by option,

the capital expenditures, the annual

operating and maintenance costs, and

the annual pretax cost for implementing

PSES. Note that pretax costs are

presented here, but are not used in

determining economic achievability of

the proposed rule on the industrial

laundries industry. Rather, the posttax

costs, the costs industry actually bears,

are used to determine economic

achievability (see Table VII.C.3.1). The

annual costs in this table below also

account for the ability of some facilities

to haul wastewater at a lower cost than

the cost of installing and operating the

pollution control technology.

TABLE VI.E.1. COSTS OF IMPLEMENTING PSES REGULATIONS

[In millions of 1997 dollars]

Options Capital

costs

Annual operating and

maintenance costs

Annual

pretax cost

OC ..................................................................................................................................................................... 290 35.0 65.7

CP–IL ................................................................................................................................................................ 470 86.6 136.4

DAF–IL .............................................................................................................................................................. 364 138.2 176.8

Combo-IL .......................................................................................................................................................... 440 98.5 145.1

Combo-IL2Lim .................................................................................................................................................. 364–470 86.6–138.2 136.4–176.8

In addition to costs, EPA estimated

the removals for industrial laundry

facilities for the following technology

options.

TABLE VI.E.2. REMOVALS FOR PSES

OPTIONS

Option Removals (lb-eq)

OC ................................... 5,278

CP–IL .............................. 407,358

DAF–IL ............................ 402,921

Combo-IL ........................ 402,253

Combo-IL2Lim ................ 402,921–407,358

The estimated removals summarized

in the table are discussed in more detail

in the Development Document. The

removals are based on the difference

between each facility’s current

discharge load and each facility’s

discharge load after implementation of

the proposed rule.

F. Rationale for Selection of PSES and

PSNS

1. Existing Sources

After considering all of the technology

options described above, and in light of

the factors specified in section

304(b)(2)(B) of the CWA, EPA has

tentatively selected Chemical

Precipitation-IL (CP–IL) as the

technology basis for the pretreatment

standards for existing sources in the

proposed rule. As discussed in more

detail below, the proposed rule would

exclude existing facilities laundering

less than one million pounds of

incoming laundry per calendar year and

less than 255,000 pounds of shop and/

or printer towels/rags per calendar year.

However, these excluded facilities

would still be subject to local

pretreatment standards where

appropriate. If any excluded facility

launders one million pounds or more of

incoming laundry or 255,000 pounds of

shop and/or printer towels/rags per

year, it will no longer be excluded from

the standards. Further, once a facility is

subject to the standards, even if the

facility becomes ‘‘small’’ as defined by

the rule’s exclusion, it would still be

subject to the rule. This is because once

a facility has installed wastewater

treatment to meet the requirements of

the rule, it is technologically available

and economically achievable for the

facility to continue to comply with the

standards.

The record establishes that this option

is technically available. As discussed in

more detail below, EPA also tentatively

concludes that this option is

economically achievable and represents

the best performance that is

economically achievable. Further, this

option has acceptable non-water quality

environmental impacts.

The specific standards proposed in

this rule were derived based on a

statistical analysis of the performance of
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66193

chemical precipitation in industrial

laundries that are sufficiently similar to

all facilities that are subject to the

standards, as discussed below and in

the Development Document. Although

chemical precipitation is currently only

used at 3 percent of industrial laundry

facilities, chemical precipitation is a

widely used technology in other

industries such as the metal products

and machinery industry, chemicals and

allied products industry and centralized

waste treatment industry.

Thus, although CP is only used at

three percent of industrial laundry

facilities, EPA is well within its

authority to select it as BAT. BAT

means not that the technology be in

routine use, but rather that the

technology must be available at a cost

and at a time that the Administrator

determines to be reasonable, and that

the technology has been adequately

demonstrated if not routinely applied.

See American Frozen Food Institute v.

Train, 539 F.2d 107, 132 (D.C. Cir.

1976), citing ‘‘A Legislative History of

the Water Pollution Control Act

Amendments of 1972’’ (Comm. Print

1973), at 1469–1470. See also Kennecott

v. United States EPA, 780 F.2d 445, 448

(4th Cir. 1985). (The BAT standard

reflects the intention of Congress to use

the latest scientific research and

technology in setting effluent limits,

pushing industries toward the goal of

zero discharge as quickly as possible. In

setting BAT, EPA uses not the average

plant, but the optimally operating

plant—the pilot plant that acts as a

beacon to show what is possible.);

Association of Pacific Fisheries v. EPA,

615 F.2d 794, 816 (9th Cir. 1980) (BAT

can be based on statistics from a single

plant).

EPA has determined that the selected

option for the industrial laundries

category is economically achievable for

the following reasons. EPA estimates

that the proposed standards would

cause 33 industrial laundry facility

closures and a direct loss of 2,872 jobs

from facility closure (although longer

term, net direct losses are estimated to

total only 470 as the market

equilibrates). The number of

incremental closures (33) is about 1.9

percent of in-scope industrial laundry

facilities (1,747) and 2.1 percent of the

(1600) facilities in the facility level

analysis. The loss of jobs associated

with these closures is about two percent

(short-term) or 0.4 percent (longer term)

of the category employment. EPA’s

bankruptcy analysis shows that 65 firms

(of 681 total firms in the firm level

analysis, or 9.5 percent) move into the

bankruptcy likely category under the

proposed standards (i.e., they would

have trouble obtaining the financing

necessary to install the required

pollution control equipment). In all

cases, these are single-facility firms

where EPA’s closure analysis shows that

the facility would still be financially

viable (making money) after complying

with the rule if financing could be

obtained. In this industry in particular,

where demand is relatively inelastic and

facilities are geographically tied to their

service areas, production is not easily

shifted to another geographic area.

Therefore, EPA predicts that these

bankruptcies do not mean that the

facilities will close down, but rather that

they may be a target for acquisition by

another entity that has better access to

financing for pollution control

equipment and continue to operate with

all or nearly all employees. Based on

this analysis, EPA finds the standards to

be economically achievable as that term

is used in the CWA.

EPA has concluded that application of

the selected option is not economically

achievable for the smallest industrial

laundries that launder less than one

million pounds of incoming laundry per

calendar year and less than 255,000

pounds of shop and/or printer towels/

rags per calendar year. If EPA were to

require standards based on chemical

precipitation, the closure rate among

facilities with annual revenues less than

$1 million, would be 28.9 percent, as

compared to 4.4 percent for the category

as a whole without the size exclusion.

This economic impact is clearly

disproportionate and EPA is exercising

its discretion under sections 301 and

304 of the CWA to determine what is

economically achievable to establish

this exclusion.

Further, EPA believes that it is

appropriate to establish this exclusion

because it alleviates the harshest

economic impact, facility closure,

without excluding from the national

standards a significant pollutant load. A

chart illustrating what EPA found

follows:

TABLE VI.F.1.1—CLOSURES AND REMOVALS WITH AND WITHOUT EXCLUSION

Option

Closures Pollutant Removals (lb-eq) taking POTW removals into account

Without exclusion With exclusion Without exclusion With exclusion

CP–IL ................................................................................................................ 70 33 416,920 407,358

As the chart demonstrates, the

exclusion would alleviate closures for

the smallest facilities. EPA also notes

that the excluded facilities account for

less than three percent of the pollutant

removals from the waters of the U.S.

that would occur if the rule were

implemented without the exclusion.

Thus, the exclusion represents a

reasonable approach to addressing the

disproportionate adverse economic

impacts of the rule consistent with the

objectives and requirements of the

CWA.

The Agency also evaluated higher

thresholds reflecting up to 3 to 5 million

pounds of total production and from

255,000 to 500,000 pounds of shop and/

or printer towels. See Section X.A. for

more discussion of the SBREFA panel

findings. The Agency solicits comments

on these alternative exclusions as well

as the exclusion proposed today.

Finally, EPA has determined that the

selected option has acceptable nonwater quality environmental impacts

discussed further in section IX, below

and in chapter 14 of the Development

Document.

EPA evaluated the organics control

option as a low cost alternative,

however, this technology was not

effective in terms of pollutant removals

and was rejected.

EPA, based on the data gathered to

date, did not select DAF–IL because

EPA’s current data show that CP

technology achieves slightly higher

toxic pollutant removals. While, DAF is

currently more prevalent in the industry

than CP (EPA estimates that

approximately eight percent of the

industry are currently using DAF

compared to approximately four percent

using CP) EPA estimates that DAF is

more costly to operate than CP on an

annualized basis. DAF requires a

smaller initial capital investment and
66194 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

may be attractive to many facilities for

this reason, however, EPA estimates that

its lower capital costs are more than

offset by higher operating and

maintenance costs associated with the

need to chemically condition the

flotation residual sludges, making it

more expensive than CP overall.

The Combo-IL option would base the

standard for each parameter on the

lesser performance between DAF and

CP, and current data indicate that it

would remove slightly fewer pounds of

pollutants than if all facilities were

required to meet standards based on CP

only.

EPA also rejected the Combo-IL2Lim

option because current data indicate

that overall this option did not remove

as many pollutants as the CP option and

would cost more than the selected CP–

IL option. See Chapters 9 and 12 of the

Development Document. EPA solicits

additional information and data on the

costs and performance of both CP and

DAF technologies used to treat

wastewaters from laundering industrial

textile items. Although EPA rejected the

options based on DAF, the pollutant

removals were similar enough for

further consideration of the DAF and

Combo options. If additional data and

information provides support that DAF

is generally comparable to CP in

removing pollutants, EPA would

consider for the final rule basing

standards on either the less stringent of

CP or DAF standards or on DAF for

those facilities that already have it in

place and on CP for all other facilities.

If the standards for the final rule are

based on the Combo-IL2Lim option, the

standards based on DAF technology

would apply to those facilities with

DAF in place as of the publication date

of this proposal. Although EPA

estimates that CP is cheaper to operate

on an annualized basis than DAF (even

for facilities that already have DAF

installed), EPA’s costing analysis for the

Combo-IL and Combo-IL2Lim options

assumed that some facilities that already

have DAF installed would continue to

operate it if given the choice because of

constraints on financing. This is the

explanation for the results in Table

VI.E.1 that a less stringent regulatory

option would apparently have higher

compliance costs. EPA recognizes that

while its cost estimates are based on

simplifying assumptions that it believes

to be correct on average, actual costs

will vary from facility to facility, so that

DAF may in fact be the cheaper

technology for some facilities. This is

particularly likely for facilities that

already have DAF installed. In this case,

the Combo-IL and Combo-IL2Lim

options would be expected to entail

lower national compliance costs than

either the DAF–IL or the CP–IL options.

EPA is soliciting information that may

help it refine its estimates of the relative

costs on a facility-by-facility basis of

DAF and CP. Given that EPA’s estimates

that CP’s removals are only slightly

better than DAF, this could also be a

factor in determining whether CP only,

or both CP and DAF represent BAT and/

or BADCT in addition to the other

factors specified in Section III of this

preamble.

2. New Sources

After considering all of the technology

options described above, and in light of

the factors specified in sections 306 and

307 of the CWA, EPA has selected CP–

IL as the technology basis for the

pretreatment standards for new sources

in the proposed rule. As stated in

Section III.A. of the preamble, PSNS are

analogous to NSPS, which in turn are

based on best available demonstrated

control technology. New facilities have

the opportunity to install the most

efficient treatment technologies and

under NSPS, EPA is to consider

standards that will eliminate pollution

to the maximum extent feasible. These

PSNS are based on the performance of

CP at one or more facilities using CP

depending on the pollutant. Although

CP is currently only used at three

percent of industrial laundry facilities,

CP is a widely used technology in other

industries such as the metals products

and machinery, chemicals and allied

products, and centralized waste

treatment industries. See, e.g., American

Iron and Steel Institute v. EPA, 526 F.2d

1027, 1058 (3rd Cir. 1975) (By

demonstration, it will be sufficient that

there be one operating facility which

demonstrates that the level can be

achieved or that there is sufficient

information and data from a relevant

pilot plant or semi-work plant to

provide the needed economic and

technical justification for such new

source).

EPA has determined that the

proposed PSNS are economically

achievable and present no barrier to

entry. EPA has found that overall

impacts from the proposed IL standards

on new sources would not be any more

severe than those on existing sources,

since the costs faced by new sources

generally will be the same as or less

than those faced by existing sources. It

is typically easier to incorporate

pollution prevention technologies such

as those identified in the Development

Document in Chapter 8 & 10, and it is

less expensive to incorporate pollution

control equipment into the design at a

new plant than it is to retrofit the same

pollution control equipment in an

existing plant because no demolition is

required, and space constraints, which

can add to costs if specifically designed

equipment must be ordered, are not an

issue in new construction. Because most

new sources face either less or similar

costs than existing sources, EPA has

determined that PSNS requirements

should not pose a barrier to entry on the

basis of competitiveness for new

facilities based on available data. EPA

also has shown CP to be an

economically achievable option for

existing sources. Therefore, the same

requirements for PSNS also should have

an acceptable level of impact on new

facilities.

EPA also examined whether there

would be a barrier to entry for small

new sources. EPA’s analysis showed no

closures of new sources at single-facility

firms. See section VII.C.2.b of this

preamble or the EA for more details.

Thus, EPA proposes not to exclude

these new sources based on a finding

that it is economically achievable for

these new sources to comply with the

CP standards contained in the proposed

rule. EPA solicits comments on its

proposed finding that the proposed CP

option is economically achievable and

does not constitute a barrier to entry for

new small sources and on its proposal

not to include a small facility exclusion

for PSNS. See also section VII.B. below.

G. Determination of Long-Term

Averages (LTAs), Variability Factors,

and Limitations for PSES and PSNS

Although chemical precipitation (CP)

is widely used in other industries, CP

only exists at an estimated three percent

of industrial laundry facilities. EPA

based the proposed standards on

sampling data EPA gathered at one

industrial laundry facility using CP and

from data submitted by as many as four

CP facilities (depending on the

pollutant) in response to EPA’s detailed

monitoring questionnaire. Because

effluent from even the best performers

in an industry can reasonably be

expected to vary both above and below

the long-term average (LTA)

concentration for a given pollutant, even

when treatment systems are operating

optimally, EPA calculates limitations

and standards by multiplying LTAs by

variability factors to insure that

reasonable excursions from the LTAs do

not result in violation of the CWA.

The proposed limitations, as

presented in today’s notice, are

provided as daily maximums and

monthly averages for SGT–HEM and

daily maximums for all other regulated

pollutants. Monitoring was assumed to

occur four times per month for SGT–
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66195

HEM and one day per month for all

other pollutants. Monitoring

requirements are determined by the

pretreatment control authority, but EPA

has assumed a schedule that might be

appropriate. However, EPA notes the

high costs to facilities ($20,000–$23,000

annually) of monitoring at this

frequency and requests comment on

whether it should recommend a less

frequent schedule to pretreatment

control authorities.

The limitations for a pollutant are the

product of the pollutant long-term

average and the pollutant variability

factor. The procedures used to estimate

the pollutant LTAs and variability

factors are briefly described below. A

more detailed explanation is provided

in the Statistical Support Document.

The LTA of a pollutant for each

facility was calculated based on either

an arithmetic average or the expected

value of the distribution of the samples,

depending on the number of total

samples and the number of detected

samples for that pollutant at that

facility. The pollutant long-term average

for a treatment technology was the

median of the long-term averages from

the facilities using CP.

EPA calculated variability factors by

fitting a statistical distribution to the

data. The distribution was based on an

assumption that the furthest excursion

from the LTA that a well operated plant

using chemical precipitation could be

expected to make on a daily basis was

a point below which 99% of the data for

that facility falls, under the assumed

distribution. The daily variability factor

for each pollutant at each facility is the

ratio of the estimated 99th percentile of

the distribution of the daily pollutant

concentration values divided by the

expected value of the distribution of the

daily values. The pollutant variability

factor for a treatment technology was

the median of the pollutant variability

factors from the facilities with that

technology. The daily maximum

limitation is a product of the pollutant

long-term average and the pollutant

variability factor.

The monthly maximum limitation is

also calculated as the product of the

pollutant long-term average and the

pollutant variability factor, but the

pollutant variability factor is based on

the 95th percentile of the distribution of

daily pollutant concentrations.

By accounting for these reasonable

excursions above the LTA, EPA’s use of

variability factors results in standards

that are generally well above the actual

LTAs. Thus, if a facility operates its

treatment system to meet the relevant

LTA, EPA expects the plant to be able

to meet the standards. Variability factors

ensure that normal fluctuations in a

facility’s treatment are accounted for in

the limitations.

As stated above, EPA rejected an

option that would be based on one set

of standards for facilities with DAF

currently in place and another set of

standards based on CP for all other

facilities. Although EPA has rejected

this option for the reasons stated in

section VI.D above, EPA has also

provided standards based on sampling

data EPA gathered at two facilities using

DAF and from data submitted in

response to EPA’s detailed monitoring

questionnaire by as many as four

facilities (depending on the pollutant)

that were using DAF. These DAF

standards are shown for comparative

purposes below. EPA solicits comments

on both the proposed CP and DAF

standards and encourages commenters

to substantiate their comments by

submitting data.

TABLE VI.G.1—PRETREATMENT STANDARDS

Pollutant parameter

DAF CP

Daily Maximum(mg/L)Monthly Average (mg/L)Daily Maximum

(mg/L)

Monthly Average (mg/L)

Bis (2-Ethylhexyl) Phthalate ..................................................................... 0.44 .......................... 0.13 ..........................

Ethylbenzene ............................................................................................ 0.73 .......................... 1.64 ..........................

Naphthalene ............................................................................................. 0.24 .......................... 0.23 ..........................

Tetrachloroethene ..................................................................................... 1.35 .......................... 1.71 ..........................

Toluene ..................................................................................................... 5.63 .......................... 2.76 ..........................

m-Xylene ................................................................................................... 2.11 .......................... 1.33 ..........................

o&p-Xylene ............................................................................................... 0.98 .......................... 0.95 ..........................

Copper ...................................................................................................... 1.83 .......................... 0.24 ..........................

Lead .......................................................................................................... 0.52 .......................... 0.27 ..........................

Zinc ........................................................................................................... 3.47 .......................... 0.61 ..........................

TPH (as measured by SGT–HEM) .......................................................... 42.9 21.3 27.5 15.4

EPA is proposing concentration-based

limits. An alternative is mass-based

limits calculated by multiplying the

concentrations in the table above by the

75th percentile production normalized

flow of 3.13 gallons per pound

laundered. However, EPA found no

relationship between gallons per pound

laundered and items washed, total

production or the amount of recycle/

reuse. Because of this, even if operators

were employing the appropriate level of

control, it would be difficult to develop

achievable mass limits.

Some stakeholders have advocated

mass-based standards while others

prefer concentration-based standards.

POTWs generally prefer concentrationbased standards because it is much

easier for them to implement. Massbased standards require information

about flow and/or production both to set

the standards and to enforce them, but

have the added advantage of

encouraging flow reduction. EPA

solicits comments on this issue.

VII. Economic Analysis

A. Introduction

This section describes the capital

investment and annualized costs of

compliance with the proposed

industrial laundries pretreatment

standards and the potential impacts of

these compliance costs on current and

future facilities and firms in the

industrial laundries industry. EPA’s

economic assessment is presented in

detail in the Economic Assessment (EA)

included in the rulemaking record. The

EA estimates the economic effect of

compliance costs on facilities, firms,

employment, domestic and

international markets, inflation,

distribution, environmental justice and

industrial laundries customers. EPA

also has conducted an Initial Regulatory

Flexibility Analysis (IRFA) under the

Regulatory Flexibility Act (RFA) as

amended by the Small Business

Regulatory Enforcement Fairness Act (),
66196 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

which estimates effects on small

entities, and a cost-effectiveness

analysis of all evaluated options. Except

where otherwise noted, only the results

for the option used as the basis for the

proposed rule are presented here.

Impacts for other options are presented

in Section C.3 below and in the EA.

B. Economic Impact Methodology

1. Introduction

This section (and, in more detail, the

EA and record for the proposed rule)

evaluates several measures of economic

impacts that result from compliance

costs. The analysis in the EA consists of

eight major components: (1) an

assessment of the number of facilities

that could be affected by this rule; (2) an

estimate of the annual aggregate cost for

these facilities to comply with the rule

using facility-level capital and operating

and maintenance (O&M) costs; (3) an

evaluation, using a financial model, of

compliance cost impacts on facilities’

cash flow (closure analysis); (4) an

evaluation, using a financial model, of

compliance cost impacts on the

financial health of firms in the industry

(firm failure analysis); (5) an evaluation

of secondary impacts such as those on

employment, markets, inflation,

distribution, environmental justice and

industrial laundry customers; (6) an

assessment of the potential for impact

on new sources (barrier to entry); (7) an

analysis of the effects of compliance

costs on small entities pursuant to the

RFA as amended by; and (8) a costbenefit analysis pursuant to E.O. 12866.

All costs are reported in this preamble

in 1997 dollars, with the exception of

cost-effectiveness results, which, by

convention, are reported in 1981

dollars. The EA report presents all costs

in 1993 dollars. In the EA, any costs not

originally in the base year (1993) dollars

have been inflated or deflated to 1993

dollars using the Engineering News

Record Construction Cost Index, unless

otherwise noted in that report (see the

EA for details). This same cost index is

used to further inflate costs to 1997

dollars for this preamble. Generally,

other indices are used to inflate benefits

to 1997 dollars, as cited in the EA. The

primary source of data for the economic

analysis is the 1994 Industrial Laundries

Industry Detailed Questionnaire

(Section 308 Survey). Other sources

include government data from the

Bureau of the Census, industry trade

journals, and several preliminary

surveys of the industry, including the

1989 Preliminary Data Summary for

Industrial Laundries, the 1993 Industrial

Laundries Industry Screener

Questionnaire, the 1994 Industrial

Laundries Supplemental Screener

Questionnaire, and EPA’s Development

Document for this rulemaking.

2. Methodology Overview

Central to the EA is the cost

annualization model, which uses

facility-specific cost data and other

inputs (discussed in Chapter 12 of the

Development Document) to determine

the annualized capital and operating

and maintenance (O&M) costs of

improved wastewater treatment. This

model uses these costs along with an

annual compliance monitoring cost with

the industry-specific real cost of capital

(discount rate) over a 16-year analytic

time frame to generate the annual cost

of compliance for the selected option, as

well as the other options considered

during the course of the proposal effort.

EPA chose the 16-year time frame for

analysis based on the depreciable life

for equipment of this type, 15 years

according to Internal Revenue Service

(IRS) rules, plus approximately one year

for purchasing and installing the

equipment. As an alternative to

installing wastewater treatment,

facilities may choose, within many of

the technology options considered, to

have wastewater hauled offsite (a

decision handled within the model, as

discussed below). The model generates

the annualized cost for each option

(including the annual cost of hauling

wastewater) for each facility in the

survey, which is then used in the

facility and firm analyses, discussed

below.

In the facility analysis, EPA models

the economic impacts of regulatory

costs on individual industrial laundry

facilities, irrespective of ownership. In

this part of the analysis, the model uses

the annualized costs of each option,

compares them to the alternative annual

wastewater hauling costs (where this

alternative is available), and selects the

lowest of the two.

EPA then reduces this resulting cost

to take into account that portion of

compliance costs that can be passed

through to customers. Compliance costs

are adjusted downward by a factor (the

cost pass-through factor) that is

calculated using EPA’s model of the

industrial laundries market. This model,

which quantifies the price and quantity

changes in the industrial laundries

market due to the proposed rule, shows

that the industry will be able to pass

some portion of the compliance costs of

the proposed rule through to their

customers and calculates the percentage

that can be passed through. The market

model is a simultaneous equation for

determining price and quantity using

supply and demand curves for the

industry that EPA developed based on

data in the Section 308 Survey and U.S.

Census Bureau economic data. EPA

estimates, for this industry, that 32

percent of compliance costs can be

passed through to customers. Although

EPA believes that its cost pass-through

projection is reasonable, an analysis in

the EA shows that a zero-cost pass

through assumption produces nearly

identical closure analysis results.

EPA then converts the adjusted

annual cost for each facility into a

present value change in cash flow,

which is subtracted from the estimated

baseline present value of facility cash

flow. Estimated baseline present value

of facility cash flow is based on the

average of three years of financial data

from each facility in the Section 308

survey under an assumed no-growth

scenario (i.e., the annual cash flow,

calculated as the 3-year average, is

expected to remain the same over the

16-year period of analysis). If the change

in present value of cash flow (which is

derived from the adjusted annualized

costs of compliance) causes a facility’s

estimated cash flow to change from

positive in the baseline to zero or

negative after implementing the

requirements of the proposed rule over

the 16-year period of analysis, EPA

considers the facility likely to close (i.e.,

liquidate) as a result of the regulation.

This approach is somewhat different

from methodologies used in other EAs

and economic impact analysis for

manufacturing industries, since salvage

value is not considered in the closure

analysis here. For a number of reasons,

outlined in the EA (see Section 5 and

Appendix C), EPA found that using

salvage value in a closure analysis for

this industry is not the best way for

determining whether a facility would be

liquidated. EPA found that baseline

closures calculated using salvage value

accounted for a large percentage (nearly

30 percent) of existing facilities.

Furthermore, EPA found that many of

these closures using salvage value were

driven by current assets. EPA believes

that firms would not be likely to

liquidate on the basis of high current

assets (cash on hand) relative to cash

flow. EPA also believes that costs of

liquidation could easily equal or exceed

salvage value in low-asset service

industries such as this one, unlike in the

more highly capital-intensive

manufacturing industries.

Note that facilities that reported

negative cash flow over the 3-year

period of the survey are considered

baseline closures and are not considered

affected by the rule for several reasons:

(1) Many of these facilities (50 nonexcluded facilities) are nonindependent
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66197

facilities owned by multifacility firms.

These facilities may be transferring

production (laundering services at or

near cost) from other facilities owned by

the same parent company, or otherwise

not expected to be self-supporting by

the parent. EPA analyzes the parent

firms of these facilities in the firm-level

analysis and as long as the parent firm

can afford to install and operate

compliance equipment in these

facilities, EPA assumes these facilities

will close neither in the baseline nor

postcompliance. (2) OMB guidance

suggests that agencies develop a

baseline that is ‘‘the best assessment of

the way the world would look absent

from the proposed regulation. That

assessment may consider a wide range

of factors, including the likely evolution

of the market * * *’’ EPA’s best

assessment is that some facilities

currently operating may not remain in

business to install and operate the

pollution control equipment. EPA

cannot say for certain which facilities

these may be, but can assert that those

facilities that are currently considered

not financially viable because their cash

flow is zero or negative (among those

not owned by multifacility firms—57

non-excluded facilities) are the likeliest

facilities to close without ever installing

and operating pollution control

equipment. It is possible that a facility

estimated to be a baseline closure may

remain open, but the converse is also

true—a facility projected to remain open

until it is subject to the rule may

actually close independently of the

effects of the rule (both results might be

equally possible). Thus, consistent with

OMB guidance, EPA estimated

postcompliance closures by counting

closures that are projected to close

solely due to the effect of the proposed

rule.

In the firm failure analysis, EPA uses

the adjusted annualized costs to

compute a change in earnings, assets,

liabilities, and working capital at the

firm level (accounting for costs for

multiple facilities, where applicable).

These postcompliance financial figures

are used in a computerized model of

financial health on a firm-by-firm basis.

The model uses an equation known as

‘‘Altman’s Z’’, which was developed

based on empirical data to characterize

the financial health of firms. This

equation calculates one number, based

on the financial data, that can be

compared to index numbers that define

‘‘good’’ financial health,

‘‘indeterminate’’ financial health, and

‘‘poor’’ financial health. All firms whose

‘‘Altman’s Z’’ number changes such that

the firm goes from a ‘‘good’’ or

‘‘indeterminate’’ baseline category to a

‘‘poor’’ postcompliance category are

classified as likely to have significant

difficulties raising the capital needed to

comply with the proposed rule, which

can indicate the likelihood of firm

bankruptcy, or loss of financial

independence.

As the panel noted, there is

uncertainty associated with both the

methodology for predicting facility and

firm closures, and the figures used to

make those projections, such as interest

rate, assumption of the life of the

pollution control equipment and

compliance costs. One of the small

entity representatives consulted during

the outreach process specifically

questioned several of EPA’s costing

assumptions, relating to interest rate,

use life of equipment, and labor

requirements to operate a treatment

system. EPA recognizes the

uncertainties associated with its

analyses, and has performed sensitivity

analyses in the EA that addresses some

of these issues. EPA believes that its

choice of methodology and input data is

appropriate and results in a

conservative calculation of costs and

facility and firm closures, but solicits

comments and data that would support

more refined analyses for the final rule.

EPA also notes that a methodological

concern has been raised regarding its

facility closure analysis that relates to

its use of cash flow as the appropriate

measure of funds available to cover the

compliance costs of the proposed rule.

Cash flow is defined as income plus

depreciation. It has been suggested that

calculating a facility’s costs without

including depreciation fails to account

for the future cost of replacing existing

capital as it wears out, and thus

underestimates long-term costs and

overstates funds available for

compliance. EPA, however, believes it is

appropriate to include depreciation in

the funds available for compliance

because, while under standard

accounting practices depreciation is

deducted from gross revenue during the

calculation of income, it does not

represent an expenditure actually

incurred in the current period but rather

an amortization of costs incurred in a

previous period. EPA requests

comments on its use of cash flow as an

appropriate measure of funds available

for compliance.

In the employment analysis, EPA

undertakes several types of analyses, all

based in part on a type of analysis

known as input-output analysis. These

employment analyses include: (1) a

national-level analysis for estimating

employment gains and losses

throughout the U.S. economy in all

industry sectors using both compliance

costs and employment losses driven by

facility closures to determine a range of

possible gross and net (losses minus

gains) impacts at the national level; (2)

a regional impact analysis using

employment losses driven by facility

closures (closure losses) to determine

whether impacts on individual

communities might be experienced; and

(3) an analysis using EPA’s estimate of

market-determined production losses to

derive an estimate of direct, net

employment losses in the industrial

laundries industry alone. This last

analysis is undertaken to determine

losses within the industrial laundries

industry alone because while closure

losses can be considered the immediate

impact of the proposed rule on the

industry, production-driven losses

might be greater or less than closure

losses over time, as equilibrium in the

market is attained. Furthermore, closure

losses do not account for the fact that

some portion of production workers

might transfer wholly or in part to

operating pollution control equipment,

thus some accounting for employment

gains within the industry is necessary.

National-level analysis. EPA uses

input-output analyses to determine the

effects of the regulation using nationallevel employment and output

multipliers. Input-output multipliers

allow EPA to estimate the effect of a loss

in output in the industrial laundries

industry on the U.S. economy as a

whole. Every loss in output in the

industrial laundries industry results in

employment losses in that industry.

Additionally, these losses have

repercussions throughout the rest of the

economy, and the output and

employment multipliers allow EPA to

calculate the total losses in output and

employment nationally using the output

loss estimated for the industrial

laundries industry alone. See Section

Seven of the EA for more details.

Regional-level analysis. EPA also

determines the impacts on regionallevel employment, which is estimated

using facility closures and employment

at those closing facilities. These

analyses are based on the use of Bureau

of Economic Analysis RIMS II inputoutput regional (not national-level)

multipliers, which allow EPA to

determine employment impacts on

other sectors of the regionally economy

that depend on the industrial laundries

industry. EPA uses the regional-loss

estimates using the facility closuredriven estimates of employment losses

to perform a community impact

analysis, which investigates the

potential for impacts on community

unemployment rates based on the
66198 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

immediate dislocation effects of facility

closures. Firm failures are not

considered in the job loss or community

impact analyses because in all cases,

these firms are single-facility firms

whose facility is shown to be financially

viable after complying with the rule.

The impact of the proposed rule on

these facilities thus might be the loss of

their financial independence, as they

would likely be purchased by a larger

firm and continue to operate with all or

nearly all employees. This is not always

the case in all industries, but in this

industry, facilities are geographically

tied to their service areas and thus their

production is not easily shifted to

another geographic area. Furthermore,

they are generally not asset-rich and are

thus not suitable for acquisition for the

purpose of selling off assets rather than

for operation.

EPA conducts a regional analysis

because even if net employment effects

(losses minus gains) are relatively small

on a national level, an employment loss

might still have a substantial negative

effect on an individual community (see

the EA for more details).

Industry level analysis. Facility

closure losses could overstate or

understate employment losses strictly

within the industrial laundries industry

on a longer-term basis, since total

longer-term employment losses are

driven by production losses and

employment losses from closures are

driven by costs of compliance, and these

two losses may not be equal. Therefore,

EPA uses its market model to predict

any reductions in production and the

subsequent employment effects

(production-driven effects) within the

industrial laundries industry alone. This

analysis also accounts for some gains

within the industrial laundries industry

due to a need for operators of pollution

control equipment. This analysis also

uses the national-level input-output

multipliers to compute a direct loss of

employment on the basis of output

effects. EPA considers this employment

loss the longer-term impact of the rule

on the industrial laundries industry.

EPA investigates additional secondary

impacts qualitatively and quantitatively.

These impacts include impacts on

domestic and international markets,

impacts on substitutes for industrial

laundry services, impacts on inflation,

distributional impacts, and impacts on

environmental justice. EPA also

investigates the impact of the rule on

domestic markets. The rule will affect

domestic markets to the extent that

excluded facilities can affect market

share. EPA makes an assessment of the

potential for effect on domestic market

on the basis of pounds of laundry

processed by excluded facilities to the

total pounds processed by the industry.

EPA also looks at impacts on

customers. The agency obtained IRS

data on the major customer groups and

summed total operating costs for their

major customers. Under the worst-case

assumption that all compliance costs

would be borne by only 10 percent of

these major customers, EPA

conservatively determined a percentage

by which total operating costs might

increase due to the proposed rule.

Additionally, EPA investigates the

potential for any impacts on hotels,

hospitals, prisons and other such

establishments should they be accepting

industrial items from off-site sources.

Another key analysis EPA performs is

an analysis to determine impacts on

new sources, which is primarily a

‘‘barriers-to-entry analysis’’ to determine

whether the costs of the PSES would

prevent a new source from entering the

market. This analysis looks at whether

new industrial laundries would be at a

competitive disadvantage compared

with existing sources. Market effects

and barriers to entry associated with the

small source exclusion also are

qualitatively investigated.

Also, pursuant to E.O. 12866, EPA

performs a cost-benefit analysis. This

analysis looks at the social cost of the

regulation measured as the pretax costs

of compliance plus government

administrative costs plus the costs of

administering unemployment benefits.

See Section IX of this preamble for more

details of the benefits analysis.

C. Summary of Costs and Economic

Impacts

1. Overview of the Economic

Assessment Analyses

The EA focuses first on the costs and

economic impacts of the proposed rule,

using the best data and information

available—that reported by industry in

the Section 308 Survey data—as

representative of the regulatory baseline.

The analysis addresses costs and

economic impacts of the pretreatment

(PSES and PSNS) requirements for

industrial laundries wastewater. As

noted earlier, EPA has elected to reserve

Best Practicable Control Technology

Currently Available (BPT), Best

Conventional Pollutant Control

Technology (BCT), BAT, and NSPS

requirements. Direct discharger

requirements will be determined on a

case-by-case basis under CWA section

402(a)(1).

2. Total Costs and Impacts of the

Proposed Rule

This section presents the total costs

and impacts of the standards in this

proposed rule. EPA estimates that there

are 1,747 industrial laundries facilities

(given the items processed, the

definition of an industrial laundry item

in the proposed rule, and Section 308

Survey statistical weights). Of these, 141

facilities meet the definition of ‘‘small’’

under EPA’s proposed designation of

the small industrial laundries exclusion.

This exclusion is defined as all facilities

laundering less than one million pounds

of incoming laundry per calendar year

and less than 255,000 pounds of shop

and/or printer towels/rags per calendar

year. Of these excluded facilities, all

meet the definition of ‘‘small’’ under

Small Business Administration (SBA)

Guidelines. There are 903 firms owning

the 1,747 facilities. A total of 837 out of

the 903 firms or 93 percent are ‘‘small

businesses’’ according to SBA

Guidelines (revenues less than $10.5

million per year). The analysis looks

separately at single-facility firms (those

firms where the firm and the facility are

a single entity) and multifacility firms

(firms that own more than one facility;

generally, these firms are larger than

single facility firms). There are a total of

830 single-facility firms out of 903 total

firms in the industry (92 percent), the

vast majority of which meet the SBA

definition of small.

The total cost of the proposed rule is

based on engineering cost estimates. To

develop these estimates, EPA identified

candidate end-of-pipe treatment

technologies and grouped appropriate

technologies into regulatory options.

EPA then developed cost equations for

capital and O&M costs for each of the

technologies.

For each wastewater treatment

technology, EPA developed a cost

module. The following cost modules

make up the selected CP option: screen,

stream splitting, equalization, chemical

precipitation, pH adjustment, sludge

dewatering, building and monitoring.

For further detail, see Chapter 12 of the

Development Document.

Total costs of the proposed regulation

are estimated to be $93.9 million (see

Table VII.C.2.1).

TABLE VII.C.2.1.—COSTS OF

PROPOSED PSES OPTION ($1997)

Option

Posttax Annual Costs

($ million)

PSES: CP–IL ............................ $93.9
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66199

a. Impacts From Pretreatment Standards

for Existing Sources (PSES)

EPA estimates that the proposed rule

would result in 33 facilities (2.1 percent

of all facilities in the facility-level

analysis and 1.9 percent of all in-scope

facilities) closing as a result of

compliance costs. All are single-facility

firms. EPA estimates total direct job loss

of 2,872 full-time equivalents (1 FTE =

2,080 hours of labor) as a result of the

facility closures projected under the

proposed rule. The employment losses

associated with closures overstate actual

net losses to the industry, because some

employment gains in the industry will

occur (although the gains may not occur

in the same geographic location or at the

same time as the losses). These gains

include operators of pollution control

systems that might be hired by facilities

and additional workers hired to expand

some production at facilities located in

market areas with facility closures (lost

production from closures is estimated to

exceed the amount of reductions

required to meet market equilibrium

conditions). EPA estimates the actual

net direct losses in the industrial

laundries industry would be 470 FTEs

(0.36 percent of total industry

employment), considerably less than the

number of direct losses predicted solely

on the basis of closures.

Additional to these closures, EPA

predicts that the proposed regulatory

option would affect the ability of 65

firms (all of which are single-facility

firms) to raise the capital needed to

purchase and install the pollution

control equipment. This impact may

result in the loss of financial freedom

for these firms, up to and including the

sale of the firms to larger multifacility

firms. This impact does not mean that

these firms will close; all these firms are

viable at the facility level and are thus

considered likely to be of interest to

other firms for acquisition and

operation.

EPA predicts employment impacts to

the national-level economy on the basis

of input-output analysis described

above. Based on this analysis, which

estimates both national employment

losses stemming from increased output

in the industrial laundries industry and

offsetting gains stemming from

increased output of pollution control

equipment, the proposed option would

result in a net loss of employment at the

national level in all industry sectors of

582 to 5,534 FTEs, which is about

0.0005 to 0.005 percent of the U.S. labor

force in 1997. Net output loss would be

thus $100.7 million at most, which is

about 0.001 percent of Gross Domestic

Product in 1997. Thus EPA expects, at

the national level, that the IL Standards

would have negligible impact on U.S.

employment and output.

EPA also investigated employment

impacts in the industrial laundries

industry alone. EPA determined that

within the industrial laundries industry,

many nonclosing facilities might

actually experience gains in production

(and thus gains in output and

employment). This is because when

facilities close, other nonclosing

facilities in the local market area might

expand production to take over a

portion of the closing facility’s

production. Thus, while the proposed

rule is estimated to produce a long-term

net employment loss to the industrial

laundries industry of 470 FTEs, this is

less than the short-term direct

employment and output losses that

would be calculated on the basis of

closures alone.

For the community-level analysis,

under the conservative approach for

estimating community employment

impacts described above, EPA

determined that most closures will

result in a maximum change in a

community’s unemployment rate of 0.32

percent or less and EPA estimates no

single community will sustain impact

on its unemployment rate of greater

than one percent.

EPA expects the proposed rule to

have a minimal impact on international

markets. Domestic markets might

initially be slightly affected by the

exclusion for very small facilities, since

these facilities may not be subject to the

same requirements; however, the

number of these facilities, the small

volume of their production relative to

total industry production (0.7 percent),

and the likelihood that they are not

concentrated in any one market area, are

expected to limit the effects of any

competitive advantages they may have.

EPA’s economic analysis shows that

there is a very slight increase in price

($0.003 per pound) and that customers

are not very sensitive to price changes;

therefore, dischargers subject to the

proposed rule would be able to compete

with those dischargers excluded from

the proposed rule. Further, if any

excluded facility annually launders

more than one million pounds of

laundry or more than 255,000 pounds of

shop and/or printer towels/rags per

calendar year, it will no longer be

excluded from the standards. The small

excluded facilities are also the most

likely of any size group to exit the

market regardless of the rule. Given

these observations, it is likely that this

group of existing sources would shrink

in size over time, and any small market

effects would be reduced. As discussed

below in the Regulatory Flexibility

Analysis section, EPA believes that the

small impacts of the exclusion on

markets are far outweighed by the

benefits of reducing adverse economic

impacts on the most vulnerable firms in

the industry.

EPA also expects the proposed rule to

have minimal impacts on inflation,

insignificant distributional effects, and

no major impacts on environmental

justice. The rule also would have

minimal impacts on industrial laundries

customers. The price increase expected

as a result of the proposed option is an

average of $0.003 per pound, or 0.4

percent of current average price.

Because this percentage increase is so

small compared to even the modest

rates of inflation currently experienced,

it is unlikely that most customers would

be able to distinguish this effect from

the effect of inflation. If EPA assumes

that only 10 percent of the customers in

the major groups of customers absorb

100 percent of the cost of the rule, total

compliance costs would increase

customers’ operating costs by an average

of less than 0.02 percent. Therefore,

EPA does not expect price increases to

have a major impact on customers.

EPA also investigated the likelihood

that customers might substitute

disposable items for laundered items or

begin operating on-site laundries. Both

the substitution of disposable items for

laundered items and the installation and

operation of on-site laundries are

associated with potential negative

impacts on customers that might deter

them from choosing these potential

substitutes. Disposable items can be

more expensive to use than laundered

items, may not meet quality

requirements (e.g., disposable printer

towels tend to be linty) and are, in

certain circumstances, regulated under

other environmental statutes.

Meanwhile because of the high initial

costs to install equipment on-site and

the small increase in price of industrial

laundry services discussed earlier, onsite laundries could require years before

any cost savings might be realized. Also,

EPA’s market model provides a means

for estimating price increase and

reduction in quantity demanded for

industrial laundering services at the

higher price. This analysis shows a very

small decrease in production as a result

the proposed rule, 0.3 percent of

baseline production. Given the

disincentives towards those substitutes

indicated above, EPA does not expect

the proposed rule to cause customers to

substitute disposable items for

laundered items or commence industrial

laundering on-site for industrial

laundries services in any major way.
66200 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

The small reduction in production of

0.3 percent is more likely to occur from

customers delaying cleaning (rather

than weekly pickups of mats, for

example, some might substitute

biweekly pickups) or dropping certain

rental items, such as uniforms used only

for image purposes. This decline in

production is negligible compared to the

approximate 4 percent per year growth

in revenues seen for the industry

between 1990 and 1993, according to

Section 308 data.

EPA also determined that impacts on

hotels, hospitals, and prisons, which

could be processing industrial laundry

from offsite sources are likely to be

negligible. First, EPA’s survey of a

subset of hotels, hospitals, and prisons

turned up no facilities that were

currently accepting industrial items

from offsite sources. Second, EPA’s

survey shows that some of these sources

could meet the definition of the small

industrial laundry exclusion. Several

process considerably less than 1 million

pounds of laundry per year, thus it is

possible that if any of these types of

establishments do accept industrial

items from offsite sources, some might

be excluded from coverage on the basis

of pounds laundered. Finally, if there

were facilities large enough not to

qualify for an exclusion, their major

source of revenues are from their

primary business, not from operating a

laundry. Therefore, EPA expects that

these facilities can afford to comply

with the proposed limitations by offsite

shipping of industrial laundry

wastewater. Because EPA’s data on

these types of establishments is not

exhaustive, however, the Agency

solicits comment and additional data on

this issue.

b. Impacts From Pretreatment Standards

for New Sources (PSNS)

EPA investigated all options

considered under PSES as potential

PSNS options. EPA has tentatively

selected the CP–IL option for both sets

of proposed standards. This section

presents EPA’s assessment of impacts

on new sources. EPA assesses impacts

on new sources by determining whether

the proposed rule would result in a

barrier to entry into the market.

EPA has found that overall impacts

from the proposed IL Standards on new

sources would not be any more severe

than those on existing sources, since the

costs faced by new sources generally

will be the same as or less than those

faced by existing sources. It is typically

less expensive to incorporate pollution

control equipment into the design at a

new plant than it is to retrofit the same

pollution control equipment in an

existing plant because no demolition is

required, and space constraints, which

can add to costs if specifically designed

equipment must be ordered, are not an

issue in new construction. Because most

new sources and existing sources face

similar costs, EPA has determined that

PSNS requirements should not pose a

barrier to entry on the basis of

competitiveness for most new facilities.

EPA also has shown CP–IL to be an

economically achievable option, having

an acceptable level of impact on existing

sources. Therefore, the same

requirements for PSNS also should have

an acceptable level of impact on most

new facilities.

EPA also examined whether there

would be a barrier to entry for small

new sources. EPA proposes not to

exclude these new sources because it

has found it to be economically

achievable for these new sources to

comply with the CP–IL standards

contained in the proposed rule. Based

on the Section 308 Survey data, EPA

expects that new sources generally

exceed the threshold size cutoff that

EPA proposed for existing sources. EPA

investigated facilities in the Section 308

Survey that indicated they were new or

relatively new at the time of the survey.

The number of new source facilities

coming on line each year is extremely

small. Over a three year period (1991,

1992, and 1993), according to Section

308 Survey data, laundry operations

began only at about 80 facilities (and it

is not absolutely clear from the data

whether these facilities were actually

new dischargers or were existing

dischargers acquired in that year by a

different firm). Over the 3-year period,

this amounts to 27 new sources a year

at most, or only 1.5 percent of existing

facilities. Given the small level of

growth in the industrial laundries

industry, EPA believes that new sources

are primarily replacing production from

closing facilities that exit the market.

Of these facilities identified as new or

relatively new facilities, EPA

determined that the average revenues of

this group exceeded $4 million per year,

and the amount of laundry processed

averaged over 5 million pounds per

year. Only 24 facilities out of 80 total

newer facilities (weighted), or 30

percent, would meet the size threshold

for the exclusion applicable to existing

sources. On a yearly basis (given that 24

facilities started up over the 3 years of

the survey) EPA estimates that up to 8

facilities of the size that would meet an

exclusion similar to that for existing

sources might be started up each year.

Overall, in the group of 80 facilities,

only 6 facilities (weighted) were

identified as postcompliance closures

(based on a closure by one surveyed

nonindependent facility). No singlefacility firm would close

postcompliance. EPA is less concerned

about a closure of a nonindependent

facility, since nonindependent facilities

often can fall back on their parent firm

during the financially shaky first few

start up years. Furthermore, these 6

facilities are represented by a survey

facility that might, on the basis of the

types of laundry processed, be able to

meet the requirements of the rule

possibly without having to install any

pollution control whatsoever (that is,

their current effluent might not exceed

the CP–IL based standards). EPA has

conservatively assigned this facility

compliance costs because the Agency

has no sampling data from this facility

to support this assertion. Given the

above results, EPA finds that not

excluding new sources laundering less

than one million pounds of incoming

laundry per calendar year and less than

255,000 pounds of shop and/or printer

towels/rags per calendar year from

PSNS will be economically achievable

and will present no barriers to entry.

EPA also investigated whether there

might be a barrier to entry due to

competitive disadvantages for all new

sources in markets where excluded

facilities are located. According to the

Section 308 Survey, excluded facilities

process only 0.7 percent of the laundry

processed by all facilities represented in

the survey. EPA thus concludes that the

market share of excluded facilities is so

small that excluded facilities are

unlikely to have a measurable impact in

the market for industrial laundry

services. Furthermore, EPA has shown

that even if no compliance costs are

passed through to customers, the

impacts are similar to the results

assuming cost pass-through does occur,

and thus new sources should be able to

compete with excluded facilities on

price (by not raising prices) even if they

perceive the need. EPA thus concludes

that competition with excluded

facilities will not pose a barrier to entry.

3. Economic Impacts of Rejected

Options

The economic impacts from rejected

options are as follows.

The OC option is associated with the

lowest level of economic impacts of all

options considered. This option is

associated with 3 facility closures, and

only 22 firms are projected to be likely

to fail (but not close) and are thus likely

to lose their financial independence. A

net direct total of 275 FTEs would be

lost in the industrial laundries industry

(direct, production-driven losses) had

EPA chosen this option, and other
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66201

secondary impacts (effects on trade,

inflation, and customers) would be

negligible. The option basing limits on

the lesser performance between DAF–IL

and CP–IL is associated with nearly

identical impacts as EPA’s preferred

CP–IL option. Facility closures are

estimated to be 33, and 65 firms are

estimated to be likely to fail (but not

close) and thus are likely to lose their

financial independence. A net total of

456 FTEs would be lost in the industrial

laundries industry (direct, productiondriven losses), and, as for the CP–IL

option, this option would most likely

have minimal additional secondary

impacts.

EPA investigated a variant to the

Combo option based on both CP–IL and

DAF–IL. In this option, rather than

setting limits based on the lesser

performance, EPA would set limits

based on DAF limits for all those

currently operating DAF systems, with

CP limits for all others. Costs would be

very slightly less than the other CP/DAF

option, with impacts being

approximately the same (in no case

would costs or impacts be less than CP–

IL).

Under the DAF–IL option facility

closures are estimated to total 34. A

total of 66 firms are expected to be

likely to fail (but not close) and are thus

likely to lose their financial

independence. A net 421 FTEs would be

lost in the industrial laundries industry

(direct, production-driven losses), if

EPA had chosen this option. Other

secondary impacts would be greater

than those for the proposed option, but

still minimal. Table VII.C.3.1 compares

the economic impacts of the rejected

option with those of the preferred

option.

TABLE VII.C.3.1.—IMPACTS OF THE PREFERRED OPTION VS. REJECTED OPTIONS

Option

Annualized

posttax costs ($

MM 1997)

Facility closures Firm failures

Net direct employment

losses (FTEs)

as a result of

production

losses

OC .......................................................................................................................... $46.0 3 22 275

CP–IL ...................................................................................................................... 93.9 33 65 470

Combo-IL2Lim* ....................................................................................................... ≈99 33 65 ≈450

Combo-IL ................................................................................................................ 99.5 33 65 456

DAF–IL .................................................................................................................... 118.6 34 66 421

*DAF–IL limits for existing DAF systems; CP–IL limits for all others.

D. Cost-Benefit Analysis

The proposed option is expected to

have a total annual social cost of $139.4

million ($1997), which includes $136.4

million in pretax compliance costs, $2.9

million in administrative costs, and $0.1

million in unemployment benefits

administration costs. Annual monetized

benefits are expected to range from $2.9

million to $10.6 million, which includes

$0.09 million to $0.5 million for human

health benefits, $1.9 million to $6.7

million for recreational benefits, $0.9

million to $3.4 million from nonuse

benefits, and $0.006 million to $0.01

million for POTW sewage sludge

benefits. Table VII.D.1 summarizes the

results of the cost-benefit analysis.

TABLE VII.D.1.—RESULTS OF THE

COST-BENEFIT ANALYSIS

Category Dollar value

(millions $1997)

Costs:

Pretax Costs of Compliance ...................... $136.4

Administrative Costs of

Permitting ................. 2.9

Administrative Costs of

Unemployment Benefits ........................... 0.1

Total Social Costs 139.4

Monetized Benefits:

Human Health Benefits $0.09–0.5

Recreational Benefits .. 1.9–6.7

TABLE VII.D.1.—RESULTS OF THE

COST-BENEFIT ANALYSIS—Continued

Category Dollar value

(millions $1997)

Nonuse Benefits .......... 0.9–3.4

Benefits to POTWs ...... 0.006–0.01

Total Monetized

Benefits ............. 2.9–10.6

There are a number of additional

benefits associated with the proposed IL

Standards that could not be monetized.

Examples include: reduced noncancer

health effects, reduced POTW operating

and maintenance costs, reduced

administrative costs at the local level to

develop and defend individually

derived local limits for industrial

laundries, improved aesthetic quality of

near discharge outfalls, enhanced waterdependent recreation other than fishing,

benefits to wildlife and to threatened or

endangered species, tourism benefits,

and biodiversity benefits.

E. Cost-Effectiveness Analysis

In addition to the foregoing analyses,

EPA has conducted cost-effectiveness

analyses for all options it considered.

Results of these analyses are presented

in the Cost-Effectiveness Analysis (C–E),

which is included in the rulemaking

record. C–E analysis evaluates the

relative efficiency of options in

removing toxic and nonconventional

pollutants. Costs evaluated include the

pretax direct compliance costs, such as

capital expenditures and O&M costs,

including compliance monitoring.

Cost-effectiveness results are

expressed in terms of the incremental

and average costs per ‘‘pound

equivalent’’ (PE) removed. PE is a

measure that addresses differences in

the toxicity of pollutants removed. Total

PEs are derived by taking the number of

pounds of a pollutant removed and

multiplying this number by a toxic

weighting factor (TWF). EPA calculates

TWFs for priority pollutants and some

additional nonconventional pollutants

using ambient water quality criteria and

toxicity values. The TWFs are then

standardized by relating them to a

particular pollutant, in this case,

copper. As of 1985 the water quality

criterion for copper was revised, thus

the TWF for copper also has been

revised. PEs are calculated only for

pollutants for which TWFs have been

estimated, thus they do not reflect

potential toxicity of some

nonconventional and, to date, any

conventional pollutants though the

newly added TWF for TPH does capture

a large portion of the more toxic

components of the conventional

pollutant, oil and grease. EPA’s standard

procedure is to rank the options

considered for each waste stream in

order of increasing PE removed. EPA

then calculates incremental cost-
66202 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

effectiveness as the ratio of the

incremental annual costs to the

incremental PE removed under each

option, compared to the previous (less

effective) option. Average costeffectiveness is calculated for each

option as a ratio of total costs to total PE

removed. In the case of pretreatment

standards, EPA does not include

pollutant removals if those pollutants

could be removed at the POTW, but

only includes the removal of pollutants

that would pass through the POTW in

its cost-effectiveness determination.

(Note that EPA assumes for this analysis

that POTW removal efficiency is the

same for treated influent as for

untreated influent. To the extent that

the removal efficiency is lower for

influent that has already been pretreated

this methodology could overestimated

removals resulting from the

pretreatment standards. EPA reports

annual costs for all cost-effectiveness

analyses in 1981 dollars, to enable

limited comparisons of the costeffectiveness among regulated

industries. Incremental costeffectiveness is the appropriate measure

for comparing one regulatory option to

an alternative, less stringent regulatory

option for the same rule. Some believe

that it may also be used to compare costeffectiveness across rules when

considering how the last increment of

stringency in one rule compares to the

last increment of stringency in another.

For comparing the overall costeffectiveness of one rule to another,

average cost-effectiveness may be a

more appropriate measure, but must be

considered in context with caution.

(Average cost-effectiveness can be

thought of as the ‘‘increment’’ between

no regulation and the selected option,

for any given rule).

As part of the cost-effectiveness

analysis for this proposed rule, the

nonconventional pollutant parameter

TPH (SGT–HEM) was included and

individual components of TPH, such as

the alkanes, were removed from the

cost-effectiveness calculations to avoid

double counting removals. Although

TPH has not been included in costeffectiveness calculations for past rules,

EPA believes that it is appropriate to

include it here because, for this

industry, a large portion of the toxic

constituents of TPH are compounds not

specifically included in the database of

toxic substances and associated toxic

weighting factors that past costeffectiveness calculation have relied

upon. In fact, TPH constitutes over 90

percent of the pounds equivalent

removals that EPA has estimated for this

proposed rule.

The inclusion of TPH were based on

alkanes data to estimate POTW removal

and soluble hydrocarbon data to

represent toxicity of TPH to calculate

the toxic weighting factor (TWF). The

POTW removal of 65 percent was

estimated using the U.S. EPA Risk

Reduction Engineering Laboratory

(RREL) Treatability Data Base’s average

percent removal for the three N-alkanes

with available percent removal data.

EPA recognizes that this approach may

not adequately characterize removals of

the soluble hydrocarbons on which its

TWF is based and requests comment on

how the estimate might be improved.

The TWF was calculated using an

aquatic life toxicity value of 560 μg/L for

soluble hydrocarbons (EPA’s Water

Quality Criteria, 1976) multiplied by an

application factor of 0.01 (EPA’s 1986

Quality Criteria for Water) and divided

into the criteria for copper (5.6 μg/L) to

give a value of 0.1. EPA solicits

additional information and data related

to these results and the methodology

used to calculate both the POTW

removal rate and the TWF. EPA also

solicits comments on the

appropriateness of its inclusion of TPH

in the cost-effectiveness calculation for

this proposed rule.

Table VII.E.1. presents the costeffectiveness of the OC and CP–IL

options using TPH data in lieu of the

alkanes data. The other options

considered for industrial laundries

wastewater treatment, DAF–IL, and

Combo–IL (including Combo-IL2Lim),

are not presented in this table because

they remove fewer pollutants at a

greater cost. EPA’s cost-effectiveness

methodology requires non cost-effective

options to be removed before

incremental cost-effectiveness is

calculated, since the incremental cost

per pound equivalent removed would

be negative for the next higher option.

See the C–E for more details. As the

table shows, the incremental costeffectiveness of the proposed option is

$108 per PE, and the average cost

effectiveness of the proposed option is

$206 per PE.

TABLE VII.E.1.—COST-EFFECTIVENESS ANALYSIS RESULTS

Option

Total annual Incremental Incremental

C–E $1981)

($/lb. eq.)

Average C–

E ($1981)

PE removed ($/lb. eq.) Cost ($Mil.

1981) PE removed Cost ($Mil.1981)

OC ..................................................................................... 5,278 $40.3 5,278 $40.3 $7,640 $7,640

CP–IL ................................................................................ 407,358 83.7 402,080 43.4 108 206

Table 4–1 in the Cost-Effectiveness

Analysis compares the incremental costeffectiveness of this proposed rule with

the incremental cost-effectiveness of 21

other pretreatment standards that EPA

has promulgated previously. The table

shows that 18 of these were more costeffective on an incremental basis than

this proposed rule. However, as noted

earlier, average (rather than

incremental) cost-effectiveness is

generally a more appropriate measure to

use in comparing the overall costeffectiveness of one rule to another.

Unlike incremental cost-effectiveness,

average cost-effectiveness is not affected

by the particular choice of alternative

options that were considered and

rejected. In this proposed rule, the

incremental or marginal costeffectiveness is lower than average costeffectiveness because the proposed

option (CP) is being compared to the

(OC) option that costs about half as

much as CP but removes only slightly

more than one percent of the pound

equivalents that are removed by the CP

option. Due to data limitations and time

constraints, EPA has not included in the

Cost-Effectiveness Analysis a

comparison of the average cost

effectiveness of this proposed rule to

that of previously promulgated rules.

Such a comparison may show this rule

to be even less cost-effective relative to

other rules than appears from Table 4–

1. Care should be used in interpreting

this comparison, however. Because the

initial focus of regulatory efforts was on

highly polluting manufacturing

industries, it is not surprising that over

time, fewer and fewer toxic removals

should come at higher and higher costs,

as the initial less treated, higher

pollutant concentration wastewaters are

addressed and the focus of regulation

move increasingly to less polluting
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66203

service industries and those which are

already regulated.

EPA also analyzed the cost

effectiveness of these same options

using the alkanes data and not using the

TPH toxic weighting factor and POTW

removal. Under this assumption, the

incremental cost effectiveness of the

proposed option is $1,660 per PE, and

its average cost effectiveness is $2,664

per PE.

EPA recognizes that the proposed rule

is not very cost-effective. However, costeffectiveness analysis only considers

pollutants for which a toxic weighting

factor has been estimated. Although this

proposed rule would eliminate over 13

million pounds of toxic and

nonconventional pollutants to POTWs

(See Table IX.C.1), only 1.3 million

pounds of these pollutants are

considered in the cost-effectiveness

analysis.

Furthermore, cost-effectiveness is not

a factor to be directly considered under

the CWA in setting such standards.

Elsewhere in this preamble, EPA has

requested comment on the option of not

regulating this industry and on whether

such a decision would be consistent

with the CWA.

VIII. Non-Water Quality Environmental

Impacts

As required by sections 304(b) and

306 of the Clean Water Act, EPA has

considered the non-water quality

environmental impacts associated with

the treatment technology options for the

industrial laundries industry. Non-water

quality impacts are impacts of the

proposed rule on the environment that

are not directly associated with

wastewater. Non-water quality impacts

include changes in energy consumption,

air emissions, and solid waste

generation of oil and sludge. In addition

to these non-water quality impacts, EPA

examined the impacts of the proposed

rule on noise pollution, and water and

chemical use. Based on these analyses,

EPA finds the relatively small increase

in non-water quality impacts resulting

from the proposed rule to be acceptable.

1. Air Pollution

Industrial laundry facilities generate

wastewater that contains significant

concentrations of organic compounds,

some of which are on the list of

Hazardous Air Pollutants (HAPs) in

Title 3 of the Clean Air Act

Amendments (CAAA) of 1990.

Atmospheric exposure of the organiccontaining wastewater may result in

volatilization of both volatile organic

compounds (VOCs) and HAPs from the

wastewater. VOCs and HAPs are emitted

from the wastewater beginning at the

point where the wastewater first

contacts ambient air. Thus, VOCs and

HAPs may be of concern immediately as

the wastewater is discharged from the

process unit. Emissions occur from

wastewater collection units such as

process drains, manholes, trenches, and

sumps, and from wastewater treatment

units such as screens, equalization

basins, DAF and CP units, and any other

units where the wastewater is in contact

with the air.

EPA believes that air emissions from

industrial laundry wastewater would be

similar before and after implementation

of the proposed rule because the

wastewater from all industrial laundries

currently has contact with ambient air

as it flows to the POTW. At facilities

that do not currently have treatment on

site, the wastewater typically flows from

the washers to an open or partially open

catch basin, then to the sewer and on to

the POTW, where the wastewater is

typically treated in open aerated basins

or lagoons. Air emissions from the

wastewater occur as the wastewater

flows from the facility to the POTW. At

a facility with treatment the wastewater

would have more contact with air while

still at the facility as it is treated in open

units such as equalization basins and CP

units prior to flowing through the sewer

to the POTW. Air emissions from the

treated wastewater occur at the

treatment units at the facility, as well as

while the wastewater flows to the

POTW. Thus, EPA expects that the

location of a portion of air emissions

from industrial laundry wastewater

would shift from the POTW collection

and treatment system to the facility

treatment system, but EPA believes that

the overall amount of air emissions from

industrial laundries wastewater would

not change.

EPA examined the total air emissions

from one industrial laundry’s untreated

wastewater stream assuming all volatile

pollutants volatilize from that stream.

EPA considered whether this total

amount of air emissions would be

acceptable assuming it represented

incremental air emissions due to the

proposed rule. (EPA does not believe

that the total amount of air emissions,

as calculated below, represents

incremental air emissions because the

air emissions would be similar before

and after implementation of the rule.)

EPA estimated that, in the worst-case

scenario, 14 Mg per year of HAPs would

be emitted from an industrial laundry’s

wastewater on an annual basis. Under

the CAAA, major sources of HAP(s)

emissions are defined as having either a

total emission of 25 Mg per year or

higher for the total of all HAP emitted

by a facility or an emission of 10 Mg per

year or higher for a single HAPs emitted

by a facility.

Based on the worst-case scenario and

this definition industrial laundries

would not emit HAP(s) to the degree

that they would be classified as a major

source as defined by the CAAA. EPA

also believes that no adverse air impacts

would be expected to occur due to the

proposed regulations. Thus, because

EPA does not expect an overall increase

in the amount of air emissions as a

result of the proposed rule and based on

EPA’s determination of the total

emissions from one industrial laundry’s

untreated wastewater, EPA finds the air

emissions impacts of the proposed rule

to be acceptable.

2. Solid Waste Generation

The proposed regulations are based

on the use of CP followed by dewatering

of the sludge generated from CP. Based

on information collected in the

industrial laundries detailed

questionnaires, most industrial laundry

sludge from CP or DAF treatment

systems is disposed of in nonhazardous

landfills. Based on site visits to

industrial laundries, EPA has found that

some facilities voluntarily dispose of

their sludge as hazardous waste even

though hazardous waste disposal is not

required by law.

EPA estimates that the incremental

increase in sludge generation (not

including savings in the volume of

sludge generated at POTWs that would

result from the proposed rule) for the

1,606 facilities in the industry covered

by the rule would be 74 thousand tons

per year of wet sludge, or 26,000 tons

per year of dry solids. For more details,

see Chapter 14 of the Development

Document. Approximately 430 million

tons (dry basis) of industrial

nonhazardous waste was sent to

landfills in the U.S. in 1986 (Subtitle D

Study Phase I: Report EPA No.

530SW86–054). This proposed rule

would result in only a 0.006% increase

in sludge generation. Data, from the

Waste Treatment Industry Phase II:

Landfills, suggests that current landfill

capacity can accept this increase in

solid waste generation. Therefore, EPA

believes the solid waste impacts of the

proposed rule are acceptable.

3. Energy Requirements

EPA estimates that implementation of

the proposed regulation would result in

a net increase in energy consumption

for the industrial laundries industry.

The incremental increase is based on

electricity used to operate wastewater

treatment equipment at facilities that are

not currently operating treatment
66204 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

systems comparable with the proposed

CP option.

EPA estimates that the incremental

increase in electricity use for the

industrial laundries industry as a result

of the proposed rule would be 76

million kilowatt hours per year.

Approximately 2,805 billion kilowatt

hours of electric power were generated

in the U.S. in 1990. The incremental

increase in energy use for the industrial

laundries industry corresponds to

0.0027% of the national energy

requirements. EPA estimates the

incremental energy increase to be a

small percentage of electricity currently

used by the industrial laundries

industry to operate all washing, drying,

and treatment equipment. For these

reasons, energy impacts of the proposed

rule are acceptable.

IX. Environmental Benefits Analysis

A. Introduction

This section describes results of EPA’s

environmental benefits analysis. For

more details, see the WQBA.

B. Overview of the Industrial Laundry

Industry’s Effluent Discharges

EPA’s record indicates that industrial

laundry facilities nationwide currently

discharge to POTWs 4.9 million pounds

per year of priority and

nonconventional pollutants (excluding

COD, TOC, and SGT–HEM), and 35.9

million pounds of HEM. Of the 35.9

million pounds of HEM, 13.2 million

pounds are SGT–HEM (see Table IX.C.1

for loadings of all pollutants). SGT–

HEM, consisting of polycyclic aromatic

hydrocarbons, are components of HEM;

SGT–HEM is being used as an indicator

for priority and nonconventional

pollutants.

For this rulemaking, EPA evaluated

the environmental benefits of

controlling the pollutant discharges

from industrial laundries facilities to

POTWs through national analyses of the

primary treatment options: OC, DAF–IL,

CP–IL, and Combo-IL. Since EPA

determined that the OC option removed

smaller amounts of organics than the

other options, EPA did not perform a

separate environmental assessment for

this option.

Discharges of priority and

nonconventional pollutants into

freshwater and estuarine ecosystems

may alter aquatic habitats, adversely

affect aquatic biota, and adversely

impact human health through the

consumption of contaminated fish and

water. Furthermore, these pollutants

may interfere with POTW operations

through contamination of sewage

sludge, thereby restricting the method of

disposal, or through inhibition of the

microbes present in activated sewage

sludge. Many of the pollutants of

concern from industrial laundries have

at least one toxic effect (human health

carcinogen and/or non-cancer toxicant

or aquatic toxicant). In addition, many

of these pollutants bioaccumulate in

aquatic organisms and persist in the

environment.

C. Benefits of the Proposed Rule

EPA estimates that the proposed

standards would significantly reduce

pollutant discharges to POTWs, as

shown by the loadings estimates in

Table IX.C.1 for five categories of

pollutants. Note that there is significant

overlap among some of the pollutants

listed. These five categories were

segregated in order to minimize the

double counting of pollutants within

each category, although some overlap

remains (e.g., some TOC is also

measured as COD). It is not appropriate

to sum loadings across categories as

there is overlap between categories, for

example, BOD and COD. Reductions in

industrial laundry pollutant discharges

to POTWs would result in a number of

benefits, including: reduced cost of

disposal or use of municipal sewage

sludge that is affected by industrial

laundry pollutant discharges; and

reduced occurrence of biological

inhibition of activated sludge at POTWs.

Resulting reductions in discharges from

POTWs to surface waters of the US

would have additional benefits:

improved quality of freshwater,

estuarine, and marine ecosystems;

increased survivability and diversity of

aquatic life and terrestrial wildlife; and

reduced risks to human health through

consumption of fish or water taken from

affected waterways.

TABLE IX.C.1.—SUMMARY OF ESTIMATED POLLUTANT LOADINGS FROM INDUSTRIAL LAUNDRIES TO POTWS

[Natioal Estimates]

Regulatory option

Priority and

nonconventional pollutants 1(million

lb/yr)

HEM (million lb/yr) 2

SGT–HEM

(million lb/

yr)

Other conventional

pollutants

(million lb/

yr) 3

Other nonconventional pollutants

(million lb/

yr) 4

Baseline .................................................................................................... 4.9 35.9 13.2 176 346

DAF–IL ..................................................................................................... 2.9 15.9 2.6 137 252

CP–IL ........................................................................................................ 2.9 15.2 2.4 139 258

Combo-IL .................................................................................................. 3.1 15.9 2.6 139 258

1Excludes Total Organic Carbon (TOC), Silica Gel Treated N-Hexane Extractable Material (SGT–HEM), and Chemical Oxygen Demand

(COD). 2 Includes the pounds of SGT–HEM.

3 Includes Biological Oxygen Demand (BOD) and Total Suspended Solids (TSS).

4 Includes Chemical Oxygen Demand (COD) and Total Organic Carbon (TOC).

EPA assessed the benefits from the

expected pollutant reductions in three

broad classes: human health, ecological,

and economic productivity benefits.

Each class is composed of a number of

more narrowly defined benefit

categories. EPA expects that benefits

will accrue to society in all of these

categories. However, because of data

limitations and the understanding of

how society values some of these benefit

categories, EPA was not able to analyze

all of these categories with the same

level of rigor. At the highest level of

analysis, EPA was able to quantify the

expected effects for some benefit

categories and attach monetary values to

them. Benefit categories for which EPA

developed dollar estimates include

reduction in cancer risk from fish

consumption and increased value of

recreational fishing opportunities,

reduced risk to aquatic life, and other

non-use benefits. For other benefit

categories, reduced risk of non-cancer

toxic effects to human health from

consumption of fish and drinking water;

and reduced costs of biological

inhibition at POTWs, EPA was able to

quantify expected effects but not able to

estimate monetary values for them.

Finally, there is an additional nonquantified, non-monetized benefit
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66205

categories of enhanced water-dependent

recreation other than fishing. Note that

benefits to wildlife and to threatened or

endangered species; and biodiversity

benefits are often included as nonquantified benefits but in the current

analysis an attempt has been made to

monetize them.

D. Human Health Benefits

EPA analyzed the following measures

of health-related benefits from the

proposed rule in the WQBA: reduced

cancer risk from fish consumption;

reduced risk of non-cancer toxic effects

from fish and water consumption; and,

reduced occurrence of in-waterway

pollutant concentrations in excess of

human health-based ambient water

quality criteria (AWQC) or in excess of

documented toxic effect levels for those

chemicals for which EPA has not

published water quality criteria. Of

these measures, EPA was able to

monetize only the reduction in cancer

risk.

EPA first predicted steady-state, instream pollutant concentrations by

assuming complete immediate mixing

with no loss from the system. Of the 172

in-scope respondent facilities, EPA was

unable to include 33 facilities in the

benefits analysis because of incomplete

information on the POTWs to which

these sample facilities discharge. The

remaining 139 facilities are discharging

to 118 POTWs that in turn discharge to

113 water bodies (88 rivers/streams, 21

bays/estuaries, and 4 lakes).

EPA then extrapolated the

environmental assessment results for

the sample facilities to the entire

regulated population of industrial

laundry facilities nationwide

(approximately 1,606 facilities

discharging to 1,178 POTWs). For this

extrapolation, each sample facility

received a sample weight based on the

varying number of additional facilities

of the same approximate size engaged in

similar activities under similar

economic conditions. EPA then

estimated the change in aggregate cancer

risk through consumption of fish in

waterbodies where the identified

POTWs discharge. EPA predicted

pollutant concentrations in fish by using

the in-stream pollutant concentration

based on modeled POTW effluent

concentrations due to pass-through, and

pollutant-specific bioconcentration

factors that account for the degree to

which the pollutant in the water will be

concentrated in fish tissue. EPA used

data on licensed fishing populations by

state and county, presence of fish

advisories, fishing activity rates, and

average household size to estimate the

exposed population of recreational and

subsistence anglers and their families

that would benefit from reduced

pollutant concentrations in fish. EPA

used fish consumption rates for

recreational and subsistence anglers to

estimate the change in cancer risk

among these populations.

For the proposed rule, the benefits

associated with reduced incidence of

cancer from fish consumption are

estimated to range from $0.089 million

to $0.50 million per year ($1997),

depending on the choice of willingnessto-pay value that is used to value the

avoided cancer events and depending

on the treatment option considered. For

combined recreational and subsistence

angler household populations, EPA

projects that the treatment options

would eliminate approximately 0.04

cancer cases per year from a baseline of

about 0.1 cases estimated at the current

discharge level (see Table IX.D.1). EPA

valued the reduced cancer cases using

estimated willingness-to-pay values for

avoiding premature mortality. The

values used in this analysis are based on

a range of values recommended by

EPA’s Office of Policy Analysis from a

review of studies quantifying

individuals’ willingness to pay to avoid

increased risks to life. In 1997 dollars,

these values range from $2.4 million to

$12.5 million per statistical life saved.

TABLE IX.D.1.—ESTIMATED ANNUAL

AVOIDED CANCER CASES FROM

FRESHWATER FISH CONSUMPTION

Regulatory option

Number of

cases

avoided

(National

estimates)

Baseline .................................... —

CP–IL ........................................ 0.04

DAF–IL ...................................... 0.04

Combo-IL .................................. 0.04

To estimate the reduced risk of noncancer health effects (e.g., systemic

effects, reproductive toxicity, and

developmental toxicity) from fish and

water consumption for each treatment

option, EPA used risk reference doses,

in conjunction with in-stream pollutant

concentrations, to calculate a hazard

score. A value of one or greater for a

hazard score indicates the potential for

non-cancer hazards to occur. In this

analysis, EPA analyzed only pollutant

loadings from industrial laundries to

particular water bodies, i.e., EPA did

not consider background loadings from

other sources. The hazard score, which

EPA calculated by summing over all

pollutants, was less than one for

baseline conditions as well as for all

treatment options.

EPA also evaluated reduced

occurrence of in-waterway pollutant

concentrations in excess of humanhealth based AWQC. At current

discharge levels, in-stream

concentrations of two pollutants—bis(2-

ethylhexyl)phthalate and

tetrachloroethene—are projected to

exceed human health criteria

(developed for consumption of water

and organisms) in 9 receiving streams

nationwide (see Table IX.D.2) for a total

of 17 exceedences. The proposed PSES

regulated discharge levels would

eliminate the occurrence of pollutant

concentrations in excess of the human

health-based AWQCs in 7 of 9 affected

streams.

TABLE IX.D.2. DISCHARGE REACHES

WITH POLLUTANT CONCENTRATIONS

EXCEEDING AWQC LIMITS FOR

PROTECTION OF HUMAN HEALTH,

AND REDUCTIONS ACHIEVED BY

REGULATORY OPTIONS

Regulatory option

Number of

reaches with

concentrations

exceeding

health-based

AWQCs for

water and organisms (national basis)

Baseline ................................ 9

CP–IL .................................... 2

DAF–IL .................................. 2

Combo-IL .............................. 2

E. Ecological Benefits Valued on the

Basis of Enhanced Recreational Fishing

Opportunities

EPA analyzed one measure of

ecological benefits from the proposed

regulation: reduced occurrence of inwaterway pollutant concentrations in

excess of acute and chronic AWQCs that

protect aquatic life. EPA used the

findings from the analysis of reduced

occurrence of pollutant concentrations

in excess of both EPA’s ecological and

human health AWQCs to assess

improvements in recreational fishing

habitats and, in turn, to estimate a

monetary value for the enhanced

recreational fishing opportunities.

To assess aquatic life benefits, EPA

estimated the effect of facility

discharges of regulated pollutants on

pollutant concentrations in affected

waterways. EPA compared the

estimated concentrations on a baseline

and post-compliance basis, with the

Agency’s AWQCs for acute and chronic

exposure impacts to aquatic life.

Pollutant concentrations in excess of

these values indicate potential impacts

to aquatic life. EPA’s analysis found that
66206 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

78 stream reaches exceed chronic

AWQC values at baseline discharge

levels for a total of 93 exceedences (see

Table IX.E.1). Under three options, EPA

estimates that the proposed regulation

would eliminate concentrations in

excess of the chronic AWQC values for

aquatic life in 66 affected reaches. EPA

predicts that no pollutants under

current or proposed discharge levels

would exceed acute AWQC.

EPA expects that society will value

improvements in aquatic species

habitat, resulting from the reduction of

pollutant concentrations in excess of the

chronic AWQC values, by a number of

mechanisms. For this analysis, EPA

estimated a partial monetary value of

ecological improvements based on the

value of enhanced recreational fishing

opportunities. Specifically, the

elimination of pollutant concentrations

exceeding AWQC limits for protection

of aquatic species and human health is

expected to generate benefits to

recreational anglers. Such benefits are

expected to manifest as increases in the

value of the fishing experience per day

fished or the number of days anglers

subsequently choose to fish the cleaner

waterways. These benefits, however, do

not include all of the benefits that are

associated with improvements in

aquatic life. For example, recreational

benefits do not capture the benefit of

increased assimilative capacity of a

receiving waterbody, improvements in

the taste and odor of the instream flow,

or improvements to other recreational

activities such as swimming and

wildlife observation that may be

enhanced by improved water quality.

TABLE IX.E.1.—DISCHARGE REACHES WITH POLLUTANT CONCENTRATIONS EXCEEDING CHRONIC AWQC LIMITS FOR

PROTECTION OF AQUATIC SPECIES, AND REDUCTIONS ACHIEVED BY REGULATORY OPTIONS

Regulatory option

Number of

pollutants estimated to exceed chronic

AWQC limits

Number of

reaches with

concentrations

exceeding

chronic AWQC

limits

Total

exceedences

of chronic

AWQC limits

Baseline ........................................................................................................................................ 3 78 93

CP–IL ............................................................................................................................................ 2 12 19

DAF–IL ......................................................................................................................................... 2 12 19

Combo-IL ...................................................................................................................................... 2 12 19

None of the acute AWQC limits were estimated to be exceeded in the baseline.

EPA calculated the value of enhanced

recreational fishing opportunities from

the proposed rule based on the concept

of achievement of a contaminant-free

fishery. For this analysis, EPA assumed

for an affected waterway that

elimination of all instances in which

industrial laundry pollutant

concentrations exceed AWQCs that

protect human health or aquatic species

may be interpreted as approximately

equivalent to the achievement of a

contaminant-free fishery. EPA first

estimated a baseline value of those

fisheries in which all instances of

industrial laundry pollutant

concentrations in excess of AWQCs are

estimated to be eliminated by

regulation. This value is based on the

number of annual fishing days at the

affected waterway and the value of a

fishing day. Second, EPA estimated the

value of improving the water quality in

these fisheries based on the incremental

percentage increase in value to anglers

of freeing the fishery of contaminants

(Lyke, 1992). Estimates of the increase

in value of recreational fishing to

anglers range from $1.9 million to $6.7

million annually ($1997) for all three

treatment options, depending on the

baseline value of the fishery and the

estimated incremental benefit values

associated with freeing the fishery from

contaminants. This analysis does not

account for sources of pollutant

contamination other than industrial

laundries or for pollutants not

discharged by industrial laundries.

EPA also estimated non-market nonuse benefits. These non-market non-use

benefits are not associated with current

use of the affected ecosystem or habitat;

instead, they arise from (1) the

realization of the improvement in the

affected ecosystem or habitat resulting

from reduced effluent discharges and (2)

the value that individuals place on the

potential for use sometime in the future.

Because nonuse value is a sizable

component of the total economic value

of water resources, EPA estimated

change in nonuse values in proportion

to recreational fishing benefits. For this

analysis, as was done in the Great Lakes

Water Quality Guidance, EPA

conservatively estimated that nonuse

benefits compose one-half of

recreational fishing benefits. For all

three treatment options, this method

yields non-use benefits attributable to

the proposed regulation ranging from

$0.94 million to $3.4 million ($1997)

per year.

F. Benefits From Reduced Cost of

Sewage Sludge Disposal and Reduced

Incidence of Inhibition

EPA expects that reduced effluent

discharges from the industrial laundries

industry would also yield economic

productivity benefits. For this analysis,

EPA estimated productivity benefits for

two benefit categories: (1) reduced

pollutant contamination of effluent

discharged by industrial laundry

facilities to sewage treatment systems

and (2) associated savings in sewage

sludge use or disposal costs; and, a

reduction in biological inhibition of

activated sludge. For the former

category, EPA examined the following:

(1) whether industrial laundry baseline

discharges would prevent POTWs from

being able to meet the metals

concentration limits required for certain

lower cost sewage sludge use or

disposal practices—beneficial land

application and surface disposal; and (2)

whether limitations on the selection of

management practices would be

removed under regulatory options.

EPA has promulgated regulations

establishing standards for sewage sludge

when it is applied to the land, disposed

of at dedicated sites (surface disposal),

and incinerated (40 CFR Part 503). In

addition, EPA has also established

standards for sewage sludge when it is

disposed of in municipal solid waste

landfills (40 CFR Part 258). For land

application, the regulations include

three sets of pollutant limits for ten

metals: (1) Pollutant Ceiling Limits,

which all land applied sewage sludge

must meet with certain limitations, (2)

Cumulative Pollutant Loading Limits

(which limit the cumulative amount of

metal which may be applied to the soil)

and (3) more stringent Pollutant

Concentration Limits, which provide

more favorable terms for land
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66207

application of sewage sludge. Sewage

sludge that meets only the less stringent

Ceiling Limits may be applied to land;

however, the use of the sewage sludge

is subject to pollutant loading limits,

which restrict the quantity of sewage

sludge that may be applied to a given

site. If the sewage sludge meets the more

stringent Concentration Limits, it is

considered high quality sewage sludge

and is not subject to the cumulative

limits on land application and other

regulatory requirements in the land

application subpart, i.e., general

conditions and certain management

practices, such as more extensive

recordkeeping requirements. Thus,

disposing of high quality sewage sludge

costs less than disposing of low quality

sewage sludge that meets only the

ceiling concentrations for metals.

EPA estimated sewage sludge

concentrations of ten metals for sample

facilities under baseline and postregulatory options discharge levels. EPA

compared these concentrations with the

relevant metal concentration limits for

the following sewage sludge

management options: Land ApplicationHigh (Concentration Limits), Land

Application-Low (Ceiling Limits), and

Surface Disposal. In the baseline case,

EPA estimated that concentrations of

one pollutant (lead) at 10 POTWs would

fail the Land Application-High limits

while meeting the Land ApplicationLow limits. EPA estimated that no

POTWs would fail any of the Surface

Disposal limits. Under all three options,

EPA estimated that all 10 POTWs would

meet the Land Application-High limits

and that an estimated 6,200 dry metric

tons (DMT) of annual disposal of sewage

sludge would newly qualify for

beneficial use under the Land

Application-High limits. EPA estimated

the reduced time required for recordkeeping for sewage sludge meeting the

more stringent Land Application-High

criteria, and, on this basis, developed a

partial estimate of monetary benefits

from reduced metals contamination of

sewage sludge. For all three options, the

proposed regulation is expected to

result in benefits from sewage sludge

quality improvements of $0.006 million

to $0.01 million ($1997) annually. (EPA

notes that the rule would also generate

additional metals-contaminated sludge

at industrial laundries, but has already

included the costs of disposing of this

sludge in the compliance costs of the

rule.)

EPA estimated inhibition of POTW

operations by comparing predicted

POTW influent concentrations to

available inhibition levels for 45

pollutants. At current discharge levels,

EPA estimates POTW concentrations of

lead exceed biological inhibition criteria

at two POTWs. Under all treatment

options, inhibition problems are

eliminated.

EPA based the POTW inhibition and

sludge values upon engineering and

health estimates contained in guidance

or guidelines published by EPA and

other sources. Because the values used

in this analysis are not, in general,

regulatory values, EPA did not base the

proposed pretreatment discharge

standards directly on this approach.

However, the values and methodology

used in this analysis are helpful in

identifying potential benefits for POTW

operations and sludge disposal that may

result from the compliance with

proposed pretreatment discharge

requirements.

G. Discussions With POTW Operators

and Pre-Treatment Coordinators

To understand the frequency and

characteristics of problems to POTWs

resulting from industrial laundry

discharges, EPA obtained information

from discussions with EPA regional

staff, and with POTW operators

representing 40 POTWs that receive

discharges from industrial laundries. Of

these 40 POTWs, 11 encounter some

difficulty resulting from industrial

laundry discharges either currently or in

the recent past. A number of the other

POTWs that encountered problems with

industrial laundry discharges in the past

have established local limits applicable

to laundries to address those problems.

Problems encountered by POTWs, as

reported by the operators, included: oil

and grease, which may clog pipes and

pump stations, inhibit activated sludge

and otherwise inhibit POTW operations;

metals, which may also inhibit activated

sludge; and pH fluctuations, which can

injure POTW workers and deteriorate

concrete pipes and manholes. The

Water Quality Benefits Analysis notes

that there are solutions available to

POTWs for these problems, although

they do entail costs to the POTWs. A

further analysis of three case studies do

not document substantial problems from

industrial laundries discharges that

would be reduced by regulation.

X. Related Acts of Congress, Executive

Orders, and Agency Initiatives

A. Regulatory Flexibility Act (RFA) as

Amended by the Small Business

Regulatory Enforcement Fairness Act

(SBREFA)

Under the Regulatory Flexibility Act

(RFA), 5 U.S.C. 601 et seq., as amended

by SBREFA, EPA generally is required

to conduct an initial regulatory

flexibility analysis (IRFA) describing the

impact of the proposed rule on small

entities. Under section 605(b) of the

RFA, if the Administrator certifies that

the rule will not have a significant

economic impact on a substantial

number of small entities, EPA is not

required to prepare the IRFA.

EPA conducted an IRFA pursuant to

section 603(b) of the RFA addressing:

• The need for, objectives of, and

legal basis for the rule;

• A description of, and where

feasible, an estimate of the number of

small entities to which the rule would

apply;

• The projected reporting,

recordkeeping, and other compliance

requirements of the rule, including an

estimate of the classes of small entities

that would be subject to the rule and the

types of professional skills necessary for

preparation of the report or record;

• An identification, where

practicable, of all relevant Federal rules

which may duplicate, overlap or

conflict with the proposed rule;

• A description of any significant

regulatory alternatives to the proposed

rule which accomplish the stated

objectives of applicable statutes and

which minimize any significant

economic impact of the proposed rule

on small entities. Consistent with the

stated objectives of the CWA, the

analysis discusses significant

alternatives such as—

(1) establishing differing compliance

or reporting requirements or timetables

that take into account the resources

available to small entities;

(2) clarification, consolidation, or

simplification of compliance and

reporting requirements under the rule

for such small entities;

(3) the use of performance rather than

design standards;

(4) an exclusion from coverage of the

rule, or any part thereof, for such small

entities. The IFRA is presented in

Chapter 9 of the EA. Based on the IRFA

and other factors, this proposed rule

incorporates an exclusion to eliminate

disproportionate impacts on small

businesses and also reduces the number

of small businesses affected by the

proposed rule.

Pursuant to the RFA as amended by

SBREFA, EPA convened a Small

Business Advocacy Review Panel. The

Panel is comprised of representatives

from three federal agencies: EPA, the

Small Business Administration, and the

Office of Management and Budget. The

Panel reviewed materials EPA prepared

in connection with the RFA, and

collected the advice and

recommendations of small entity

representatives. For this proposed rule,

the small entity representatives
66208 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

included owners of small industrial

laundries and trade association

representatives. The Panel prepared a

report (available in the public docket for

this rulemaking) that summarizes the

outreach to small entities and the

comments submitted by the small entity

representatives. The Panel’s report also

presents their findings on issues related

to the elements of an IRFA.

As part of the findings, the Panel

recommended that the Agency evaluate

other thresholds for excluding small

businesses, in addition to the proposed

one million pounds of total production

and 255,000 pounds of shop and/or

printer towels. Examples of alternative

thresholds that the Panel recommended

EPA solicit comment on are three to five

million pounds of total production with

shop and/or printer towel thresholds

between 255,000 and 500,000 pounds.

EPA evaluated a total of 17 threshold

combinations as possible bases for

excluding small businesses. The

analysis of 13 threshold combinations

are presented in a table in the final

Panel report. In response to the

recommendations in the Panel report,

EPA analyzed 4 additional threshold

combinations. The results of all 17

threshold combinations are found in

Appendix E of the EA.

The thresholds (i.e., exemption

cutoffs) ranged from one million to five

million pounds of production, both with

and without cutoffs related specifically

to shop and/or printer towels. The shop

and/or printer towel cutoffs ranged from

255,000 to 500,000 pounds. In addition,

EPA analyzed threshold cutoffs

involving only ‘‘heavy production,’’

defined as shop and/or printer towels,

mops, fender covers, and filters, and

excluding all small businesses (as

defined by revenues less than $10.5

million per year).

Results of these higher threshold

analyses suggest that, by using the three

to five million pounds of production

levels, between 15 and 34 percent of the

pollutant removals would be excluded

from regulation. As noted earlier, with

EPA’s proposed exclusion, the excluded

facilities would account for less than 3

percent of the pollutant removals from

the waters of the U.S. than would occur

if the proposed rule were implemented

without the exclusion. Furthermore,

with the higher thresholds,

approximately 600 to 1000 facilities

(depending on the actual threshold)

would be excluded from coverage by the

proposed regulation, while closures

resulting from the proposed rule would

be reduced by only two facilities. Costs

for the proposed rule could be reduced

by up to 60 percent with higher

thresholds and cost per toxic pound

equivalent removed could also be

reduced by up to 40 percent. See the

Cost-Effectiveness Analysis. The total

amount of removals excluded under the

highest threshold considered (about

150,000 PE), while a significant share of

potential removals from the industrial

laundries industry, is small compared to

removals by other effluent guidelines for

primary manufacturing industries. The

SBREFA Panel also noted the statement

by one of the small entity

representatives that the number of small

facilities has declined since EPA

surveyed the industry in 1993. If this is

true, it would mean that both the cost

savings and the amount of potential

removals excluded for any particular

small business exclusion would be less

than estimated. A table summarizing the

results of the 17 threshold analyses is

contained in Appendix E of the EA and

a table summarizing the results of the

original 13 threshold analyses is

contained in the Panel report. The

Agency solicits comments on these

alternative exclusion levels as well as

the exclusion level proposed today.

B. Executive Order 12866

Under Executive Order 12866 (58 FR

51735 (October 4, 1993)) the Agency

must determine whether the regulatory

action is ‘‘significant’’ and therefore

subject to OMB review and the

requirements of the Executive Order.

The Order defines ‘‘significant

regulatory action’’ as one that is likely

to result in a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, or

State, local, or tribal governments or

communities;

(2) create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) materially alter the budgetary

impact of entitlements, grants, user fees,

or loan programs or the rights and

obligations of recipients thereof; or

(4) raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.’’

Pursuant to the terms of Executive

Order 12866, it has been determined

that this rule is a ‘‘significant regulatory

action’’. As such, this action was

submitted to OMB for review. Changes

made in response to OMB suggestions or

recommendations will be documented

in the public record.

C. Unfunded Mandates Reform Act

(UMRA)

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), P.L. 104–

4, establishes requirements for Federal

agencies to assess the effects of their

regulatory actions on State, local, and

tribal governments and the private

sector. Under section 202 of the UMRA,

EPA generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local,

and tribal governments, in the aggregate,

or to the private sector, of $100 million

or more in any one year. Before

promulgating an EPA rule for which a

written statement is needed, section 205

of the UMRA generally requires EPA to

identify and consider a reasonable

number of regulatory alternatives and

adopt the least costly, most costeffective or least burdensome alternative

that achieves the objectives of the rule.

The provisions of section 205 do not

apply when they are inconsistent with

applicable law. Moreover, section 205

allows EPA to adopt an alternative other

than the least costly, most cost-effective

or least burdensome alternative if the

Administrator publishes with the final

rule an explanation why that alternative

was not adopted. Before EPA establishes

any regulatory requirements that may

significantly or uniquely affect small

governments, including tribal

governments, it must have developed

under section 203 of the UMRA a small

government agency plan. The plan must

provide for notifying potentially

affected small governments, enabling

officials of affected small governments

to have meaningful and timely input in

the development of EPA regulatory

proposals with significant Federal

intergovernmental mandates, and

informing, educating, and advising

small governments on compliance with

the regulatory requirements.

EPA has determined that this

proposed rule would contain a Federal

mandate that may result in expenditures

of $100 million or more for the private

sector in any one year. Accordingly,

EPA has prepared the written statement

required by section 202 of the UMRA.

This statement is contained in the EA

for the rule and is summarized below.

EPA has determined that this rule

contains no regulatory requirements that

might significantly or uniquely affect

small governments and thus this rule is

not subject to the requirements of

section 203 of UMRA. Nevertheless,

EPA has consulted with state and local

governments as described in Section III

of this preamble.
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66209

EPA prepared several supporting

analyses for the proposed rule.

Throughout this preamble and in the

supporting analyses, EPA has responded

to the UMRA section 202 requirements.

As anticipated by OMB, most

considerations with respect to costs,

benefits, and regulatory alternatives are

addressed in the EA, which is

summarized in Sections VII and IX of

this preamble and presented in detail in

Section Ten of the EA. A very brief

summary follows.

The statutory authority for this

proposal is found in multiple sections of

the CWA (see section I of this

preamble). In part, these sections of the

CWA authorize EPA to issue standards

to address effluent discharges.

EPA prepared a qualitative and

quantitative cost-benefit assessment of

the federal requirements imposed by

today’s proposed rule. In large part, the

private sector, not other governments,

will incur the costs. Specifically, the

costs of this federal mandate are

compliance costs to be borne by the

regulated industrial laundry facilities. In

addition, although some States and local

governments will incur costs to

implement standards, these costs to

governments will not exceed the

thresholds established by UMRA and in

general, these standards will make it

easier for POTWs to establish limits on

discharges to POTWs.

EPA estimates that the total

annualized costs for the private sector to

comply with the federal mandate are

$93.9 million (post-tax)/$136.4 million

(pre-tax). The mandate’s benefits are

primarily in the areas of reduced health

risk and improved water quality. The

EA describes, qualitatively, such

benefits. The analysis also quantifies a

portion of the benefits and monetize a

subset of these benefits. EPA estimates

that annual monetized benefits would

be $2.9 to $10.3 million.

EPA does not believe that there will

be any disproportionate budgetary

effects of the rule on any particular

areas of the country, particular types of

communities, or particular industry

segments. EPA’s basis for this finding is

the analysis of economic impacts, which

is summarized in section VII of the

preamble and in the EA. A key feature

of the analysis is the estimation of

financial impacts for each facility

incurring compliance costs. EPA

considered the costs, impacts and other

effects and found no disproportionate

budgetary effects on any specific regions

or individual communities. The EA also

describes the rule’s effects on the

national economy in terms of effects on

productivity, economic growth, and

international competitiveness; EPA

found such effects to be minimal.

For each regulatory decision in

today’s proposal, EPA believes it has

selected the ‘‘least costly, most costeffective, or least burdensome

alternative’’ that achieves the objective

of the rule. This satisfies the section 205

of the UMRA. Some, including members

of the SBREFA panel, have suggested

that EPA consider other options

including no regulation or higher

thresholds for the small business

exclusion and EPA is soliciting

comments on those alternatives. EPA

believes, however, that the proposed

option appropriately reflects what is

economically achievable for the reasons

elsewhere discussed in this preamble.

D. Paperwork Reduction Act

The proposed industrial laundries

pretreatment standards contain no new

information collection activities beyond

that which is already required in 40 CFR

Part 403, and therefore, no information

collection request will be submitted to

OMB for review in compliance with the

Paperwork Reduction Act, 44 U.S.C.

3501 et seq.

E. National Technology Transfer and

Advancement Act

Under section 12(d) of the National

Technology Transfer and Advancement

Act, the Agency is required to use

voluntary consensus standards in its

regulatory activities unless to do so

would be inconsistent with applicable

law or otherwise impractical. Voluntary

consensus standards are technical

standards (e.g., materials specifications,

test methods, sampling procedures,

business practices, etc.) that are

developed or adopted by voluntary

consensus standard bodies. Where

available and potentially applicable

voluntary consensus standards are not

used by EPA, the Act requires the

Agency to provide Congress, through

the Office of Management and Budget,

an explanation of the reasons for not

using such standards. This section

summarizes EPA’s response to the

requirements of the NTTAA for the

analytical test methods promulgated as

part of today’s effluent limitations

guidelines and standards. EPA

performed literature searches to identify

any analytical methods from industry,

academia, voluntary consensus standard

bodies and other parties that could be

used to measure the analytes in today’s

proposed rulemaking. The results of this

search formed the basis for EPA’s

analytical method development and

validation in support of this proposed

rulemaking.

EPA’s analytical test method

development is consistent with the

requirements of the NTTAA. Although

the Agency initiated data collection for

these effluent guidelines many years

prior to enactment of the NTTAA,

traditionally, analytical test method

development has been analogous to the

Act’s requirements for consideration

and use of voluntary consensus

standards.

The proposed rule would require

dischargers to monitor for SGT-HEM,

Copper, Lead, Zinc, Bis (2-Ethylhexyl)

Phthalate, Ethylbenzene, Naphthalene,

Tetrachloroethene, Toluene, m-Xylene,

and o-&p-Xylene. Except for SGT-HEM

and Xylenes, methods for monitoring

these pollutants are specified in tables

at 40 CFR Part 136. When available,

methods published by voluntary

consensus standards bodies are

included in the list of approved

methods in these tables. Specifically,

voluntary consensus standards from the

American Society for Testing and

Materials (ASTM) and from the 18th

edition of Standard Methods (published

jointly by the American Public Health

Association, the American Water Works

Association and the Water Environment

Federation) are approved for Copper,

Lead and Zinc. In addition, USGS

methods are approved for these three

inorganic pollutants. Voluntary

consensus standards from the 18th

edition of Standard Methods are also

approved for Bis (2-Ethylhexyl)

Phthalate, Ethylbenzene, Naphthalene,

Tetrachloroethene, and Toluene.

For SGT-HEM, EPA is proposing to

use EPA Method 1664. This method was

proposed for promulgation in 40 CFR

Part 136 on January 23, 1996 (61 FR

1730). Method 1664 was developed by

EPA to replace previously used

gravimetric procedures (for

determination of oil and grease and total

petroleum hydrocarbons) that employed

Freon-113, as part of EPA’s efforts to

reduce the dependency on the use of

chlorofluorocarbons pursuant to Title VI

of the Clean Air Act. EPA is unaware of

the existence of an appropriate nonFreon method from a voluntary

consensus standards body.

For the Xylenes, EPA proposes to use

EPA Methods 1624 and 624 which are

promulgated at 40 CFR Part 136. These

analytical methods were used in data

collection activities in support of

today’s proposed limitations although

the xylenes are not specified as analytes

in the methods. EPA has not identified

any methods from a voluntary

consensus standards body that could be

used to measure these analytes.

EPA requests comments on the

discussion of NTTAA, on the
66210 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

consideration of various voluntary

consensus standards, and on the

existence of other voluntary consensus

standards that EPA may not have found.

XI. Related Rulemakings

A. Office of Solid Waste (OSW)

Activities Related to This Effort

Solvent-contaminated industrial shop

towels have been a longstanding issue

within the Resources Conservation and

Recovery Act (RCRA) program. As

mentioned earlier, a free liquids

inspection policy exists in the industry.

The industrial laundry trade association

also has established guidance for

industrial laundries and their customers

to use in the management of solventcontaminated shop towels—foremost

being that the industrial laundry not

accept any shop towels bearing free

liquids and their customers use a

collection system or other process to

remove any free liquids. OSW is

currently collecting data to better

understand the use and management of

both disposable and reusable solventcontaminated industrial shop towels.

The objective of this range-finding effort

is to assist the Agency in determining

whether the Agency’s rules and policies

should be modified to address current

problems with the regulation of these

materials. Questions being addressed in

this study include:

Site Visits

1. What are the demographics of

industry using solvents and shop

towels/wipers; i.e., type of industry, size

of firm, Material Safety Data Sheets,

type of wipers used, number of wipers

used monthly or annually, range of

solvent amounts put on wiper, amount

of solvent used monthly or annually,

RCRA regulatory status [Small Quantity

Generator (SQG)/Large Quantity

Generator(LQG)], other environmental

permits, removal technology utilized,

material disposition (municipal landfill,

laundry, incineration, etc.), etc.

2. What is the variability of solvent

amounts placed on shop towels?

3. What is the variability of solvent

remaining on shop towels immediately

after usage and after 18–24 hours? How

were shop towels stored to derive

results? What factors explain low

evaporation rates?

4. What is the variability of solvents

in usage? How often are ‘‘high risk’’

solvents used, at what percentage?

5. Does percolation occur during

storage? What factors might influence or

explain any percolation seen?

6. What removal technologies were

used in the site-visits? What are their

removal efficiencies?

7. How are shop towels managed after

usage? Open containers/closed

containers/placed on shelves, etc.

Lab results

8. What are the absorbability rates for

different types of shop towels? What

factors explain these findings?

9. What were the removal efficiencies

for different types of shop towels and

solvents? What can we conclude in

terms of variability or consistency?

What factors might explain these

results?

10. What were the evaporation rates

we found for different types of solvents

and shop towels? What factors help

explain these results?

11. What were the percolation rates

we found in our experiments? What

were the experiments we conducted?

What factors might explain results?

Risks

12. What are the relative risks to the

air, ground water and surface water for

the solvent constituents? What was the

methodology used to derive these

results?

13. Based upon the above analysis, are

there solvent constituents that deserve

further analysis to clearly determine

whether they pose little or no risk to

human health and the environment? Are

there solvent constituents that we

should clearly discourage?

XII. Regulatory Implementation

A. Upset and Bypass Provisions

A ‘‘bypass’’ is an intentional diversion

of wastestreams from any portion of a

treatment facility in an emergency

situation. An ‘‘upset’’ is an exceptional

incident in which there is unintentional

and temporary noncompliance with

technology-based permit effluent

limitations because of factors beyond

the reasonable control of the permittee.

EPA’s regulations for indirect

dischargers concerning bypasses and

upsets are set forth at 40 CFR 403.16

and 403.17.

B. Variances and Modifications

The CWA requires application of the

pretreatment standards established

pursuant to sections 304 and 307 to all

indirect dischargers. However, the

statute provides for the modification of

these national requirements in a limited

number of circumstances. Moreover, the

Agency has established administrative

mechanisms to provide an opportunity

of relief from the application of national

pretreatment standards for categories of

existing sources.

1. Fundamentally Different Factors

(FDFs) Variances

EPA may develop pretreatment

standards different from the otherwise

applicable requirements for existing

sources if an existing facility is

fundamentally different with respect to

factors considered in establishing the

standards applicable to the individual

facility. Such a modification is known

as a FDF variance. See 40 CFR 403.13.

Dischargers subject to PSNS are not

eligible for an FDF variance.

In the Water Quality Act of 1987,

Congress added new section 301(n) of

the Act to authorize modification of the

otherwise applicable BAT effluent

limitations or categorical pretreatment

standards for existing sources if a

facility is fundamentally different with

respect to the factors specified in 403

(other than costs) from those considered

by EPA in establishing the effluent

limitations or pretreatment standards.

Section 301(n), also defined the

conditions under which EPA may

establish alternative requirements.

Under section 301(n), an application for

approval of FDF variance must be based

solely on (1) information submitted

during the rulemaking raising the

factors that are fundamentally different

or (2) information the applicant did not

have the opportunity to submit. The

alternate limitation or standard must be

no less stringent than justified by the

difference and not result in markedly

more adverse non-water quality

environmental impacts than the

national limitation or standard.

EPA regulations at 40 CFR Part 403,

authorizing the Regional Administrators

to establish alternative standards,

further detail the substantive criteria

used to evaluate FDF variance requests

for existing dischargers to POTWs.

Thus, 40 CFR 403.13(d) identifies six

factors (e.g., volume of process

wastewater, age and size of a

discharger’s facility) that may be

considered in determining if a facility is

fundamentally different. The Agency

must determine whether, on the basis of

one or more of these factors, the facility

in question is fundamentally different

from the facilities and factors

considered by the EPA in developing

the nationally applicable pretreatment

standards. The regulation also lists four

other factors (e.g., infeasibility of

installation within the time allowed or

a discharger’s ability to pay) that may

not provide a basis for an FDF variance.

In addition, under 40 CFR 403.13(c)(2),

a request for limitations less stringent

than the national limitation may be

approved only if compliance with the

pretreatment standards would result in

either (a) a removal cost wholly out of

proportion to the removal cost

considered during development of the
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66211

1Under 40 CFR 403.7, a POTW is authorized to

give removal credits only under certain conditions.

These include applying for, and obtaining, approval

from the Regional Administrator (or Director of a

State NPDES program with an approved

pretreatment program), a showing of consistent

pollutant removal and an approved pretreatment

program. See 40 CFR 403.7(a)(3)(I), (ii), and (iii).

2 In the Round One sewage sludge regulation,

EPA concluded, on the basis of risk assessments,

that certain pollutants (see Appendix G to Part 403)

Continued

standards, or (b) a non-water quality

environmental impact (including energy

requirements) fundamentally more

adverse than the impact considered

during development of the standards.

The legislative history of section

301(n) underscores the necessity for the

FDF variance applicant to establish

eligibility for the variance. EPA’s

regulations at 40 CFR 403.13 are explicit

in imposing this burden upon the

applicant. The applicant must show that

the factors relating to the discharge

controlled by the applicant’s permit that

are claimed to be fundamentally

different are, in fact, fundamentally

different from those factors considered

by the EPA in establishing the

standards. While EPA encourages

facilities, or categories of facilities, that

believe they qualify for the FDF

variance to apply for it, EPA also

recognizes that the circumstances under

which it can be granted are limited to

specific statutory factors that few

applicants have satisfied.

2. Removal Credits

The CWA establishes a discretionary

program for POTWs to grant ‘‘removal

credits’’ to their indirect dischargers.

This credit in the form of a less stringent

pretreatment standard, allows an

increased concentration of a pollutant in

the flow from the indirect discharger’s

facility to the POTW. See 40 CFR 403.7.

EPA has promulgated removal credit

regulations as part of its pretreatment

regulations. In addition, currently five

of the approximately 1500 authorized

pretreatment programs have the

authority to issue removal credits.

Under EPA’s pretreatment regulations,

the availability of a removal credit for a

particular pollutant is linked to the

POTW method of using or disposing of

its sewage sludge. The regulations

provide that removal credits are only

available for certain pollutants regulated

in EPA’s 40 CFR Part 503 sewage sludge

regulations (58 FR 9386). The

pretreatment regulations at 40 CFR Part

403 provide that removal credits may be

made potentially available for the

following pollutants:

(1) If a POTW applies its sewage

sludge to the land for beneficial uses,

disposes of it on surface disposal sites

or incinerates it, removal credits may be

available, depending on which use or

disposal method is selected (so long as

the POTW complies with the

requirements in Part 503). When sewage

sludge is applied to land, removal

credits may be available for ten metals.

When sewage sludge is disposed of on

a surface disposal site, removal credits

may be available for three metals. When

the sewage sludge is incinerated,

removal credits may be available for

seven metals and for 57 organic

pollutants (40 CFR 403.7(a)(3)(iv)(A)).

For this proposed rule, removal

credits would be available for the

following pollutant parameters being

regulated under each of the criteria

discussed: (1) land application—

Copper, Lead and Zinc; (2) surface

disposal—none; (3) incineration—in

addition to Lead, removal credits would

also be available for Bis(2-Ethylhexyl)

Phthalate, Ethylbenzene,

Tetrachloroethene, and Toluene if the

requirements in 40 CFR part 403,

Appendix G.I.(1) are met.

(2) In addition, when sewage sludge is

used on land or disposed of on a surface

disposal site or incinerated, removal

credits may also be available for

additional pollutants so long as the

concentration of the pollutant in sludge

does not exceed a concentration level

established in Part 403. When sewage

sludge is applied to land, removal

credits may be available for two

additional metals and 14 organic

pollutants. When the sewage sludge is

disposed of on a surface disposal site,

removal credits may be available for

seven additional metals and 13 organic

pollutants. When the sewage sludge is

incinerated, removal credits may be

available for three other metals (40 CFR

403.7(a)(3)(iv)(B)).

Under this proposed rule, additional

pollutant parameters that would be

available for removal credits are as

follows: (1) land application—none; (2)

surface disposal—Bis(2-Ethylhexyl)

Phthalate, Copper, Lead and Zinc and

(3) incineration—Copper, and Zinc.

(3) When a POTW disposes of its

sewage sludge in a municipal solid

waste landfill (MSWLF) that meets the

criteria of 40 CFR Part 258, removal

credits may be available for any

pollutant in the POTW’s sewage sludge

(40 CFR 403.7(a)(3)(iv)(C)). Thus, given

compliance with the requirements of

EPA’s removal credit regulations,1

following promulgation of the

pretreatment standards being proposed

today, removal credits may be

authorized for any pollutant subject to

pretreatment standards if the applying

POTW disposes of its sewage sludge in

a municipal solid waste landfill that

meets the requirements of 40 CFR Part

258. If the POTW uses or disposes of its

sewage sludge by land application,

surface disposal or incineration,

removal credits may be available for the

following metal pollutants (depending

on the method of use or disposal):

Arsenic, Cadmium, Chromium, Copper,

Iron, Lead, Mercury, Molybdenum,

Nickel, Selenium and Zinc. Given

compliance with § 403.7, removal

credits may be available for the

following organic pollutants (depending

on the method of use or disposal) if the

POTW uses or disposes of its sewage

sludge: Benzene; 1,1-Dichloroethane;

1,2-Dibromoethane; Ethylbenzene;

Methylene Chloride; Toluene;

Tetrachloroethene; 1,1,1-

Trichloroethane; 1,1,2-Trichloroethane

and Trans-1,2-Dichloroethene.

Some facilities may be interested in

obtaining removal credit authorization

for other pollutants being considered for

regulation in this rulemaking for which

removal credit authorization would not

otherwise be available under Part 403.

Under Sections 307(b) and 405 of the

CWA, EPA may authorize removal

credits only when EPA determines that,

if removal credits are authorized, that

the increased discharges of a pollutant

to POTWs resulting from removal

credits will not affect POTW sewage

sludge use or disposal adversely. As

discussed in the preamble to

amendments to the Part 403 regulations

(58 FR 9382–9383), EPA has interpreted

these sections to authorize removal

credits for a pollutant only in one of two

circumstances. Removal credits may be

authorized for any categorical pollutant

(1) for which EPA has established a

numerical pollutant limit in Part 503; or

(2) which EPA has determined will not

threaten human health and the

environment when used or disposed of

in sewage sludge. The pollutants

described in paragraphs (1)–(3) above

include all those pollutants that EPA

either specifically regulated in Part 503

or evaluated for regulation and

determined would not adversely affect

sewage sludge use and disposal.

Consequently, in the case of a

pollutant for which EPA did not

perform a risk assessment in developing

its Round One sewage sludge

regulations, removal credit for

pollutants will only be available when

the Agency determines either a safe

level for the pollutant in sewage sludge

or that regulation of the pollutant is

unnecessary to protect public health

and the environment from the

reasonably anticipated adverse effects of

such a pollutant. 2
66212 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

did not pose an unreasonable risk to human health

and the environment and did not require the

establishment of sewage sludge pollutant limits. As

discussed above, so long as the concentration of

these pollutants in sewage sludge are lower than a

prescribed level, removal credits are authorized for

such pollutants.

EPA has concluded that a POTW

discharge of a particular pollutant will

not prevent sewage sludge use (or

disposal) so long as the POTW is

complying with EPA’s Part 503

regulations and so long as the POTW

demonstrates that use or disposal of

sewage sludge containing that pollutant

will not adversely affect public health

and the environment. Thus, if the

POTW meets these two conditions, a

POTW may obtain removal credit

authority for pollutants other than those

specifically regulated in the part 503

regulations. What is necessary for a

POTW to demonstrate that a pollutant

will not adversely affect public health

and the environment will depend on the

particular pollutant, the use or disposal

means employed by the POTW and the

concentration of the pollutant in the

sewage sludge. Thus, depending on the

circumstances, this effort could vary

from a complete 14-pathway risk

assessment modeling exercise to a

simple demonstration that available

scientific data show that, at the levels

observed in the sewage sludge, the

pollutant at issue is not harmful. As part

of its initiative to simplify and improve

its regulations, at the present time, EPA

is considering whether to propose

changes to its pretreatment regulations

so as to provide for case-by-case

removal credit determinations by the

POTWs’ permitting authority.

EPA has already begun the process of

evaluating several pollutants for adverse

potential to human health and the

environment when present in sewage

sludge. In November 1995, pursuant to

the terms of the consent decree in the

Gearhart case, the Agency notified the

United States District Court for the

District of Oregon that, based on the

information then available at that time,

it intended to propose only two

pollutants for regulation in the Round

Two sewage sludge regulations dioxins/

dibenzofurans (all monochloro to

octochloro congeners) and

polychlorinated biphenyls.

The Round Two sewage sludge

regulations are not scheduled for

proposal until December, 1999, and

promulgation in December 2001.

However, given the necessary factual

showing, as detailed above, EPA could

propose that removal credits should be

authorized for identified pollutants

before promulgation of the Round Two

sewage sludge regulations. However,

given the Agency’s commitment to

promulgation of effluent limitations and

guidelines under court-supervised

deadlines, it may not be possible to

complete review of removal credit

authorization requests by the time EPA

must promulgate these pretreatment

standards.

Appendix A—Abbreviations,

Acronyms, and Other Terms Used in

This Notice

Administrator—The Administrator of the

U.S. Environmental Protection Agency.

Agency—The U.S. Environmental

Protection Agency.

Annually—For purposes of the exclusion,

annually would mean per calendar year.

AWQS—Ambient Water Quality Standards

are provisions of State or Federal law that

consist of a designated use or uses for the

waters of the United States and water quality

criteria for such waters based upon such

uses. Water Quality Standards are designed

to protect health or welfare, enhance the

quality of the water and serve the purposes

of the Act (40 CFR 131.3).

BADCT—best available demonstrated

control technology, as described in section

306 of the CWA.

BAT—The best available technology

economically achievable, as described in

section 304(b)(2) of the CWA.

BMPs—Best Management Practices—As

authorized by section 304(e) and 402 of the

CWA. Gives the Administrator the authority

to publish regulations to control plant site

runoff, spillage or leaks, sludge or waste

disposal, and drainage from raw material

storage.

BCT—Best Conventional Pollutant Control

Technology, as described in section 304(b)(4)

of the CWA.

BPT—Best Practicable Control Technology

Currently Available, as described in section

304(b)(1) of the CWA.

CAA—Clean Air Act, 33 U.S.C. 7401–

7671q.

CBI—Confidential Business Information.

CEB—Chemical Emulsion Breaking.

C–E—Cost-Effectiveness Analysis

Conventional pollutants—The pollutants

identified in section 304(a)(4) of the CWA

and the regulations thereunder (BOD5, total

suspended solids, oil and grease, fecal

coliform, and pH).

Cooperative—An enterprise or organization

owned by and operated for the benefit of

those using its services. For purposes of this

rule, a laundry serving like facilities owned

by and/or operated for the benefit of those

facilities.

CP—Chemical Precipitation.

CWA—Clean Water Act. The Federal Water

Pollution Act, 33 U.S.C. 1251 et seq.

DAF—Dissolved Air Flotation.

Daily discharge—The discharge of a

pollutant measured during any calendar day

or any 24-hour period.

Direct discharger—A facility that

discharges treated or untreated pollutants

into waters of the United States.

Dry cleaning—The cleaning of fabrics

using an organic-based solvent rather than

water-based detergent solution.

EA—Economic Assessment.

EIA—Economic Impact Analysis.

Effluent—Wastewater discharges.

Effluent limitation—Any restriction,

including schedules of compliance,

established by a State or the Administrator

on quantities, rates, and concentrations of

chemical, physical, biological, and other

constituents that are discharged from point

sources into navigable waters, the waters of

the contiguous zone, or the ocean. (CWA

Sections 301(b) and 304(b)).

EPA—The U.S. Environmental Protection

Agency.

E.O.—Executive Order.

Facility—A facility is all contiguous

property owned, operated, leased or under

the control of the same person, or corporate

or business entity. The contiguous property

may be divided by public or private right-ofway.

FDF—Fundamentally Different Factor—

Section 301(n) of the CWA. This section

authorizes modification of the otherwise

applicable BAT effluent limitations or

categorical pretreatment standards for

existing sources if a facility is fundamentally

different with respect to the factors specified

at 40 CFR 403.13.

FTE—Full-time Equivalent.

HAPs—Hazardous Air Pollutants.

HEM—N-Hexane Extractable Material.

Indirect discharger—A facility that

discharges or may discharge pollutants into

a publicly owned treatment works.

IL—Industrial Laundry.

Industrial laundry facility—any facility

that launders industrial textile items from

off-site as a business activity. Either the

industrial laundry facility or the off-site

customer may own the industrial laundered

textile items. This includes textile rental

companies that perform laundering

operations.

Industrial textile items—items such as, but

are not limited to: shop towels, printer

towels/rags, furniture towels, rags, mops,

mats, rugs, tool covers, fender covers, dustcontrol items, gloves, buffing pads,

absorbents, uniforms, filters, and clean room

garments.

IRFA—Initial Regulatory Flexibility

Analysis.

IRIS—Integrated Risk Information System.

IRS—Internal Revenue Service.

Laundering—washing items with water,

including water washing following dry

cleaning.

Linen—items such as sheets, pillow cases,

blankets, bath towels and washcloths,

hospital gowns and robes, tablecloths,

napkins, tableskirts, kitchen textile items,

continuous roll towels, laboratory coats,

family laundry, executive wear, mattress

pads, incontinence pads, and diapers. This

list is intended to be an inclusive list.

LTA—Long Term Average. For purposes of

the pretreatment standards, average pollutant

levels achieved over a period of time by a

facility, subcategory, or technology option.

LTAs were used in developing the standards

in today’s proposed rule.

MACT—Maximum Achievable Control

Technology.

NTTAA—National Technology Transfer

and Advancement Act
Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules 66213

New Source—‘‘New source’’ is defined in

section 306 of the CWA and at 40 CFR 122.12

and 122.29 (b).

Non-conventional pollutants—Pollutants

that are neither conventional pollutants nor

priority pollutants listed at 40 CFR part 401.

Non-detect value—A concentration-based

measurement reported below the sample

specific detection limit that can reliably be

measured by the analytical method for the

pollutant.

Non-water quality environmental impact—

An environmental impact of a control or

treatment technology, other than to surface

waters (including energy requirements).

NPDES—The National Pollutant Discharge

Elimination System authorized under Section

402 of the CWA. NPDES requires permits for

discharge of pollutants from any point source

into waters of the United States.

NSPS—New Source Performance

Standards—Based on BADCT and apply to

all pollutants (conventional,

nonconventional, and toxic). Section 306 of

the CWA.

OC—Organics Control.

O&G—Oil and Grease.

OMB—Office of Management and Budget.

Off-Site—‘‘Off-site’’ means outside the

boundaries of a facility.

On-site—‘‘On-site’’ means within the

boundaries of a facility.

OSW—USEPA Office of Solid Waste.

POTW/POTWs—Publicly owned treatment

works, as defined at 40 CFR 403.3(o).

Pretreatment standard—A regulation that

establishes industrial wastewater effluent

quality required for discharge to a POTW.

Priority pollutants—The pollutants

designated by EPA as priority in 40 CFR part

423, Appendix A.

PSES—Pretreatment standards for existing

sources on indirect discharges, under Section

307 (b) of the CWA.

PSNS—Pretreatment standards for new

sources of indirect discharges, under Section

307(b) and (c) of the CWA.

RCRA—Resources Conservation and

Recovery Act (Pub. L. 94–580) of 1976, as

amended.

RFA—Regulatory Flexibility Act.

RREL—Risk Reduction Engineering

Laboratory.

SBA—Small Business Administration.

SBREFA—Small Business Regulatory

Enforcement Fairness Act.

SGT-HEM—Silica Gel Treated N-Hexane

Extractable Material.

SIC—Standard Industrial Classification.

Small Business—Businesses with annual

revenues less than $10.5 million. This is the

higher of the two Small Business

Administration definition of small business

for SIC codes 7218 and 7213.

TPH—Total Petroleum Hydrocarbons.

TRSA—Textile Rental Services Association

of America.

TSS—Total suspended solids.

TWF—Toxic Weighting Factor.

UMRA—Unfunded Mandates Reform Act

(PL 104–4), establishes requirements for

Federal agencies to assess the effects of their

regulatory actions on State, local and tribal

governments and the private sector.

UTSA—Uniform and Textile Service

Association.

Variability factor—The daily variability

factor is the ratio of the estimated 99th

percentile of the distribution of daily values

divided by the expected value, median or

mean, of the distribution of the daily data.

The monthly variability factor is the

estimated 95th percentile of the distribution

of the monthly averages of the data divided

by the expected value of the monthly

averages.

VOC—Volatile Organic Compound.

Water washing—The process of washing

laundry items in which water is the solvent

used.

List of Subjects in 40 CFR Part 441

Environmental protection, Industrial

laundry discharges, Water pollution

control, Waste treatment and disposal.

Dated: November 7, 1997.

Carol M. Browner,

Administrator.

For the reasons set out in the

preamble, title 40, chapter I of the Code

of Federal Regulations is proposed to be

amended by adding part 441 as follows:

PART 441—THE INDUSTRIAL

LAUNDRIES INDUSTRY POINT

SOURCE CATEGORY

General Provisions

Sec.

441.1 General definitions.

441.2 Applicability.

441.21 Pretreatment Standards for Existing

Sources (PSES).

441.22 Pretreatment Standards for New

Sources (PSNS).

Table 1 to Part 441—Pretreatment Standards

Authority: 33 U.S.C. 1311, 1314, 1316,

1317, 1318, and 1361.

General Provisions

§ 441.1 General definitions.

In addition to the definitions set forth

in 40 CFR Part 401, the following

definitions apply to this part:

(a) Dry cleaning—The cleaning of

fabrics using an organic-based solvent

rather than water-based detergent

solution.

(b) Off-site—‘‘Off-site’’ means outside

the boundaries of a facility.

(c) On-site—‘‘On-site’’ means within

the boundaries of a facility.

(d) Water washing—The process of

washing laundry items in which water

is the solvent used.

§ 441.2 Applicability.

(a) Except as stated in paragraphs (b)

through (e) of this section, the

provisions of this part apply to

wastewater discharges from industrial

laundry facilities. An industrial

laundries facility is any facility that

launders industrial textile items from

off-site as a business activity (i.e.,

launders industrial textile items for

other business entities for a fee or

through a cooperative arrangement).

Either the industrial laundry facility or

the off-site customer may own the

industrial laundered textile items. This

definition includes textile rental

companies that perform laundering

operations. Laundering means washing

with water, including water washing

following dry cleaning. Industrial textile

items include, but are not limited to

industrial: shop towels, printer towels/

rags, furniture towels, rags, mops, mats,

rugs, tool covers, fender covers, dustcontrol items, gloves, buffing pads,

absorbents, uniforms, filters and clean

room garments. If any of these items are

used by hotels, hospitals, or restaurants,

they are not industrial items.

(b) The provisions of this part do not

apply to discharges from: on-site

laundering at industrial facilities,

laundering of industrial textile items

originating from the same business

entity, and facilities that exclusively

launder linen items, denim prewash

items, new items (i.e. items directly

from textile manufacturers, not yet used

for intended purpose), any other items

that come from laundering of hotel,

hospital, or restaurant items or any

combination of these items. This part

does apply to hotel, hospital, or

restaurant laundering of industrial

textile items. In addition, the provisions

of this part do not apply to discharges

from the oil-only treatment of dust

mops. Furthermore, the provisions of

this part do not apply to laundering

exclusively through dry cleaning.

(c) By linen items EPA means: sheets,

pillow cases, blankets, bath towels and

washcloths, hospital gowns or robes,

tablecloths, napkins, tableskirts, kitchen

textile items, continuous roll towels,

laboratory coats, household laundry,

executive wear, mattress pads,

incontinence pads, and diapers. This

list is an inclusive list.

(d) For facilities covered under the

Industrial Laundry definition,

wastewater from all water washing

operations is covered, including the

washing of linen items as long as these

items do not constitute 100 percent of

the items washed.

(e) The provisions of this part do not

apply to industrial laundry facilities

that as of [the effective date of the final

rule] always launder less than one

million pounds of incoming laundry per

year and launder less than 255,000

pounds of shop and/or printer towels/

rags per year. By per year, EPA means

on a calendar year basis for the

industrial laundry facility. If any

excluded facility launders one million

pounds or more of incoming laundry

per year or 255,000 pounds or more of

shop and/or printer towels/rags per
66214 Federal Register / Vol. 62, No. 242 / Wednesday, December 17, 1997 / Proposed Rules

year, it will no longer be excluded from

the standards.

§ 441.21 Pretreatment Standards for

Existing Sources (PSES).

Pursuant to the CWA section

307(b)(1), indirect dischargers are

required to comply with pretreatment

standards for existing sources by three

years of [the effective date of the final

rule]. For purposes of this part, indirect

dischargers must comply with this part

by three years after [the date of

publication of the final rule].

§ 441.22 Pretreatment Standards for New

Sources (PSNS).

Except as provided in 40 CFR 403.7,

any new source subject to this part that

introduces pollutants into a publicly

owned treatment works must comply

with 40 CFR part 403 and achieve as

pretreatment standards for new sources

(PSNS) the same standards as those

specified in § 441.21 for existing sources

(PSES).

TABLE 1 TO PART 441—

PRETREATMENT STANDARDS

Pollutant parameter

CP—Daily

maximum

(mg/L)

Bis (2-Ethylhexyl) Phthalate ..... 0.13

Ethylbenzene ............................ 1.64

Naphthalene .............................. 0.23

Tetrachloroethene ..................... 1.71

Toluene ..................................... 2.76

m-Xylene ................................... 1.33

o&p-Xylene ............................... 0.95

Copper ...................................... 0.24

Lead .......................................... 0.27

Zinc ........................................... 0.61

SGT–HEM 1 .............................. 27.5

1 Monthly average limitation for SGT–HEM

under CP option is 15.4 mg/L.

[FR Doc. 97–30240 Filed 12–16–97; 8:45 am]

BILLING CODE 6560–50–P