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MEMORANDUM

TO: Steam Electric Rulemaking Record

FROM: TJ Finseth, ERG

DATE: 19 April 2013

SUBJECT: Discussion of Costs and Cost Savings Associated with Impoundment Operations

ERG is providing technical support to the U.S. Environmental Protection Agency’s Office of 

Water, Engineering and Analysis Division (EAD) for development of effluent limitations guidelines 

and standards (ELGs) for the Steam Electric Power Generating Point Source Category. EPA, with 

the support of ERG, developed an approach to identify combustion residual surface impoundments 

that will likely realize no change in waste inputs, receive less combustion residuals, or cease 

receiving combustion residuals based on the regulatory options considered as part of the proposed 

rule. EPA developed this approach to determine which plants are expected to incur compliance 

costs for the best management practices (BMPs) under consideration by EPA. For more 

information regarding this methodology, see the memorandum entitled, “Steam Electric Effluent 

Guidelines – Methodology for Identifying Surface Impoundment Closures Based on Regulatory

Options” (DCN SE02125). Table 1 identifies the technology options evaluated for each of the 

regulatory options considered as part of the rulemaking. This memorandum describes EPA’s

analysis of the costs and cost savings associated with changes in impoundment operations, which 

potentially include closure of impoundments that cease receiving combustion residuals.

Table 1. Steam Electric Regulatory Options

Wastestreams

Technology Basis for BAT/NSPS/PSES/PSNS

Regulatory Options

1 2 3 4 5

FGD

Wastewater

Chemical 

Precipitation

Chemical 

Precipitation +

Biological 

Treatment

Chemical 

Precipitation +

Biological 

Treatment

Chemical 

Precipitation +

Biological 

Treatment

Chemical 

Precipitation +

Evaporation

Fly Ash Transport 

Water

Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Dry handling Dry handling Dry handling

Bottom Ash 

Transport Water

Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Dry handling/

Closed loop

Dry handling/

Closed loop

Leachate Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Chemical 

Precipitation

Chemical 

Precipitation

FGMC

Wastewater

Impoundment

(Equal to BPT)

Impoundment

(Equal to BPT)

Dry handling Dry handling Dry handling
Memorandum

April 19, 2013

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Table 1. Steam Electric Regulatory Options

Wastestreams

Technology Basis for BAT/NSPS/PSES/PSNS

Regulatory Options

1 2 3 4 5

Gasification

Wastewater

Evaporation Evaporation Evaporation Evaporation Evaporation

Nonchemical Metal 

Cleaning Wastes

Chemical 

Precipitation 

(Equal to BPT)

Chemical 

Precipitation 

(Equal to BPT)

Chemical 

Precipitation 

(Equal to BPT)

Chemical 

Precipitation 

(Equal to BPT)

Chemical 

Precipitation

(Equal to BPT)

The proposed ELGs do not include requirements that will force plants to close surface 

impoundments. Therefore, there is no guarantee that plants will close the surface impoundments

that EPA is projecting will close once they cease receiving combustion residuals. Although it is 

reasonable to anticipate that would occur, due to the cost of continuing to maintain these 

impoundments and the risks and potential liability associated with spills and structural failures of 

surface impoundments containing legacy wastes. EPA’s methodology for estimating impoundment 

closures for the purpose of best management practices (BMP) costs, as described in DCN SE02125, 

assumed that impoundments will close in cases where all the combustion residual wastestreams that 

are transferred to the impoundment under baseline conditions are no longer transferred to the 

impoundment after implementation of the regulatory option. For example, an impoundment that 

receives both fly ash and bottom ash transport water is expected to close under Regulatory Option 

4, but would remain open under Regulatory Option 3. For the compliance costs that were 

developed for the proposed rule, EPA included costs associated with implementation of the BMPs 

under consideration for all impoundments that are expected to remain open. EPA did not include 

any BMP costs for impoundments that are expected to close. 

EPA did not include impoundment closure costs in the compliance cost estimates for those 

impoundments expected to close. EPA determined that it was not necessary to include 

impoundment closure costs as part of the proposed ELG compliance costs because plants will 

dewater and close these impoundments eventually, even in the absence of the proposed ELG. EPA 

made this determination because in the absence of the proposed ELG, plants will continue to 

transfer the combustion residual wastewater to the impoundment. At some point, the impoundment 

will reach its operating capacity and the plant will have to make one of the following decisions:

1) Dredge the impoundment and continue with current operations;

2) Build a new impoundment and continue with current operations; or

3) Convert to a dry ash handling system or transfer the wastewater to a tank-based 

treatment system.

For scenario 1, the plant will continue to incur occasional dredging expenses to continue operating 

the impoundment, which the plant would not have to incur if they converted to a dry ash handling

system or began transferring the wastewater to a tank-based system. EPA did not take credit for 

plants no longer incurring these occasional dredging expenses as part of the compliance cost 

estimates. For scenario 2, the plant would incur a significant expense (potentially more than once) 

to build the new impoundment(s), which the plant would not have to incur if they converted to a dry 

ash handling system or began transferring the wastewater to a tank-based system. For scenario 3, 

the plant would incur the costs that are estimated as part of the compliance costs for this proposed 
Memorandum

April 19, 2013

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rule; therefore, the proposed rule only results in these plants incurring the costs earlier than they

would have in the absence of the ELG. EPA included the full cost of these conversions in its cost 

estimates.

None of the three scenarios identified above guarantee that plants will close the impoundment. In 

fact, for scenario 1, it is likely that the plant would continue to dredge the impoundment until the 

plant retires or the impoundment reaches the end of its service life. However, EPA still expects that 

plants will eventually close these impoundments, likely at the time the plant is retired, to reduce the 

potential liability associated with impoundment failures or overflows resulting from leaving the 

impoundment open and unmanaged. EPA’s approach is supported by statements from industry

announcing impoundment closures at the time of plant retirement, such as Duke Energy’s Vice 

President of Environmental Services stating, “As older coal plants are retired, we will prepare to 

close ash basins in accordance with state regulations. This would follow a prescribed process with 

state oversight and approval.” (DCN SE02944)

In summary, EPA calculated the costs associated with the BMPs under consideration for the 

proposed ELG based on EPA’s estimation of whether the impoundment will close; however, EPA

did not include impoundment closure costs in the estimated compliance costs developed for the 

proposed ELG for the following reasons:

 The ELG does not require the closure of impoundments as part of the proposed rule;

 The installation of the technology options associated with the proposed ELG will result in 

plants not needing to incur additional expenses associated with the operation of 

impoundments, for which EPA did not take credit in the estimation of compliance costs; and

 Companies/plants anticipate closing the impoundments at the appropriate time in their 

service life (e.g., plant retirement), and therefore, expect to incur the closure costs in the 

future, regardless of the proposed rule.