MEMORANDUM 

April 10, 2015 

SUBJECT: Corrections to the Regulatory Impact Analysis for the Coal Combustion Residuals 

Final Rule 

TO: EPA Docket EPA-HQ-RCRA-2009-0640 

FROM: Cynthia Manson 

 Vadim Spirt 

 Claire Schlemme 

 Industrial Economics, Inc. 

This memorandum to the record is submitted on behalf of EPA and contains three corrections to 

the Regulatory Impact Analysis (RIA) for the Coal Combustion Residuals (CCR) Final Rule. 

 First, this memorandum corrects the duplicate exhibit lettering in Chapter 9 of the RIA. 

Prior to this correction, there are two exhibits labeled Exhibit 9-Q and two exhibits 

labeled Exhibit 9-R, but no exhibits labeled Exhibit 9-O or 9-P. 

 Additionally, this memorandum details a minor change to the release capacity factor for 

CCR surface impoundments used in the benefits estimation calculation for the CCR Final 

Rule. This memorandum discusses the rationale for this correction and provides updated 

charts and tables (including a replacement of illegible Exhibit 9-D) corresponding to the 

Executive Summary and Chapter 9 of the RIA that display updated benefits and benefitto-cost ratios (BCRs) under various discount rates. Where other exhibits in the RIA 

would change to a small degree as a result of these corrections, this memorandum also 

describes the extent of that change. 

 Finally, this memorandum provides a correction to Appendix X of the RIA. Prior to 

correction, Exhibits ES-F, B-11 and B-24 incorrectly label the units associated with 

electricity prices. This memorandum provides additional context and the corrected 

language for these exhibits. 
(1) Corrections to Chapter 9 Exhibit Lettering 

EPA inadvertently labelled the exhibits in section 9.4.4 of the RIA Exhibit 9-Q (page 9-49) and 

9-R (pg 9-50). Instead, these exhibits should be labeled Exhibit 9-O and 9-P as seen below. In 

contrast, the first two exhibits of section 9.5 are properly labeled Exhibit 9-Q and 9-R. 

 $-

 $200

 $400

 $600

 $800

 $1,000

 $1,200

 $1,400

 $1,600

 $1,800

 $2,000

2015 2025 2035 2045 2055 2065 2075 2085 2095 2105

Total Incremental Costs ($millions)

Year

Exhibit 9-O

Total Incremental Costs by Year: All Active & Inactive CCR Management Units

Original RIA Estimates (Chapters 3 and 4)

Revised Estimates (Chapter 9)

$‐

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

2015 2025 2035 2045 2055 2065 2075 2085 2095 2105

Undiscounted Benefits (Millions 2013$)

Year

Exhibit 9-P

Undiscounted Benefits by Year

Avoided Structural Failure

Avoided Groundwater Costs

Avoided Total Costs
(2) Corrections to the Release Capacity Factor for CCR Surface Impoundments 

For the benefits analysis in the RIA for the CCR Final Rule, EPA used a historical release dataset 

to calculate release rates (the frequency of releases from CCR surface impoundments) and 

capacity factors (the quantity of released CCR, on a proportion basis relative to the total storage 

capacity of a given surface impoundment). This dataset contained 39 distinct historical release 

events that were classified as “other releases” (i.e., they were non-wall breach events) from 

surface impoundments; these 39 events consists of wall seepage, overtopping, miscellaneous 

causes1

, or unknown causes. 

However, comments on this methodology indicated that seepage events are small in volume and 

do not result in substantial cleanup, NRD, or transaction costs. Subsequently, EPA removed 

seepage events from the release rate calculations but did not remove them from the capacity 

factor calculations for “other releases.” EPA did not intend to retain seepage events in the 

capacity factor calculation. This error resulted in a low estimate of 2.65 percent for the capacity 

factor for “other releases” at large impoundments in the formerly illegible Exhibit 9-D. As seen 

in Revised Exhibit 9-D on the following page, the correct capacity factor is 2.91 percent. 

The corrected average capacity factor affects the benefits calculations associated with avoided 

releases due to structural failure in the RIA for the CCR Final Rule. A slightly larger capacity 

factor entails more costly releases, and thus slightly greater benefits for avoiding these releases. 

Revised Exhibits 9-N and 9-Q on the following pages are analogous to RIA Exhibits ES-B and 

ES-C. These exhibits show updated benefits, net benefits, and BCRs (highlighted in yellow) 

after the correction is made to the underlying calculations. Note that benefits increase slightly as 

a result of this correction, as indicated above. This correction results in less than a five percent 

increase in benefits associated with the prevention of impoundment releases, and approximately 

a two percent increase in total benefits. 

A number of other exhibits in Chapter 9 would change to a small degree as a result of these 

corrections. Specifically: 

 The undiscounted year-by-year structural failure costs portrayed in Exhibit 9-P will 

decrease slightly, but this change does not affect the time trend displayed therein; 

 The annualized benefits, net benefits, and benefit-cost ratio displayed in Column C of 

Exhibit 9-R will change to reflect the analogous figures from Revised Exhibit 9-Q

(under a seven percent discount rate); and 

 The benefit displayed in Row 1 of Exhibit 9-T will increase in the Main Analysis 

column to reflect the analogous figure from Revised Exhibit 9-N, with a similar increase 

for the Sensitivity columns. 

                                                            

1

 Miscellaneous causes may refer to sink holes, stack failures, pump failures, hydraulic dredging pipe failures, liner 

perforations, internal dike breaches, seal failures, discharge structures disturbed during maintenance, and/or 

embankment sloughing. 
Revised Exhibit 9-D 

Pre-Rule Probabilities of Failure and Associated Capacity Factors at Different Types of Impou
Revised Exhibit 9-N

Expected Future Benefits for the CCR Final Rule 

(millions of 2013$)

Row Benefit Category 3% discount rate 7% discount rate

Annualized Present value Annualized Present 

value 

Monetized Benefits 

1 Reduction in CCR impoundment releases $156 $4,910 $143 $2,040

2 Reduction in CCR contamination of groundwater $12.8 $405 $9.86 $141

 Closures $1.60 $50.7 $1.46 $20.9

 Bottom liners $6.56 $207 $5.06 $72.2

 Groundwater monitoring $4.65 $147 $3.34 $47.7

3 Induced future increase in CCR beneficial uses* $117 $3,130 $79.0 $1,120

Avoided air pollution & resource consumption $32.5 $459 $21.9 $164

CCR rule “cost offset” (alternatively could be 

subtracted from row 19 of Exhibit 9-M) $84.5 $2,670 $57.1 $956 

4 Reduced incidence of cancer $0.00546 $0.173 $0.00273 $0.0390

5 Avoided IQ losses from mercury $0.279 $8.80 $0.0246 $0.351

6 Avoided IQ losses from lead $0.186 $5.87 $0.0164 $0.234

7 Reduced need for specialized education from IQ losses $0.00273 $0.0863 $0.000 $0.000

8 Non-market surface water quality benefits

$2.26 $71.4 $1.89 $27.0 

 Improved aquatic and wildlife habitat 

 Enhanced water-based recreation 

 Aesthetic improvements of surface water

 Increased non-use ecosystem value 

 Reduced risks to aquatic wildlife 

9 Protection of threatened & endangered species in 

vicinity of CCR landfills and impoundments $0.909 $28.7 $0.759 $10.8 

10 Improved air quality from reduced air pollution 

emissions from power plants $4.66 $147 $2.04 $29.1 Reduced air emissions of NOx, SO2 

 Reduced air emissions of CO2 

11 Reduced groundwater withdrawals by power plants 

(reduced water sluicing of CCR from induced 

conversions to dry CCR handling) 

$0.00273 $0.0863 $0.00273 $0.0390 

 Column Totals = $294 $8,710 $236 $3,360

Non-Monetized Benefits 

12 Financial benefit. Reduced investment risk and information asymmetry in financial markets for the electric utility industry.

13 Dread reduction benefit. Reduced fear, stress, and anxiety (i.e., hazard dread) of citizens residing near CCR impoundments.

14 Dust nuisance benefit. Reduced community nuisance from fugitive CCR dust. This is a separate benefit from the human 

health benefit from reduction in CCR dust inhalation, which is estimated in Chapter 5.

15 Non-cancer human health benefit. Reduced non-cancer health effects resulting from fish consumption. This is a separate 

benefit from the avoided cancer risks monetized in Chapter 5.

16 Cancer and non-cancer human health benefit. Reduced cancer and non-cancer health effects resulting from recreational 

water use. This is a separate benefit from the human health benefit from reduction in fish consumption, which is estimated in 

Chapter 5. 

17 Avoided sediment contamination. Reduced sediment contamination from reduced deposition of toxic pollutants.

18 Water quality benefit. Reduced water treatment costs for drinking and irrigation water.

19 Commercial fisheries benefit. Improved commercial fishing yields and harvest quality due to aquatic habitat improvements.

20 Tourism benefit. Increased participation in water-based recreation due to water quality improvements. 

21 Avoided impingement and entrainment mortality. Reduced fish impingement and entrainment mortality from CCR handling 

surface water intake. 

22 Increased property values: Improvement of aesthetic conditions of the local landscape stemming from the induced closure of 

CCR impoundments and the associated de-watering, capping, and re-vegetation requirement of the CCR final rule.

Notes: 

* The beneficial use benefit in this RIA consists of two components. The sub-rows below display an approximate breakdown of the relative 

contribution to the total beneficial use benefit across these two components, cognizant of the downscaling factor applied to these benefits in 

this chapter, as described in Section 9.2.4. 

Figures are rounded to three significant digits; totals may not add due to rounding.
Revised Exhibit 9-Q 

Incremental Costs and Benefits: Alternate Discount Rates 

(millions of 2013$) 

 3% Discount Rate 7% Discount Rate 

Present values: 

Costs $23,200 $7,260 

Benefits $8,710 $3,360 

Net Benefits ($14,490) ($3,900) 

Benefit Cost Ratio (BCR) 0.38 0.46 

Annualized: 

Costs $735 $509 

Benefits $294 $236 

Net Benefits ($441) ($273) 

Benefit Cost Ratio (BCR) 0.40 0.46 

Figures rounded to three significant digits. Totals may not sum due to rounding. 

Note that this memorandum does not address any changes resulting from this correction to 

exhibits in Chapters 1 through 8 of the RIA, as the analyses and costs/benefits displayed in these 

chapters are superseded by the analyses and figures in Chapter 9, as noted throughout the RIA. 

Lastly, Exhibit ES-F (p. X-10), Exhibit B-16 (p. X-36), and Exhibit B-17 (p. X-37) in 

Appendix X of the RIA would also have minor changes as a result of this correction. Given the 

increase in total benefits estimated in Appendix X, the overall impact of this correction is to 

increase the total benefits in Appendix X by approximately 1.5 percent. The changes in Row 1 of 

Exhibit B-16 are analogous to those shown in Revised Exhibit 9-N above. 

(3) Corrections to Electricity Price Labeling in Appendix X of CCR Final Rule RIA 

Exhibits B-11 and B-24 of Appendix X to the RIA for the CCR Final Rule contain projected 

electricity prices throughout the United States from 2020 through 2030 across National Energy 

Modeling System (NEMS) regions. Both of these exhibits are labeled as though the data 

displayed within are in cents per kilowatt-hour (kWh). However, this description is mislabeled; 

in reality the data in these exhibits are in mills per kWh, where a “mill” refers to one onethousandth of a dollar, or, alternately, a tenth of a cent. Correspondingly, a mill is an order of 

magnitude smaller than a cent. 

Exhibits B-11 and B-24 of Appendix X should instead read that they display electricity prices in 

mills per kWh, rather than cents per kWh. Alternately, if expressing electricity prices in cents per 

kWh is desired, the values in these exhibits can simply be reduced by a factor of ten (i.e., moving 

the decimal place one digit over to the left).