United States Office of Water Environmental Protection Washington, DC 20460 September 2015 Agency



# Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category: EPA’s Response to Public Comments

Part 9 of 10Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 1 28.a. Econ

– Plants/owners profile

Commenter Name: Winslow Sargeant Commenter Affiliation: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 5 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The agency certifies that this proposal will not have a significant economic impact on a substantial number of small entities. 8 EPA produced a certification analysis that showed surprisingly few plants with costs owned by small entities. The same analysis showed some significant costs for a large fraction of plants owned by muni cipalities and rural electric cooperatives of unknown size. 9 Given the hundreds of small entity owners that could be affected, small entity trade associations also concluded that the number of plants with costs owned by small entities was too low. 10

8 78 Fed. Reg. 34432, 34530 (June 7, 2013).

9 As discussed below, EPA failed to identify the affected plants, and in turn, which affected plants with costs had small entity owners, preventing us from commenting effectively on the validity of EPA’s determina tions. 10 Personal communication with Dorothy Kellogg, NRECA and Theresa Pugh, APPA, July 19, 2013.
Comment Response:
As explained in preamble Section XVII.C, the final rule will not have a significant economic impact on a substantial number of small e ntities. EPA cannot respond to the commenter’s statement that the analysis for the proposed rule “showed surprisingly few plants with costs owned by small entities” because the statement is too generalized, and the commenter offers no explanation of what c onstitutes “surprisingly few plants.”
In Chapter 8 of the RIA document, EPA described how it identified parent entities, determined which entities are small, and estimated impacts to small entities under the final rule, following EPA and SBA guidance. EPA’ s analysis of the final rule uses the same methodology and data as were used in the propos ed rulemaking , but with revised SBA size standards effective July 14, 2014.
EPA cannot publicly provide information for, or identification of, individual steam electr ic power plants and owning entities projected to incur compliance costs under the final rule, as this information was obtained directly or derived from the steam electric industry survey and aEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 2 significant number of respondents identified the data as confid ential business information, which EPA has a regulatory responsibility to protect (see 40 CFR Part 2, Subpart B). See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 23 (in comment code 28.e) regarding disclosure of plant

- level data.

EPA did, h owever, present detailed information in the RIA that makes it possible to review and understand EPA’s methodology, as well as aggregated data for the industry by entity type and ownership category, to support its finding that the rule will not have a signi ficant economic impact on a substantial number of small entities.
As described in Chapter 8 of the RIA, most of the 110 to 191 small entities owning steam electric power plants are projected to incur no costs under the final rule. EPA estimated that six

sm all entities incur costs at or above the 1 percent cost

- to

- revenue threshold, and for one of these small entities the costs are at or above 3 percent (see Table 8

- 4 in the RIA).

Commenter Name: Theresa Pugh Commenter Affiliation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 108 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

APPA notes that EPA also asserts that the rulem aking only affects eight electric utilities that generate less than 100 MW. APPA does not know how EPA came to this conclusion
Comment Response:
EPA disagrees with the commenter that the Agency asserted that the rule “only affects eight electric utilitie s that generate less than 100 MW” because, for either the proposed or final rule, EPA did not estimate impacts using a size threshold at a parent level or a plant level. Rather, EPA estimated impacts using certain size thresholds at a generating unit leve l. It is not clear what data the commenter is referencing, and thus EPA cannot offer any further explanation.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 3 28.b. Econ

– Total costs and economic impact analyses assumptions

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 8 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 By the EPA's own admission in section 4.2.3 of the Regulatory Impact Analysis, the analysis of plant

- level impacts is subject to uncertainties and limitations, including plant

revenue values differing from those estimated using earlier databases and deviations from

a zero

- cost pass

- through assumpt ion. Plant

- level impacts could exceed or be less than those projected in the analysis; there is no way of telling.
Comment Response:
EPA acknowledges the commenter’s statements about uncertainties and limitations in the analysis of plant

- level impacts, but maintains that the analyses EPA conducted are appropriate to produce informed regulatory results. While cost and economic impact analyses conducted in support of the Steam Electric ELGs embed some uncertainty and limitations (which EPA has tried to ide ntify to promote transparency), the Agency used the best information available to support the analyses, reduced the uncertainty where possible with additional data collection, and where uncertainty remains, provided conservative estimates or ranges of valu es to inform policy decisions. For example, EPA’s assumption of zero

- cost pass

- through represents a conservative estimate of the impact of compliance costs from the perspective of the regulated facilities; when looking at the impacts from the perspective o f the electricity consumers, EPA reversed the assumption to assume, again conservatively, a 100 percent cost pass

- through.

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 The EPA claims high benefits and low costs, but it has not carried out a complete benefit

cos t analysis. Since benefits and costs may easily be higher or lower than the estimates, the EPA has not really calculated anything and cannot really claim anything other than an unquantified statement that the proposals are a good thing.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 4 Comment Response:

Pursuant to Executive Order, EPA conducted a benefit

- cost analysis, in which EPA compared total and incremental costs to total and incremental benefits; the results of this analysis are presented in Chapter 13 of the BCA. While both benefits and costs val ues are subject to uncertainties (as EPA has tried to be transparent about by providing information on uncertainties and limitations where possible), they are based on the best information available to EPA, and EPA considered any specific suggestions for r educing uncertainty provided by commenters. As such, EPA’s analysis is appropriate to produce an informed regulatory result.

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- H Q

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
This is an important area of environmental concern. The regulations were last updated in 1982 and the EPA claims that they no longer provide adequate control of wastewater discharges, although it does not really support that claim beyond general references to health concerns and observations of water deterioration in bodies, such as the Chesapeake Bay. The rulemaking needs to have a firmer basis in economic analysis and be less reliant on a whole series of assumptions that are built one upon another. Better analysis is needed to show whether there is a systemic problem to be addressed in the first place . This rulemaking is at a proposal stage, and we can only hope that public discussion between now and 2014 will encourage the EPA to under take a more detailed analysis of the benefits of its proposals and consider a wider variety of alternatives.

Comment Response:

The commenter states that the steam electric ELGs need to have a “firmer basis in economic analysis” and “better analysis,” but the commenter does not offer any specific comments with respect to how EPA’s analyses for the rule could be improve d.
With respect to the commenter’s statements that the rule is based on “a whole series of assumptions,” see the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1, Excerpt Number 8.
EPA’s disagrees with the commenter’s statement that EPA has not demonstrated the environmental need for the rule. The Agency described in the preamble and further detailed in supporting documents (e.g., TDD and EA Report ), the rationale for the regulation, changes in the characteristics of discharges from the steam electric industry, and demonstrated environmental impacts of these discharges. The Environmental Assessment describes the impacts associatedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 5 with pollutant loadings reductions under the final rule, and the benefits analysis (contained in the Benefit

- Cost Analysis (BCA) docum ent) further describes, in quantified and monetized terms where possible, the benefits associated with the final rule.
Regarding the commenter’s statement that EPA should “undertake a more detailed analysis of benefits,” the commenter offers no specific su ggestions of how EPA’s benefits analysis could be improved. EPA disagrees that the benefits analysis is not detailed enough. EPA conducted a benefits analysis of the proposed rule pursuant to Executive Order. Chapter 2 of the BCA provides an overview of th e benefits of the final rule, and each benefits category is described in more detail in subsequent chapters of the BCA. Moreover, EPA considered public comments it received on the benefits analysis for proposed rule, and subsequently made several improveme nts in its benefits analysis for the final rule. For more details on updates to the benefits analyses, see Appendix A of the BCA for the final rule. As a result, the final rule does contain a more detailed analysis of the benefits of the ELGs, consistent w ith the commenter’s request. EPA also notes that, as required by the Clean Water At, the final rule reflects technologies that are available, economically achievable and have acceptable non

- water quality impacts. See Section VIII of the preamble to the fin al rule for the rationale underlying EPA’s decisions on the final rule.
Regarding the commenter’s statement that EPA should “consider a wider variety of alternatives,” EPA notes that its proposal for the final rule described at least eight different regula tory options under consideration, providing extensive details on each of the wastestreams to be addressed under the options, as well as the treatment technologies for controlling the discharge of pollutants under the options.

Commenter Name: R. W. Green e Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 14 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 More generally, costs are estimated by extrapolation from known data, which is questionable because it implies linear relationships when these may not be appropriate,
Comment Response:
It is not clear what specific cost data the commenter is referrin g to in their statement. EPA uses several different analyses to inform the regulatory development process, relying on available information as the basis for key values. EPA determined compliance costs based on facility

specific information. See the TDD for details. The commenter is correct that some of the economic analyses rely on known data (such as data about electricity sales) to infer future valuesEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 6 based on historical trends, but EPA disagrees that using extrapolation from known data means that the ana lysis is not appropriate. In the absence of evidence suggesting otherwise, known data is the most appropriate and least speculative basis for decisions.

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 17 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 The EPA has made many spurious, rule

- of

- thumb type assumptions in a nalyzing this proposal and gives the impression that it would have found a basis for proceeding with tighter regulation regardless of the underlying economics. The approach seems to reflect a common administra tive view that quantification, however spuri ous, is a valuable exercise.
Comment Response:
EPA disagrees that the Agency “made many spurious, rule

- of

- thumb type assumptions” in its analyses of the steam electric ELGs and that EPA’s “quantification” was also “spurious.” The commenter offer no speci fic examples here of an assumption or quantification that it views as “spurious.” Nonetheless, EPA notes that, while cost and economic impact analyses conducted in support of the ELGs embed some uncertainty, in EPA’s view, the undertaken analyses are appr opriate to produce informed regulatory results. The Agency necessarily made assumptions to conduct the analyses when data were not available or for projecting future conditions (e.g., future electricity market). EPA detailed these assumptions and discussed their implications on the insight drawn from the results in the RIA and BCA. The Agency used the best information available to support the analyses, including data provided by steam electric power plants in response to the industry survey. Where uncertain ty remained, EPA used conservative estimates or ranges of values that provide insight on the magnitude or direction of the effects of the regulation. For example, EPA’s assumption of zero

- cost pass

- through represents a conservative, worst

- case estimate of the impact of compliance costs from the perspective of the regulated facilities; whereas when looking at the impacts from the perspective of the electricity consumers, EPA reversed the assumption to assume, again conservatively, a worst

- case scenario of 10 0 percent cost pass

- through. Results of these analyses, which represent worst

- case conditions from either perspective, provide bounding cases to understand the impacts of the ELGs and inform decisions.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 7 Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
By contrast, EPA found that the vast majority of power plants will be able to meet even the strongest of the rule's requirements by spending less than 1 percent of their annual revenue and with minimal impact on electricity rates or grid reliability. No matter how you slice the

num bers, there is no doubt that the rule will greatly benefit the country with costs that can be reasonably born by the industry.
Comment Response:
The preamble describes in detail the requirements of the final rule and EPA’s rationale for selecting the opt ions that it did for the final rule. As discussed in the RIA and BCA, EPA agrees with the commenter that the final rule will have a minimal impact on electricity rates or grid reliability, and that the final rule is affordable for the industry as a whole.

Commenter Name: John McManus Commenter Affiliation: American Electric Power System (AEP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1 Comment Excerpt Number: 67 External Review Flag: No External Review External Review Incorporated into Respon se: No
Comment Excerpt:
1. In some cases, annualization and cost recovery periods shorter than 15 years need to be accounted for in the proposed rule.
As has been mentioned earlier, the time period assumed for cost recovery is a primary consideration whe n the cost effectiveness of any new technology installation is evaluated. EPA assumes that costs are annualized over a 20

- year period, but has previously used a 15

- year period to develop ELGs for other industry categories. But in some cases, even a 15

- yea r service life assumption is not appropriate. This is the case with Public Service Company of Oklahoma’s (PSO’s) Northeastern Plant where a coal

- fired unit is planned to be retired by 2026, providing a significantly shorter time period for cost annualiza tion. Based on EPA’s preferred option and an expected ELG compliance date of 12/12/2021 for this unit (first permit renewal after July 1, 2017), the bottom ash transport system would need to be converted to a “dry” system and be operational by the complia nce date. After the completion of the retrofit, the plant will onlyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 8 operate for an additional 5 years before being retired. Using the cost effectiveness information estimated for two AEP dry bottom ash conversions as examples (Table 10), the effects of the shortened cost recovery period can be illustrated.
The direct costs in 2010 dollars to retrofit dry bottom ash systems at these two facilities were provided earlier (Table 5). These costs were converted to 1981 dollars and annualized over a 20

- year period at 7% in order to calculate $/TWPE values for both plants (Table 6). Use of a shorter cost recovery period has a significant effect on the cost effectiveness of dry bottom ash conversions. Using a 15

- year annualization period for Plant 1 increases the $/T WPE by over 16%, from $16,007 to $18,639 per TWPE removed (Table 10). Using a 5

- year cost recovery period, the $/TWPE values increases by almost 160%, further devaluing an already not

- cost

effective technology retrofit (Table 10).
This analysis illustrate s that not only is the dry bottom ash conversion not cost effective for any plant at any cost recovery period, but that some provision needs to be included in the proposed ELG rule that accounts for plants that will be retired prior to a 20

- year cost annua lization period.] If the new ELGs are adopted as proposed, the PSO Northeastern Plant must install a dry bottom ash conversion by December 12, 2021, but due to an agreement among

stakeholders regarding its air pollution control requirements, the plant mu st be retired by 2026, providing only five years to recover the cost of the dry bottom ash conversion from the customers that receive service during the period of ELG compliance.

Some minimal cost

- recovery period must be used to estimate the cost effective ness of the proposed technology revisions and in cases where that cost annualization period is not available, the cost effectiveness needs to be reassessed.
Comment Response:

The commenter states that “ EPA assumes that costs are annualized over a 20

- year period, but has previously used a 15

- year period to develop ELGs for other industry categories” and that EPA’s choice of annualization period is “inappropriate.” EPA disagrees with these comments. For

an alysis of technology capital costs on an annualized basis, or when performing other cost and impact analyses that account for the service life of the installed equipment (e.g., electricity rate impact analysis), the number of years reflect the reasonably e xpected service life of the equipment. Using a number of years that is longer than the service life would understate costs onEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 9 an annual equivalent basis, while using a number of years that is less than the service life would overstate costs on annual equiv alent basis. As described in the RIA and TDD, EPA based its estimate of service life of equipment that may be installed to meet the ELGs on a review of reported performance characteristics of compliance technology components. From this review, EPA conclude d that the equipment could reasonably be expected to operate for 20 years or more, and thus further concluded that 20 years is an appropriate basis for cost and economic impact analyses that account for the estimated operating life of compliance technology . EPA notes that the 20

- year service life is longer than the service life used in some CWA regulatory analyses, while shorter than the life used in other analyses (for example, the service life was 10 years for compliance equipment analyzed for the Concent rated Animal Feeding Operations ELGs, 15 years for analyses of the Metal Products and Machinery and Pharmaceutical Manufacturing ELGs, and 30 years for certain compliance equipment for the CWIS final rule). The differences are based on the type of equipmen t and expected service lives. Note that for each system for which the Agency estimated costs, EPA evaluated whether equipment would have a shorter life than 20 years and would need to be purchased more frequently; the Agency accounted for this shorter life by including recurring costs for equipment replaced within the 20

- year period. In summary, in its CWA regulatory analyses, EPA used realistic estimates of service life for the equipment expected to be used in complying with regulatory requirements.

The co mmenter further states that, based on its calculations for a particular plant whose planned retirement is 2026, “use of a shorter cost recovery period has a significant effect on the cost effectiveness of dry bottom ash conversions.” EPA understands that s ome plants may retire earlier than 20 years after the limitations are incorporated into their permits, and that if EPA calculated cost

- effectiveness using a shorter technology service life, the cost

- effectiveness values would be higher ($/TWPE) than using a uniform 20

- year period. However, EPA’s decisions on the final rule are based on the factors discussed in Section VIII of the preamble. The Agency did not base its decisions on the final rule on its cost

- effectiveness findings. Thus, even if EPA recalcula ted cost

- effectiveness with shorter technology

- use periods and found higher (i.e., less favorable) cost

- effectiveness values, these different results w ould not affect EPA’s decisions for the final rule since, as mentioned above, cost

- effectiveness is not a determining factor in EPA’s ELG decision making. For the role of cost

- effectiveness in EPA’s decisions for the final rule , see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h. For the same reason, EPA disagrees with the com menter that the final rule should contain “some provision ... that accounts for plants that will be retired prior to a 20

- year cost annualization period.” For the reasons explained in the preamble, EPA determined that the final rule is economically achievabl e for the industry as a whole. Nonetheless, EPA notes that the analyses for the final rule take into account generating units and plants that are expected to retire prior to the implementation dates in the final rule (which extend to December 31, 2023), an d that the final rule provides some flexibility to permitting authorities in determining when plants must meet the final limitations (see preamble Sections VIII.C.7 and XVI.A.1).
Finally, the commenter states that its analysis “illustrates that ... dry bot tom ash conversion [is] not cost effective for any plant at any cost recovery period.” EPA disagrees that the technology basis for the control of pollutants in discharges of bottom ash transport water in the final rule is not cost

- effective. The commenter presents no substantive basis for this sweeping conclusion. As discussed in Section XV of the preamble and in Appendix F of the RIA document, EPAEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 10 calculated the cost effectiveness for the final ELGs and found the cost

- effectiveness ratio of the BAT require ments ($134/lb

- eq (in 1981 dollars)) to be within the range of cost

- effectiveness ratios for BAT requirements in other industries.

Commenter Name: John McManus Commenter Affiliation: American Electric Power System (AEP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1 Comment Excerpt Number: 70 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

3. Economic Impact and Social Cost Analysis
EPA’s annualization of the compliance costs is mi sleading in that: 1) it characterizes costs as affordable; and 2) neglects to consider the impacts to companies for financing in a capital intensive industry. EPA assumes that the cost of these retrofits will be annualized over a 20

- year period, but this position inherently assumes that all of the affected facilities from this rule will operate over that entire timeframe. Given the current environmental regulatory climate, older and less efficient facilities that dispatch less frequently, but provide some economic benefit, will be adversely affected through these guidelines and future rule promulgations, such as with proposed CCR and 316(b) rules, as well as the anticipated Greenhouse Gas Standards for existing sources. Though the proposed ELG rule may not make these units uneconomic to generate electricity over a short term by itself, the cumulative effect of the ELG in combination of other regulations may push these units into an accelerated retirement. Many of the affected facilities will not have 20

- yea r lifespans or service lives, but will still have to shoulder the financial burden to comply with these rules in the short term. The EPA’s analysis is not sufficiently refined to properly account for these shortened facility service life periods.

For examp le, such a scenario where a shortened service life is evident when considering the EPA Settlement Agreement that remedies the dispute with the Regional Haze Rule state implementation plan entered in Oklahoma. In the Settlement Agreement AEP and EPA agreed that one of the coal

- fired units of the Northeastern Station will retire in 2016, while the other unit will operate through 2026. The remaining operating unit will have to meet compliance with the ELG, as well as CCR, and these costs cannot be annualized over twenty years because the remaining plant life ends in 2026. Any costs that aren’t fully amortized will need depreciation adjustment to align with plant retirement dates, elevating the annualized cost impact of the rule. Aligning cost recovery with c ustomers who receive the benefits of service is vitally important for regulatory commissions in order to not unfairly burden future customers with costs for which they do not receive any service benefit.

Further, the EPA assessment of estimated costs for c ompliance neglects to consider the capital requirements of utility’s to install control technologies over a short compliance period of a fewEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 11 years. As stated above, the AEP estimated costs could potentially approach $4 billion. To contrast, AEP’s near

- te rm capital forecast is $3+ billion per year, but these expenditures encompass all business segments including transmission and distribution, in addition to generation. Expenditures to comply with the ELG will directly follow the current large expenditures within AEP’s capital budget to comply with the Mercury and Air Toxics Standard by the 2015

- 2016 timeframe.

[

... ]

4. Cost

- to

- Revenue Screening Analysis
The assessment of the economic impacts of the rule per EPA methodology does not provide a reasonabl e presentation of the full impact on existing individual facilities and their parent entities incurring compliance costs in the cost

- to

- revenue basis screening

- level economic assessment. Given AEP’s estimated capital compliance cost for its facilities are roughly 40% of EPA’s estimated capital compliance costs for the entire industry, it can be reasonably ascertained that there would be a significant increase in the number of individual steam electric plants flagged by the cost

- to

- revenue screening analysi s and parent entities that would incur costs of greater than 3% of revenues. According to EPA, exceeding this threshold is an indicator of potential financial distress to the facilities and entities; therefore, EPA’s analysis paints a rosy picture of littl e financial impact to utilities when the costs of this rule could cause financial distress and burden utility customers for the foreseeable future.
Further, a substantial number of public utilities and parent entities are vertically integrated businesses, comprised of various business segments including transmission, distribution, and retail services in addition to generation services and electric generating facilities to which this rule targets. Other parent entities operate in other industries where elec tric generation may or may not be their business focus. Neglecting to consider the vertically integrated construct artificially minimizes the impact of the ELG compliance costs to the specific business segments of parent entities, and unduly penalizes othe r facets of the business. It also artificially minimizes the impact of this rule on a specific business segment, when the generation portion could be a small, but vital piece of the overall business construct.
Additionally, EPA wrongly claims that the scre ening analysis makes a “counterfactual, conservative assumption of zero cost pass

- through to customers.” 48 While this position is less than conservative considering that recovery for environmental investment for utilities i n regulatory proceedings is highly probable, it fundamentally neglects the consideration of downstream effects to customers that will inevitably result in higher electricity prices in a downtrodden economy and demonstrates that EPA further underestimates t he real societal impact associated with this rule. Regulated entities are entitled to a fair return on their investment, and such a return will be borne by, and burden, customers in a much higher degree than EPA’s analysis describes. Such costs that are not considered in EPA’s cost

- effective analysis underestimate the expected actual mitigation cost that will be charged to utility customers in any modeling considerations. Absent regulatory treatment, merchant customers will still bear the burden of this r ule manifesting in higher electricity prices to cover the exorbitant costs associated with implementing these proposed guidelines.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 12 [...]

6. Summary of Economic Impacts for Existing Sources
The economic impact of the ELG rulemaking should not be compar ed on a cost

- to

- revenue basis as this metric is meaningless and misleading in that it compares the cost for compliance for a single business unit to the total revenue for the entire company. Thus it is not surprising that the results of EPA’s economic imp acts are negligible versus comparing the cost of compliance to the revenue of the generation business unit of a utility. While more appropriate than EPA’s approach, even this comparison could be improved as it does not reflect the true impact on a company ’s owners

– i.e. its shareholders. To do so requires calculating the impact on a company’s earnings on a $/share basis.

48 Table XI

- 3, 78 Fed. Reg. at 34494.
Comment Response:
Response to comments regarding "Economic Impact and Social Cost Analysis"
The commenter makes several arguments: (1) EPA’s annualization assumptions understate the annual equivalent cost burden of capital and other one

- time outlays for some facilities, and thus may lead to an incorrect assessment of the affordability of complian ce costs for those facilities; (2) EPA has not considered the financing burden of compliance capital outlays, particularly in the context of the electric power industry’s broader set of near

- term capital requirements; (3) EPA has not properly accounted for the impact of several environmental regulations imposing costs in a short period on the economic/financial viability of generating units; impacts may be consequential when viewed in this context. EPA addresses each argument below.

EPA’s annualization assu mptions understate the annual equivalent cost burden of capital and other one

- time outlays for some facilities, and may lead to an incorrect assessment of the affordability of compliance costs for those facilities

EPA understands the commenter’s statement that using a longer annualization period than the expected remaining useful life of the generating unit will understate the annual equivalent cost burden of capital and other one

- time outlays for the compliance technology. The commenter is specifically con cerned about instances in which the remaining operating life of a plant or specific generating units is less than the estimated service life of the compliance technology. In such instances, the calculated annual equivalent cost will be lower when using the estimated 20

- year service life than would be estimated if a shorter remaining operating life were used as the basis for annualization. However, this effect, which is a simple artifact of annualization math, does not mean that a given technology is not gen erally economically achievable or affordable within the CWA’s economic achievability criteria for effluent guidelines regulations. EPA based its determination of best available technology economically achievable on broader criteria than the impact of techn ology installation at individual selected facilities. Overall, EPA concludes that theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 13 technology basis for the final rule constitutes best available technology economically achievable for the industry as a whole. As described in the preamble to the final r ule, EPA reached this determination in part based on an analysis of the impacts of the final rule using the Integrated Planning Model (IPM), a comprehensive electricity market optimization model that assesses economic/financial impacts within the context o f regional and national electricity markets. This analysis, which is documented in the RIA report, found minimal impact on the steam electric power industry from the final rule, both nationally and regionally, in terms of accelerated retirement of electric generating capacity. The analysis also shows minimal impact on electricity production costs and prices, and other measures of economic impact (see Chapter 5 in RIA for details).
EPA further understands that some generating facilities operating under rate regulation may need to recover capital outlays in fewer years than the estimated technology service life, which would lead to higher electricity rate increases than calculated using the 20

- year technology life. This impact, if it occurs, would unfold in t he broader electricity generation market, with many generating units incurring little or no cost as a result of the final rule, and for those generating units more affected by the rule, most are expected to be able to operate the compliance technology for the full estimated service life (very few retirements expected as a direct result of the final rule). Again, a key overall finding from the IPM analysis, which bears specifically on this point, is that electricity production costs and prices are expected t o increase by no more than 0.8 percent in any electricity market region as a result of the final rule (see Table 5

- 1 in RIA document). EPA finds this extent of production cost and price increase minimal within the electricity customer community.

EPA has no t considered the financing burden of compliance capital outlays, particularly in the context of the electric power industry’s broader set of near

- term capital requirements
EPA understands the commenter’s arguments concerning the near

- term financing burden for installing technology to comply with the Steam Electric ELGs. However, EPA’s analysis, as documented in the RIA for the final rule, indicates the financing burden associated with the final rule’s requirements to be comparatively modest for virtually al l organizations

– both private companies and other entities

– expected to incur costs under the final rule (See Chapter 4 in RIA document).
In terms of considering the impact of the final rule on capital requirements in the context of the electric power in dustry’s broader near

- term capital needs, EPA first notes that this consideration is not necessary for a finding of economic achievability under the CWA. Under the CWA, ELGs based on BAT must be economic achievability for the industry as a whole, which EPA has demonstrated as described in the preamble and RIA. Nevertheless, given the overall small financing burden from the Steam Electric rule’s compliance outlays, EPA does not view the Steam Electric ELGs as imposing an undue burden on the overall electric power industry even in the context of the industry’s near

- term capital needs

. EPA has not properly accounted for the impact of the Steam Electric and other environmental regulations imposing costs in a short period, on the economic/financial viability of g enerating units. Impacts may be consequential when viewed in this context.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 14 The commenter expresses concern that “older and less efficient facilities that dispatch less frequently, but provide some economic benefit” will be adversely affected by the final r ule and other environmental regulations requiring compliance expenditures at approximately the same time as the Steam Electric ELGs. The commenter acknowledges that the ELGs, themselves, are not likely to render these generating units unviable, but goes on to argue that the “the cumulative effect of the ELG in combination of other regulations may push these units into an accelerated retirement.”
EPA agrees that the Steam Electric regulation, by itself, is unlikely to make electricity generation from steam e lectric generating units uneconomical, but recognizes that other regulations or a combination of factors may affect a plant owner’s decision of whether to continue operating a given generating unit.
The commenter noted the importance of evaluating the impa ct of the final Steam Electric ELGs in the context of multiple environmental regulations affecting the electric power industry, and of recognizing the potential for adverse impact due to compressed and overlapping compliance periods from multiple regulatio ns. EPA generally agrees, and it did account for the potential cumulative impact that multiple environmental regulations may have on the electric power industry in analyzing the impacts of the ELGs. As described above and as documented in Chapter 5 of the RIA report, EPA used IPM to assess the effect of the final rule in the context of regional and national electricity markets, accounting for the costs and market

- level effects of additional environmental regulations (e.g., MATS, CWIS, CCR) requiring complia nce outlays at about the same time as the Steam Electric rule. EPA also included the impacts of the Clean Power Plan regulation, which limits GHG emissions from existing electric generating units.
As described in Chapter 5 of the final Environmental Assess ment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) , EPA found that the ELGs are expected to have a minimal impact on steam electric generating unit capacity ret irements, in the order of 0.1 percent of national electric generating capacity and no more than 0.3 percent of generating capacity in any electricity market region. Specifically, the final rule will lead to incremental capacity retirement of 8 electricity generating units representing for 1,416 MW of capacity. These retirements are offset by 574 MW of avoided retirement of capacity otherwise projected to retire by 2030, for a net change in 2 generating units and 843 MW (see Table 5

- 3 in RIA document). The r etirements involve older, less efficient generating units with very low capacity utilization rates. EPA assesses that these very small accelerated retirements are not consequential relative to total national and regional generating capacity.

Response to c omments regarding "Cost

- to

- Revenue Screening Analysis"

The commenter raises three main concerns, addressed in turn below.
First, regarding the commenter’s assertion that EPA does not provide a reasonable presentation of the full impact on existing individu al facilities and their parent entities in the cost

- to

- revenue basis screening

- level economic assessment, EPA used data available about each plant (including detailed responses by plant operators to the industry survey) to determine the technology changesEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 15 that are expected to meet the ELGs and to estimate the costs of those changes. EPA made several changes to the analysis in response to comments regarding individual plants or technologies and has updated the technology costs accordingly (see the TDD). The commenter does not raise specific concerns about the methodology used to aggregate these costs to the level of the plants and their owners, and EPA used the same methodology to estimate cost

- to

- revenue ratios for the final rule.
Second, regarding the conce rn that EPA neglected to consider the vertically integrated structure of affected businesses, for parent

- entity cost

- to

- revenue and Regulatory Flexibility Act (RFA) analyses, EPA determined the highest level domestic parent entity for each surveyed steam

e lectric power plant and conducted these analyses at the level of that entity. This approach is consistent with EPA economic analysis guidance. As discussed in Chapter 4 of the RIA report, the primary focus of operations of some of these entities is not ele ctric power generation. EPA conducted the same cost

- to

- revenue and RFA analyses for each identified parent entity regardless of primary focus of its operations. To the extent that this entity is at the top of domestic

- ownership pyramid, its revenue include s revenue from all operations it owns. EPA does not have enough information to assess how these regulatory effects are passed through the ownership pyramid and to what extent each business segment is affected. The cost

- to

- revenue and RFA analyses both assu me that the entities do not pass through the compliance costs to customers and therefore the analyses represent a worst case from the perspective of the entities that own the plants.
Third, regarding the commenter’s assertion that the Agency understated im pacts to electricity consumers, EPA disagrees. The assertion seems to reflect a misunderstanding of EPA’s assumptions regarding cost pass

- through in different analyses. As mentioned above, and discussed in Chapters 4 and 8 of the RIA report, for these anal yses, EPA assumed that steam electric generating units owned by these entities will not be able to pass any of their compliance costs to their electricity consumers (zero cost

- pass

- through). This assumption is used for analytic convenience and provides a w orst

- case scenario of regulatory impacts to steam electric power plants, from the perspective of the plants. Even though the majority of steam electric power plants may be able to pass increases in production costs to consumers through increased electricit y prices, it is difficult to determine exactly which plants would be able to do so. Consequently, EPA judges that assuming zero cost pass

- through is appropriate as a screening

level, upper bound estimate of the potential cost impact of the ELGs to steam el ectric power plants and their parent entities. To the extent that some steam electric power plants are able to recover some of the increased production costs in increased prices, this analysis overstates plant

level impacts.
As discussed in Chapter 7 of th e RIA report, to assess the impact of the ELGs on electricity consumers, EPA reversed the assumption used in estimating impacts on entities that own steam electric power plants and instead assumed that steam electric power plants will be able to pass 100 p ercent of compliance costs onto their consumers. The 100

- percent cost

- pass

- through assumption is a conservative assumption from the perspective of electricity consumers because some electric power plants may not be able to pass all of their compliance cost s onto consumers in the form of price increases. As discussed in Chapter 7, plants located in states where electricity prices remain regulated under the traditional cost

- of

- service rate regulation frameworkEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 16 may be able to recover compliance cost

- based incr eases in their production costs through increased electricity rates, depending on the business operation model of the plant owner(s), the ownership and operating structure of the plant itself, and the role of market mechanisms used to sell electricity. In contrast, in states in which electric power generation has been deregulated, cost recovery is not guaranteed. While plants operating within deregulated electricity markets may be able to recover some of their additional production costs in increased revenu e, it is not possible to determine the extent of cost recovery ability for each plant. Moreover, even though individual complying plants may not be able to recover all of their compliance costs through increased revenues, the market

- level effect may still be that consumers would see higher overall electricity prices because of changes in the cost structure of electricity supply and resulting changes in market

- clearing prices in deregulated generation markets. Although the convenient analytical simplificatio n of the 100

- percent cost

- pass

- through assumption does not reflect actual market conditions, EPA judges that this assumption is appropriate for two reasons: (1) the majority of steam electric power plants operate in the cost

- of

- service framework (see Chapt er 2 of the RIA report) and may be able to recover increases in their production costs through increased electricity prices and (2) for plants operating in states where electric power generation has been deregulated, it would not be possible to estimate th is consumer price effect at the state level. Thus, this 100 percent cost pass

- through assumption represents a “worst

- case” impact scenario from the perspective of the electricity consumers. To the extent that all compliance

related costs are not passed for ward to consumers but are absorbed, at least in part, by electric power generators, this analysis overstates consumer impacts.
Response to comments regarding "Summary of Economic Impacts for Existing Sources"
The commenter makes three arguments, each addre ssed below.

First, the commenter states that cost

- to

- revenue analysis, as presented for the proposed rule (and also presented for the final rule), should not be used in evaluating the rule because it is “meaningless and misleading” in comparing compliance cost for a single business unit to total company revenue. EPA disagrees that the cost

- to

- revenue analysis is meaningless and misleading. This analysis provides screening

- level insight into the significance of impact of compliance requirements on the overal l business. The cost

- to

- revenue analysis is not meant to be a precise indicator of economic impact, but nonetheless provides useful insight. For example, if this analysis found, for a particular regulatory option, that a substantial number of businesses

co uld incur costs exceeding levels of concern, as described in the RIA, this would signal that the regulatory option should be more closely scrutinized to confirm that the option is affordable for the industry as a whole. EPA further notes that the IPM analy sis, which was also conducted for both the proposed and final rule, provides a considerably more detailed assessment of impact at the level of the plant and generating unit.
Second, the commenter argues that compliance cost should be compared to revenue fr om the generating business unit instead of total company revenue. Recognizing the limited objective of the cost

- to

- revenue analysis, as described above, EPA concludes that performing this analysis at the level of the total company is appropriate and reason able for a screening

- level assessment. EPA also notes that performing the cost

- to

- revenue analysis at the level of the generation business unit, when the overall business is vertically integrated, including transmission andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 17 distribution services, would pro vide an artificially constrained assessment of impact. In a vertically integrated electric power company, generation is the primary business driver, providing the basis for revenue in the transmission and distribution segments. As a result, EPA again concl udes it is appropriate and reasonable to use total revenue in the cost

- to

- revenue analysis. Further, EPA also conducted a complementary analysis where it compared compliance costs to revenue from electricity generated at the level of the individual generat ing plant (see Chapter 4 in RIA report). This level of analysis is, in most instances, lower organizationally than the level of the generating business unit suggested by the commenter and offers additional insight on potential impact of compliance requirem ents on the generation business. The plant

level screening analysis for the final rule shows only 17 plants with cost

- to

- revenue ratios exceeding 3 percent under the final rule (Option D, for scenario without CPP), out of a total of 1,080 plants in the uni verse (see Appendix B, Table B.2.1 of RIA).
Third, the commenter argues that impact should be assessed in terms of the firm’s owners

– i.e., shareholders

– by assessing impact on earnings per share. EPA understands that looking at potential impact on busin ess value and, hence, the firm’s owners provides meaningful insight into the impact of a regulation on the business. In its regulatory analyses for effluent guidelines and other Clean Water Act regulations, EPA regularly looks at the potential impact of

co mpliance costs and market

- level impacts on business value, and accounts for this analysis in assessing the ‘economic achievability’ of regulations. From a financial analysis standpoint, EPA does not agree that earnings per share would be the best metric of impact. This measure does not account directly for impact on business value and financial viability, and is actually inconsistent with the commenter’s preceding arguments about needing to look below the level of the total firm in assessing impact: earning s per share is necessarily a total firm concept since earnings per share is customarily reported at the level of the total firm and the impact would therefore also be assessed at the level of the total firm. Instead, in its analyses of cost and economic im pact for effluent guidelines, EPA estimates change in business value , frequently at the level of the regulated facility, and looks, in particular, for instances in which business value would become negative as a result of compliance requirements, thus sign aling the possibility of a facility closure. EPA regards such analysis as very important in establishing the economic achievability of a regulation. In the context of the Steam Electric ELGs regulatory analysis, this level of analysis is performed via the IPM market model analysis (presented in Chapter 5 of the RIA report), which assesses impact at the level of the individual steam electric generating unit and plant in the context of electricity markets. EPA views this analysis as more insightful in its reg ulatory decisions than the commenter’s proposal to use change in earnings per share as impact metric.

Commenter Name: Tom DeLawrence Commenter Affiliation: PowerSouth Energy Cooperative Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1 Comment Exce rpt Number: 88 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 18 Comment Excerpt:
Unfortunately, as detailed in our comments below, EPA’s callous approach to determining cost

effectiveness and ignorance of technological shortcomings with the proposed technology

- based limits, will have an extraordinary impact on an already economically disadvantaged population. As compared to EPA’s unreasonably low cost estimates, PowerSouth’s engineering estimates of the cap ital costs required to comply with EPA’s preferred options at the Lowman Plant are in excess of $140 million. EPA should reassess their cost estimates and reconsider their preferred options as selected in the Draft Rule.
Comment Response:
EPA disagrees w ith the commenter that there are “technological shortcomings” with the final rule. The commenter offers no basis for this general claim. EPA addressed specific comments on the demonstration and performance of each technology evaluated (by wastestream). The se responses can be found in the comment codes 9.a (FGD Chemical Precipitation), 10.a (FGD Bio), 11.a (FGD VCE), 14.a (Dry Fly Ash Handling), 16.a (Zero Discharge Bottom Ash).
EPA also disagrees with the commenter that EPA’s compliance cost estimates for t he Lowman Plant are “unreasonably low,” as well as the claim that compliance costs for the Lowman Plant “are in excess of $140 million.” The commenter offers no specific basis for these claims. However, EPA evaluated any specific cost estimates provided by the PowerSouth for the Lowman Plant. See the responses to the following excerpts for EPA’s response to the estimates provided:

 DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 34 (in comment code 9.b) (EPA’s response to FGD chemical precipitation cost esti mates);

 DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 40 (in comment code 10.b) (EPA’s response to FGD biological treatment cost estimates);

 DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 44 (EPA’s response to FGD evaporation cost estimates) (in comment code 11.b);

 DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 56 (EPA’s response to bottom ash cost estimates and space constraints) (in comment code 7); and

 DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 63 (EPA’s response to fly ash cost estimates) (in c omment code 14.b).
For the final rule, based on public comments, EPA reassessed cost estimates applicable to the commenter and made several modifications, as detailed in EPA’s Incremental Costs and Pollutant Removals for the Final Effluent Limitations Guid elines and Standards for the Steam Electric Power Generating Point Source Category (Cost & Loads Report) (DCN SE05831/SE05832).
Second, regarding the commenter’s general assertions about the impacts of the rule, EPA disagrees that the rule will have an “ex traordinary impact on an already economically disadvantaged population.” EPA conducted analyses to quantify impacts of the rule at levels of the individual plants, entities that own/operate the plants, electricity consumers, and national andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 19 regional elect ricity markets. The proposed rule analysis did not indicate impacts in the magnitude suggested by the commenter, nor does the final rule analysis. For the final rule, EPA incorporated additional information on the costs expected to be incurred by plants to which the ELGs apply and resulting pollutant loading reductions. EPA also expanded its analysis to evaluate the impacts of electricity rate increases on households within various income groups, including households the commenter refers to as “economically disadvantaged.” As summarized in the preamble and detailed in the RIA document for the final rule, the analyses show that the final rule is economically achievable by the industry and will result in small changes in total electricity production costs (app roximately 0.4 percent nationally and 0.5 percent in the SERC NERC region where the two plants identified by the commenter operate; see Table 5

- 1 in RIA document).
EPA also notes that the final rule will provide significant benefits (see the BCA for the fi nal rule). In fact, EPA analyses show that the “economically disadvantaged” population of concern to the commenter is expected to receive a proportionally greater share of the health benefits from reducing toxic pollutant discharges to surface waters.

For the role of cost

- effectiveness in EPA’s decisions for the final rule , see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.

Commenter Name: Thomas H. Adams Commenter Affiliation: American Coal Ash Association (ACAA) Docum ent Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The ELG Proposed Rule, like the CCR Proposed Rule, fails to consider the economic impact to ACAA members and its niche recycling industry, and continues to neglect the interests of utilities, ash marketing companies, technology developers, suppliers, various industry jobs, and end users focused on recycling CCR’s through benef icial use. The ACAA has repeatedly pleaded for consideration of these interests and how they are affected by the proposed regulations, and repeatedly they have been overlooked. Despite a twelve page section of the ELG Proposed Rule dedicated to economic an d social impacts, it fails to display any concern for the beneficial use industry. 15 Any final rule that is reached without adequate consideration of these issues would be disconnected from a complete understanding of the surrounding facts and circumstance s, and would fail to consider relevant material presented by interested parties, as is required by the APA. 16 The final rule should reflect full consideration of all affected industries and stakeholders, in order to achieve a fair and equitable result.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 20 1 5 See Steam Electric Power Generating Point Source Category: Effluent Guidelines Limitations and Standards, 78 Fed. Reg. 34432, 34491 to 34503 (proposed July 7, 2013) (to be codified at 40 C.F.R. pt. 423)

16 5 U.S.C. § 553(c).
Comment Response:

As noted in the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2, Excerpt Number 8, the final steam electric ELGs do not directly affect the potential for beneficial use of CCR, and in fact may increase the amount of CCR that is available for beneficiation by promoting changes to plant processes, such as conversions to dry handling, that will enhance CCR marketability. For the final ELGs, EPA specifically included consideration of how changes in plant operations as a result of the final rule may affect the availability o f CCR for beneficial use, including concrete and fill applications.
Comments specifically pertaining to EPA’s analysis of the CCR rule are outside the scope of this rulemaking. EPA addressed comments on the CCR rule in the context of that rulemaking (see D ocket EPA

- HQ

- RCRA

- 2009

- 0640

- 11970).

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 100 External Review Flag: No External Review External Review Inco rporated into Response: No
Comment Excerpt:

B. THE ELECTRIC POWER INDUSTRY CAN AFFORD THE TECHNOLOGIES THAT WOULD ELIMINATE THE DISCHARGE OF FLY ASH TRANSPORT WATER.
As explained above in Section II, the relevant test for economic achievability is whether the costs can be reasonably borne by the industry as a whole. 394 The technologies for dry fly ash handling meet this test.
The economic impact of requiring dry handling of fly ash is relatively small given that the overwhelming majority of plants that generate fly ash already use dry handling technology. EPA projects that basing the BAT limits on dry handling would cause 66 plants 395 to incur compliance costs. 396 This amounts to only 12

- 13 percent of all coal, coke, and oil plants. 397 Put diffe rently, 87

- 88 percent of all coal and oil plants would have zero compliance costs to comply with a BAT standard based on dry handling of fly ash.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 21 Even if EPA focuses on the 481 coal, coke, and oil plants that generate fly ash, 398 only 14 percent of plants would face compliance costs. And even if the agency zeroes in on coal and coke plants, which generate the greatest amount of fly ash, only 19% of coal and coke plants would face compliance costs. 399 81% of coal and coke plants would face zero compliance costs because they already have dry handling systems in place. A rule that would lead 81% of the most affected plants to incur no compliance costs is economically achievable.
The total, industry

- wide cost of a zero discharge standard can be reasonably bor ne by the industry. EPA calculates that the 66 plants that would have to convert to dry handling would spend $398 million on capital costs, $177 million on operating and maintenance costs per year, and an additional $20.7 million per year on 10

- year recurr ing costs. 400 We are unable to comment on the compliance costs for specific plants, since the plant

- level data has been redacted by EPA. 401 As a rough guide to the plant

- level costs, we divided these costs by 66, the number of affected plants. Based on this calculation, the average plant would incur $6 million in capital costs and approximately $3 million in O&M costs per year. 402

Whatever cost metric one uses, these costs are achievable for the electric sector as a whole. Since EPA has analyzed the cost of regulatory options rather than the component costs of treating different waste streams, we can examine the economic impact of the various options that include dry handling of fly ash as BAT. EPA conducted the full suite of cost analyses for only two

o ptions, Options 3 and 4. Option 4 includes dry handling for fly ash, and the record demonstrates that Option 4 is economically achievable, which means that each of the component parts of Option 4

— including dry fly ash handling

— is economically achievable. 403

For Options 3 and 4, EPA presented a cost

- to

- revenue screening analysis. Option 4 would

cause 798 plants to devote 0% of their revenues to compliance costs; 117 plants would spend 1

- 3% of the revenues on costs, and only 48 plants would have a cost

- to

- revenue ratio greater than 3%. 404 EPA asserts that “entities incurring cost below 1% of revenue are unlikely to face economic impacts,” 405 and 84% of plants will have costs at or below 1% of revenues. This suggests that the industry as a whole can easily bear the cost of dry fly ash handling that is part of the cost of Option 4.
Option 4 would increase variable production cost by only 1% on a per megawatt hour basis. 406 EPA modeling indicates that Option 4 would result in only a .1% increase in retirements (relative to the baseline capacity of the industry). 407 Even if all of the costs of Option 4 were attributable to dry fly ash handling

– which they obviously are not

– the costs are so small that only .1% of total industry capacity would retire early.

Fi nally, the cost effectiveness of requiring dry handling of fly ash is $27 per TWPE, 408 which is well within the range of cost effectiveness values EPA has found reasonable in other ELGs. 409

In short, whether one determines economic achievability based on t he total cost to industry, cost to revenue ratios, plant closures, or cost

- effectiveness, dry handling of fly ash is economically achievable. As explained infra Section IX, it is unlawful for EPA to base its BAT determination on cost metrics other than the standard for economic achievability articulated by the courts, namely, whether the costs can be reasonably borne by the industry as a whole. But evenEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 22 assuming, for the sake of argument, that all of the cost metrics EPA has evaluated in this rulemaking ar e appropriate potential bases for a BAT determination, dry fly ash handling is economically achievable under any of them. Therefore, there can be no dispute that the cost of dry fly ash handling can be reasonably borne by the industry as a whole and there fore is economically achievable.

394 Waterkeeper Alliance v. EPA , 399 F.3d 486, 516 (2d Cir. 2005); Rybachek v. EPA , 904 F.2d 1276, 1290

- 91 (9th Cir. 1990); Am. Iron & Steel Inst. v. EPA , 526 F.2d 1027 (3d. Cir. 1975).

395 This excludes certain small (< 50MW) and oil

- fired units. If those plants are included, 76 plants would incur costs to convert from wet

- sluicing to dry vacuum handling of fly ash. Incremental Costs and Pollutant Removals at 7

- 4.

396 Id. at 7

- 4 n.43.

397 See TDD at 4

- 16 (calculating tha t there are 527 to 552 coal, coal, and oil plants).

398 Id. at 7

- 22.

399 Id. at 7

- 23.

400 Id. at 9

- 40.

401 See Appendices to Incremental Costs and Pollutant Removals.

402 TDD at 9

- 40.

403 Like Option 4, Option 3 is economically achievable. However, in the technologies proposed as BAT for waste streams other than fly ash transport water fall, Option 3 falls far short of what the Clean Water Act requires.

404 78 Fed. Reg. at 34,494.

405 78 Fed. Reg. at 34,495.

406 78 Fed. Reg. at 34,498.

407 Id.

408 TDD at 8

- 34.

409 RIA at D

- 8 (11 final effluent limitations guidelines have cost

- effectiveness values greater than or equal to $27 for direct dischargers).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 23 Comment Response:
The commenter supports a zero

- discharge requirement for the discharge of pollutants in fly ash transport water because, as the commenter states, “the total, industry

- wide cost of a zero discharge standard can be reasonably borne by the industry.” For the final rule, EPA evaluated the economic achievability of several regulatory options that inv olve control of multiple wastestreams, rather than the economic achievability of controls for particular wastestreams. These options are described in Section VIII of the preamble. The final rule is based on regulatory Option D for existing sources and regu latory Option F for new sources. Option D includes a zero discharge requirement for fly ash transport water (based on dry handling) for existing sources that are not oil

- fired generating units nor are less than or equal to 50 MW in nameplate capacity, and Option F includes a zero discharge requirement for fly ash transport water (based on dry handling) for new sources. As explained in the preamble, EPA concluded that Option D for existing sources is economically achievable for the industry as a whole, and t hat Option F for new sources does not present a barrier to entry.

For the role of cost

- effectiveness in EPA’s decisions for the final rule , see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 105 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA's analyses of Option 4, which would require zero discharge of bottom ash transport water for all units greater than 50 MW, show that the economic impact of requiring zero discharge of bottom ash can be reasonably borne by the industry as a whole. Option 4 would increas e annual costs by approximately 1.4% and increase variable production costs by 1%. 437 Option 4 would cause a 0.1% increase in unit retirements. 438 Even if all of the costs of Option 4 were attributed to zero discharge of bottom ash transport water

– whic h they are not, making it

a highly conservative assumption

– the costs could still be reasonably borne by industry, since they would increase annual costs by roughly 1% and cause a less than 1% increase in unit retirements.
The impacts of Option 4 are also reasonable when viewed through the lens of cost

- to

- revenue ratios. Under a zero discharge standard for plants greater than 50 MW, 85 percent of plants would incur costs that are less than 1 percent of revenues, 439 which EPA claims means that they “are un likely to face economic impacts.” 440 Under Option 4, only 48 plants

– 4 percent of the industry

– would incur compliance costs greater than 3 percent of revenues. And those costs include the cost to treat all waste streams (FGD wastewater, fly ash transp ort water, etc.). GivenEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 24 that the costs of Option 4 as a whole are achievable, the component cost to convert all units greater than 50 MW to zero discharge systems is also achievable.
Zero discharge of bottom ash is economically achievable if cost

- effectiv eness is considered as well. Requiring all units greater than 50 MW to meet a zero discharge standard for bottom ash transport water would cost $107 per TWPE. 441 This is well within the cost

- effectiveness values that EPA has approved in other effluent li mitations guidelines; $107 per TWPE is lower than the cost

- effectiveness of the final ELGs for seven separate industries. 442 EPA has issued final effluent limitations guidelines with cost

- effectiveness values nearly four times as high as the cost

- effectiv eness of bottom ash retrofits. 443

437 78 Fed. Reg. at 34,498.

438 Id.

439 78 Fed. Reg. at 34,494.

440 Id. at 34,495.

441 TDD at 8

- 34.

442 RIA at D

- 8 ($404 per TWPE for direct dischargers in the electrical and electronic components industry; $155, $175, $ 111, $116, $127, and $380 per TWPE for indirect dischargers in the aluminum forming, centralized waste treatment, leather tanning, metal molding and castings, metal products and machinery, and transportation equipment cleaning industries, respectively).

44 3 See id.
Comment Response:
The commenter supports a zero

- discharge requirement for the discharge of pollutants in bottom ash transport water because, as the commenter states, “the economic impact of requiring zero discharge of bottom ash can be reasonab ly borne by the industry as a whole.” For the final rule, EPA evaluated the economic achievability of several regulatory options that involve control of multiple wastestreams, rather than evaluating the economic achievability of individual controls for par ticular wastestreams. These options are described in Section VIII of the preamble. The final rule is based on regulatory Option D for existing sources and regulatory Option F for new sources. Option D includes a zero discharge requirement for bottom ash tr ansport water (based on dry handling or closed

- loop systems) for existing sources that are not oil

- fired generating units nor are less than or equal to 50 MW in nameplate capacity, and Option F includes a zero discharge requirement (based on dry handling o r closed

- loop systems) for bottom ash transport water for new sources. As explained in the preamble, EPA concluded that Option D for existing sources is economically achievable for the industry as a whole, and that Option F for new sources does not present a barrier to entry.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 25 For the role of cost

- effectiveness in EPA’s decisions for the final rule , see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 108 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA's annualization method overestimates annual costs by a factor of nearly two. EPA used a 7% discount rate and 20

- year equipment lifetime to annualize costs. 460 EPA selected a 7% discount rate based on the claim that it “is the real (i.e., inflation rate factored out) cost of capital as estimated by the U.S. Office o f Management and Budget [OMB, 2003]” and has been used by EPA in the rulemakings. 461 But the referenced OMB document recommends that agencies use additional discount rates, including 3%, as sensitivity analyses to the use of a 7% discount rate. 462 Moreov er, the OMB circular cautions that the appropriate discount rate changes over time as interest rates and rates of return change. Accordingly, with interest rates having plummeted since the circular was drafted in 2003, EPA's choice of only a 7% discount r ate conflicts with the circular’s recommendations.

460 78 Fed. Reg. at 34,492; Incremental Costs and Pollutant Removals at 8

- 32.

461 Incremental Costs and Pollutant Removals at 8

- 32.

462 OMB, Circular A

- 4 (Sept. 17, 2003), available at http://www.whitehouse.gov/omb/circulars_a004_a

- 4/#d

. This error in calculating the annualization factor affects all of EPA's cost calculations, not just the calculations for bottom ash conversions.

Co mment Response:
EPA disagrees with the commenter that its use of a 7 percent discount rate conflicts with the Office of Management and Budget (OMB)’s Circular A

- 4 guidance. The commenter misunderstands or describes incorrectly EPA’s use of discount rates in the analyses for the Steam Electric ELGs. Specifically, as explained below, EPA used discount rates in two parts of the regulatory analysis, and it used more than one discount rate value in these analyses. EPA’s use of discount rates in these analyses is appropriate and reasonable given the purpose of the analyses, and, further, is consistent with OMB guidance. EPA used discount rates as follows:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 26 1. Analyzing the regulation’s cost burden and economic impact on the regulated community (i.e., the steam elect ric generating units and plants that will need to comply with the final Steam Electric ELGs). For this analysis, EPA used 7 percent to discount and annualize the capital outlays and other costs of regulatory compliance. In its Circular A

- 4, OMB recommends using 7 percent for evaluating a regulation that will mainly displace or alter the use of capital in the private sector (OMB, 2003; updated 2009). Given that the Steam Electric ELGs analysis assesses burden on the steam electric power industry of capital o utlays that would alter and potentially displace the industry’s capital outlay profile, using 7 percent is consistent with the OMB Circular A

- 4 guidance. 2. Analyzing the social cost and benefits of the Steam Electric ELGs. For this analysis, EPA performed ca lculations using two different discount rates

– 7 percent and 3 percent

– both drawing from OMB Circular A

- 4 guidance (OMB, 2003; updated 2009). As described above, the 7 percent discount rate reflects the opportunity cost of capital to society. Per OMB gu idance, the 3

- percent discount rate is intended to reflect society’s valuation of differences in the timing of consumption. EPA views use of both discount rates as reasonable and appropriate for the social cost and benefit analysis; each provides a differe nt perspective for understanding the rule’s economic consequences considering the fact that its costs and benefits occur over a lengthy timeframe. The analysis using the 7 percent discount rate captures the rule’s effects from the standpoint of competing u ses of capital in the economy. The analysis using the 3 percent discount rate takes a different perspective in valuing the rule’s costs over time, in effect considering how the rule affects households’ consumption profile

– e.g., via price increases

– both in the composition and timing of consumption. The 3 percent discount rate analysis is also relevant for valuing the temporal flow of human health and other environmental benefits achieved by the rule.
In summary, EPA performed more than one analysis involving present value discounting and annualization, and thus requiring a discount rate, for assessing the economic impact, and cost and benefits of the rule. EPA used more than discount rate value in these analyses and views its use of the different dis count rates in these analyses as appropriate and reasonable considering their conceptual objectives: assessment of economic impact on the regulated community, and calculation and reporting of the rule’s social cost and benefits. EPA chose the specific disc ount rate values for these analyses based on OMB guidance.
The commenter also states that interest rates have “plummeted since the circular was drafted in 2003,” arguing that EPA should use lower rates than those published by OMB for discounting and annual ization in the steam electric rule analysis. EPA acknowledges that interest rates, particularly short

- term rates, have fallen substantially in recent years, and remain at historically low values in large part because of the U.S. Federal Reserve’s intervent ions to maintain low borrowing costs as a lever for stimulating U.S. economic recovery following the severe recession of 2008

- 2010. However, the current occurrence of lower interest rates does not mean that EPA that should use lower rates than those propos ed by OMB for the steam electric ELG analysis. Two points are relevant:

 First, OMB’s recommended societal cost of capital

– i.e., 7 percent real discount rate

– is based on the observed average real rate of return on capital over a substantial number ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 27 ye ars. The period includes years in which rates of return were higher than this average, and years in which rates were lower than the average. In 2013 revisions to Circular A

- 4, OMB notes that a recent analysis “found that the average rate of return to capi tal remains near the 7 percent rate estimated in 1992.”

 Second, facilities are expected to comply with the steam electric rule over a substantial number of years into the future; for the final rule, EPA analyzed incremental costs over the period of 2015 th rough 2042, with capital outlays assumed to largely occur between 2019 and 2023. It is widely acknowledged, in particular by the Federal Reserve, itself, that the efforts to maintain exceptionally low interest rates will end as the economy continues to rec over. As the U.S. unemployment rate continues to decline, both short

and long

- term interest rates are expected to increase, both in nominal and real terms, and to return to rate levels that have more customarily occurred in the U.S. economy over the past several decades. Given the likelihood of increasing rates, potentially as soon as 2015, using the very low rates of recent years as the basis for discounting in the steam electric rule analysis would artificially reduce the present and annualized values of costs, whether from the industry or societal perspective, and of the rule’s benefits. Relying on these artificially reduced values could lead to incorrect assessments of economic impact and cost

- benefit findings.

In view of these considerations, EPA concl udes that use of the 7 percent discount rate for analyzing cost and economic impact on the regulated community, and as the alternative, higher value for social cost and benefit analysis, is reasonable and appropriate.

Commenter Name: Thomas Cmar Comment er Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 109 External Review Flag: Engineering External Review Incorporated into Response: Yes
Comment Excerpt:
The other primary component of the annualization method is the equipment lifetime. “EPA selected a timeframe of 20 years based on the expected operational life of the dry/closed

- loop recycle bottom ash handling technology.” 463 However, zero discharge systems have been used for longer than 20 years; a more appropriate equipment lifetime would be 30 years. 464 If EPA were to use a 3% interest rate

– which is much closer to the interest rate on a 30

- year treasury note

– and equipm ent lifetime of 30 years, the annualization factor would be roughly half of what EPA used. 465 Bringing these inputs more in line with contemporary data would cut the costs of a zero discharge standard in half.

463 Incremental Costs and Pollutant Removal s at 8

- 32.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 28 464 Fox Report, Appendix E, at 45. Additionally, the useful life of dry handling systems is often assumed to be longer than 20 years; for example, a 1981 TVA study seems to have assumed that dry handling systems could operate for the 35

- year e xpected life of the new plant. See Economic Analysis of Wet Versus Dry Ash Disposal Systems (1981).

465 Fox Report, Appendix E, at 45

- 46.
Comment Response:
As discussed in Chapter 3 of the RIA, EPA calculated private costs at the level of the individual regulated facility and annualized the cost of compliance technology expenditures and other non

annually recurring outlays over various time periods based on (1) the estimated useful life of individual capital cost components or (2) the frequency of recurre nce for other non

- annual outlays (e.g., permit renewal).

The Commenter is correct that the useful life and discount rate both affect calculation of annualized compliance costs, but EPA maintains that the 20

- year life and 7 percent discount rates the Agency used in its analyses are reasonable and appropriate to produce informed regulatory results.
EPA does not agree with the commenter that the Agency should have used a 3 percent discount rate in calculating private costs. See discussion of the use of the 7 p ercent discount rate for the private compliance outlays analysis in the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 108. As described in that comment response, EPA used the 7 percent discount rate for the private cost analysis because this rate is intended to reflect the opportunity cost of capital to society. Consistent with OMB guidance, EPA concludes that this rate is applicable for analyzing for cost and economic impact from the standpoint of regulated facilities, and their owners in the steam electric power industry.
EPA also does not agree with the commenter that the Agency’s analyses should have used 30 years as the operational life of the dry/closed

- loop recycle bottom ash handling technology. EPA used a 20

- year service life as a typi cal planning period for wastewater treatment operations. As described in the RIA and TDD, EPA based its estimate of service life of equipment that may be installed to meet the ELGs on a review of reported performance characteristics of compliance technolog y components. From this review, EPA concluded that the equipment could reasonably be expected to operate for 20 years or more and thus further concludes that 20 years is an appropriate basis for cost and economic impact analyses that account for the estima ted operating life of compliance technology.
EPA discounted and annualized cost values using a 7

- percent discount rate, which is an estimate of the opportunity cost of capital to society. In Circular A

- 4, the Office of Management and Budget (OMB) recommend s that 7 percent be used in evaluating a regulation that will mainly displace or alter the use of capital in the private sector (OMB, 2003; updated 2013). Given that this analysis assesses burden on individual companies and power plants using 7 percent is appropriate. EPA also uses the 7 discount rate in the social cost analysis. In addition, for the social cost and benefit analysis, EPA uses the 3 percent discount rate, which is intended toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 29 capture the effect of changes in consumption flows (see the BCA); however, this rate would not be appropriate for the private cost analysis, which is intended to estimate the economic/financial impact of compliance requirements on facilities and companies.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjusti ce, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 216 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
b. EPA’s conclusion that the total industry cost of Opt ion 5 is too high is not supported by the record and is an improper basis for rejecting this option.
EPA never evaluates whether the costs of mechanical evaporation are economically achievable by the industry, and there is nothing in the record to demonstr ate that it is not. Instead of applying this well

- establish standard for economic achievability, EPA rejected Option 5 based on the total cost to industry, which it calculated at $2.3 billion in annualized social costs, and “because of preliminary indicat ions that it may not be economically achievable.” 233 EPA notes that while affordability to the industry is the relevant cost factor for BAT, at isolated times it has considered total industry cost.
The previous rulemakings to which EPA cites as precedent for this approach do not demonstrate that total industry cost is a valid basis for concluding whether a technology is economically achievable. For instance, a 2009 rulemaking on the construction and development point source category, EPA rejected options for sediment control that would have cost $4.9 billion and $9 billion because they would provide only marginally greater removals than the preferred option costing just under $1 billion. 234 In that rulemaking, as well as in this one, total industry cost i s merely a guise for incremental cost

- benefit decision making. EPA may not base its BAT determination on the cost effectiveness of the technology in question, see supra Section II. However, a comparison to the 2009 rulemaking in fact demonstrates the rela tive cost

effectiveness of Option 5 and mechanical evaporation. While Option 5 costs three times more than Option 4, 235 it removes over 10 times as much pollution from our waterways. 236

The statutory mandate to consider cost in setting BAT has been inte rpreted definitively by the courts. With respect to cost, the relevant inquiry for EPA is whether “costs can be reasonably borne by the industry .” 237 The inquiry is not whether the costs of a given control are warranted in EPA’s estimation, or whether the costs are “high” in an abstract and subjective sense. Total industry cost, taken out of the context of the industry’s size and revenues, 238 is an arbitrary metric and an inappropriate basis to reject a technologically feasible option as BAT. 239 Here, EP A’s assessment that the total industry cost is too high is totally unmoored fromEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 30 any standards governing what total costs are acceptable; thus, total industry cost is not only the wrong cost test for determining BAT, it is wholly arbitrary in application.
EPA’s other economic basis for rejecting Option 5 is the vague assertion that based on “certain screening

- level economic impact analyses,” “compliance costs may result in financial stress to some entities owning steam

- electric plants. 240 In fact, as discussed below in Section IX, EPA’s own screening

- level analysis demonstrates that the costs of Option 5 can be borne by the industry. That some entities may experience some degree of financial stress is not a reason to reject mechanical evaporation as B AT. 241

233 78 Fed. Reg. at 34,473.

234 Effluent Limitations Guidelines and Standards for the Construction and Development Point Source Category, 74 Fed. Reg. 62,996, 63,026.

235 TDD at Table 9

- 3 (comparing total capital costs).

236 TDD at Table 10

- 9.

237 Waterkeeper Alliance v. U.S. EPA , 399 F.3d 486, 516 (2nd Cir. 2005) (emphasis added); see also Rybachek v. U.S. EPA , 904 F.2d 1276, 1290

- 91 (9th Cir. 1990) (discussing this standard).

238 See Synapse Report, Appendix A, at 48.

239 In addition, the afforda bility of an option combining BAT proposals for various waste streams is an inappropriate basis to conclude that a particular technology is not economically achievable for the waste stream it is designed to address. Economic achievability should be determ ined on the waste stream level, not the option level.

240 74 Fed. Reg. at 34,473.

241 See infra bottom ash section, discussing some plant closures not a barrier to BAT.
Comment Response:
EPA disagrees with the commenter that “EPA’s conclusion that the to tal industry cost of Option 5 is too high is not supported by the record and is an improper basis for rejecting this option.” Proposed Option 5 was renamed as Option F for the final rule. EPA did not select Option F as the basis for requirements for existi ng sources for the final rule. Option F would have established limitations and standards applicable to FGD wastewater based evaporation technology.
As detailed in the preamble, EPA decided that it would not be appropriate to identify evaporation as the BAT basis for control of pollutants in discharges of FGD wastewater at all steam electric power plants because of the high costs associated with these potential regulatory requirements.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 31 The cost of an option based on evaporation would be about $800 million mo re expensive, on an annual basis, for the industry as a whole than the cost of limitations based on chemical precipitation plus biological treatment (the technology basis for the final BAT limitations applicable to FGD wastewater). Furthermore, these costs would be incurred while the industry is also facing costs associated with several other rules in addition to the ELGs. Nonetheless, the final rule does establish a voluntary incentives program in which participating plants may opt to meet BAT limitations applicable to FGD wastewater based on evaporation, and receive a definite date of December 31, 2023, for implementation of those limits (see preamble Section VIII for more details).
EPA disagrees with the commenter’s statement that “ In [the C&D] rulemaking , as well as in this one, total industry cost is merely a guise for incremental cost

- benefit decision making. ” For the final rule, EPA calculated the cost

- benefit ratio and cost

- effectiveness of the options separately (see Section XV of the preamble, Appen dix F in the RIA, and the Benefit Cost Analysis) and did not use these as the bases for rejecting Option F or, for that matter, for selecting Option D as BAT. For the role of cost

- benefit in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 in C omment C ode 6.e
, and for the role of cost

- effectiveness in EPA’s decisions for the final rule , see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h. Moreover, EPA did not use the result s of its screening

- level economic impact analyses, such as the cost

- to

- revenue ratios noted by the commenter as indicators of financial stress, to reject Option F for existing plants.
EPA also disagrees with the commenter’s statements that: “ Total industry cost . . . is an arbitrary metric and an inappropriate basis to reject a technologically feasible option as BAT. Here, EPA’s assessment that the total industry cost is too high is totally unmoored from any standards governing what total costs are accepta ble; thus, total industry cost is not only the wrong cost test for determining BAT, it is wholly arbitrary in application.” The “cost” of achieving the effluent reduction is a factor explicitly mentioned in section 304(b)(2)(B) of the Act to be “take[n] in to account” for BAT. EPA must therefore consider cost in developing ELGs based on BAT. And, while the legislative history makes clear that EPA’s decision must be “reasonable,” the Act provides EPA with a great deal of discretion in how exactly cost should be considered and what weight to give that factor. See Weyerhaeuser Co. v. Costle , 590 F.2d 1011, 1045 (D.C. Cir. 1978) (“Congress did not mandate any particular structure or weight for the many consideration factors. Rather, it left EPA with discretion t o decide how to account for the consideration factors, and how much weight to give each factor.”); BP Exploration & Oil, Inc. v. EPA , 66 F.3d 784, 799

- 800, 802 (6th Cir. 1995); see also Ass’n of Pacific Fisheries v. EPA , 615 F.2d 794, 817 (9th Cir. 1980) ( citing legislative history). In this case, EPA offered a reasonable basis for rejecting BAT requirements for FGD wastewater based on evaporation by demonstrating that the annual cost to the industry of limitations based on evaporation would be more than 2 and 1⁄2 times the cost to industry estimated for the final rule (after tax) (approximately $570 million more expensive than the final rule, on an annual basis, after tax). and explaining that the industry is simultaneously facing requirements associated wit h several other rules, which make the potential additional cost to the industry not insignificant (see DCN SE05978 for memo presenting technology

- specific compliance costs).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 32 As the commenter notes, EPA has considered total cost to the industry in several o ther ELG rules, including for the Electroplating and Metal Finishing Point Source Categories, 48 FR 32462, 32468 (July 15, 1983), and for the Construction and Development Point Source Category, 74 FR 62996, 63026 (Dec. 1, 2009), and its decision to reject a BAT option in the Oil and Gas Extraction ELGs based in part on total industry court has been upheld in court. BP Exploration & Oil, Inc. v. EPA , 66 F.3d 784, 796

- 97 (6th Cir. 1995).
EPA notes that, for the final rule, it did select Option F as the basis for new source requirements, NSPS/PSNS (which includes standards for discharges of pollutants in FGD wastewater based on evaporation). This is based on the demonstrated performance of evaporation technology and the lower cost of installing technologies at new sources as compared to retrofitting existing sources. See Section VIII.D of the preamble for further discussion of the basis for EPA’s determination.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 217 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
2. Chemical precipitation plus biological treatment is economically achievable.

EPA has esti mated that the total capital cost for the 116 plants that would need to retrofit with biological treatment is $2.5 billion, and that total O&M costs across these same plants would be $257 million. The data show that, considering the size and revenues of t his industry, it can reasonably bear these costs.
Option 3 would increase annual costs by approximately 0.6% and increase variable production costs by 0.5%, and would result in no change in generating capacity. 301 Option 4 would increase annual costs by 1 .4%, variable production costs by 1%, would cause a 0.1% increase in unit retirements. 302 Even if all of the costs of either Option 3 or Option 4 were attributed to biological treatment of FGD wastewater

– which they are not, making it a highly conservati ve assumption

– the costs could still be reasonably borne by industry.
Although EPA did not directly evaluate the cost

- to

- revenue ratios for biological treatment standing alone, it did so for the options including a biological treatment component

— Options 2
, 3, and 4

— and the results confirm that this technology is affordable. Even the most expensive of these options, Option 4, would impose annualized compliance costs of more than 3 percent of revenue for only 48 out of 1,079 plants. 303 Nearly 800 plants wo uld experience no costs, 111 plants would experience costs of less than 1 percent of annual revenues, and 117 plants would experiences costs of between 1 and 3 percent of annual revenues. 304Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 33 The baseline cost

- to

- revenue analysis assumes

—unrealistically

— tha t utilities would pass on none of the costs to their customers. EPA did conduct a sensitivity analysis to account for the likelihood that 50% of these costs could be passed through to consumers; that sensitivity analysis illustrates the affordability even more starkly. For Option 3, assuming that plants could pass through 50 percent of their costs to consumers, only three plants would see a cost

- to

- revenue impact that is greater than 3 percent. For Option 4, that number increases to only ten plants. 305 As biological treatment is a part of each of these options, it follows that it too, is economically achievable for the industry as a whole.

301 78 Fed. Reg. at 34,498.

302 Id.

303 RIA at Table 4

- 1.

304 Id.

305 RIA, Appendix B, at Table B

- 2.

Comment Response:
The commenter states that “chemical precipitation plus biological treatment is economically achievable” for the steam electric power generating industry. For the final rule, EPA evaluated the economic achievability of several regulatory options that involve control of multiple wastestreams, rather than evaluating the economic achievability of individual controls for particular wastestreams. These options are described in Section VIII of the preamble. The final rule is based on regulatory Option D for existing sources and regulatory Option F for new sources. Option D includes limitations and standards applicable to the discharge of FGD wastewater (based on chemical precipitation plus biological treatment) for existing sources that are not oil

- fire d generating units nor are less than or equal to 50 MW in nameplate capacity. For the final rule, EPA used a very similar approach to estimate impacts on the steam electric industry as it did at proposal, updating certain assumptions to reflect new informa tion the Agency compiled upon reviewing the public comments. The results of EPA’s analyses are available in the preamble and the RIA. As explained in the preamble, EPA concluded that Option D for existing sources is economically achievable for the industry as a whole.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 218 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 34 Comment Excerpt:
2. Reliance on BPJ determinations will disproportionately affect environmental justice communities.
As noted above, it is challenging and rare for environmental organizations such as the undersigned commenters to marshal the resources to comprehensively evaluate a BAT determination for a particular plant. Clearly, most impacted local communities lack these kinds of resources. Thus, a critical flaw with relying on case

- by

- case BPJ determinations is that BAT determinations wil l vary by jurisdiction and, even within a single jurisdiction, may vary depending on whether a local community or environmental organization is able to participate in the administrative process and has the resources to advocate for protective permit limits

. Communities without resources to engage in the permitting process in this way are much less likely to be able to compel the permitting authority to issue a permit containing strong BAT

based limits. EPA should have evaluated the environmental justice im plications of two of its preferred options

— 3a and 3b

— which would fail to provide the same protection to under

resourced communities as a uniform national standard. EPA’s environmental justice analysis fails to acknowledge the implications of reliance on BPJ for these groups. 358

358 See 78 Fed. Reg. at 34,532; RIA at 10

- 2 to 10

- 5.
Comment Response:
EPA agrees with the commenter that, where EPA has the information to establish nationally applicable, technology

- based effluent limitations and standards, s uch limitations and standards are generally preferable to those developed on a “best professional judgment” (BPJ) basis. This is due, in part, to the fact that national limits provide predictability and clarity to the regulated entities, as well as affecte d communities, and they reduce the burdens associated with developing limits on a site

- specific basis.
The commenter states that EPA should have evaluated the environmental justice implications of two of its proposed regulatory options, which would have re quired limitations and standards for discharges of FGD wastewater from steam electric generating units to be determined on a BPJ basis. For the final steam electric ELGs, where possible, EPA established uniform, nationally applicable limitations. In partic ular, and of interest to the commenter, the final rule establishes nationally applicable limitations and standard for discharges of FGD wastewater from the steam electric industry because EPA had sufficient information with which to set such limitations an d standards and thus requiring BPJ permitting would have placed an unnecessary burden on both the regulated industry and the permitting authorities. See Section VIII of the preamble for details.
For the reasons explained in Section VIII.I of the preamble, the final rules continues to reserve BAT/PSES and NSPS/PSNS for non

- chemical metal cleaning wastes. Thus, permitting authorities must continue to establish limitations and standards based on BPJ for generating units discharging that wastestream. See preamb le Section XVI.A.5 for more information on permittingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 35 of non

- chemical metal clean wastes. See comment code 6.j. of this comment

- response document for more detailed responses to comments related to BPJ.
EPA is sensitive to concerns regarding the disadvantag e to certain communities of relying on BPJ to set permit requirements. The Agency did not find data to assess whether reliance on BPJ place certain communities at a greater disadvantage. As noted above, however, EPA recognizes that relying on BPJ increases the burden associated with developing limits and has, where possible, established nationally applicable limitations.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Commen t Excerpt Number: 25 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
With regards to the question of whether or not these technologies represent an unreasonable burden to the category as a whole ( all steam electric generators other than oil

‐ fired generating units and generating units with capacities 50 MW or smaller), EPA notes that it “retains considerable discretion in assigning the weight to be accorded these factors.” 151 In the Federal Registe r, EPA explains that Option 4 and 5 have not been selected as preferred options on economic grounds:
EPA did not select Option 4 as its preferred regulatory option because of concerns expressed above associated with the projected compliance costs associat ed with zero discharge requirements for bottom ash for units equal to or below 400 MW. 152

EPA did not select Option 5 as its preferred option for BAT because of the high total industry cost for the option ($2.3 billion/year annualized social cost) and beca use of preliminary indications that Option 5 may not be economically achievable. 153

As evidence of this judgment, EPA provides the results of several economic screening tests, notably: total annualized compliance and social costs, plant and firm cost

‐ to

‐ re venue ratios, cost

‐ effectiveness, plant closures, costs to households, and job effects (see Table 11).
The results of EPA’s screening tests, however, do not support a determination that Options 4 and 5 are not economically achievable. On the contrary, Opt ions 4 and 5 appear to be economically achievable both in the context of the steam electric industry and in comparison to other industries.
Table 11. Summary of steam electric ELG screening test resultsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 36  Cost

‐ to

‐ revenue ratios : This screening test compares EPA’s measure of compliance costs to revenues on a plant and firm basis. In Options 4 and 5, 74.0 percent of plants have no compliance costs whatsoever. Just 4.4 and 6.7 percent of plants, respectively, have costs greater than 3 percent of revenue s; while most of the EPA rulemakings that presented a cost

‐ to

‐ revenue measure showed smaller shares of entities with cost

‐ to

‐ revenue ratios greater than 3 percent, at least one ELG category was approved at the same approximate level. 155

EPA’s assumption of zero cost pass

‐ through is a key determining factor in estimating the share of plants with costs greater than 3 percent of revenues. An assumption of 50

‐ percent pass

‐ through of compliance costs would lower the Option 4 and 5 shares substantially: EPA perf ormed this sensitivity for Option 4 and found that the share of plants with costs greater than 3 percent fell from 4.4 percent to 0.9 percent. 156 An assumption of 100

‐ percent pass

‐ through (as is used in EPA’s household cost and jobs analyses) would bring t hese shares down to zero. EPA’s explanation that the zero cost pass

‐ through assumption was chosen to provide a worst case outcome is accurate, but unhelpful:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 37 This assumption is used for analytic convenience and provides a worst

‐ case scenario of regulatory impacts to steam electric plants. Even though the majority of steam electric plants may be able to pass increases in production costs to consumers through increased electricity prices, it is difficult to determine exactly which plants would be able to do so. Consequently, EPA judges that assuming zero cost pass

‐ through is appropriate as a screening

‐ level, upper bound estimate of the potential cost impact from the proposed ELGs to steam electric plants and their parent entities. To the extent that some ste am electric plants are able to recover some of the increased production costs in increased prices, this analysis overstates plant

‐ level impacts.49 The analysis, while helpful to understand potential cost impact, does not generally indicate whether profita bility is jeopardized, cash flow is affected, or risk of financial distress is increased. 157

151 Technical Development Document, pp.1

‐ 4 and 1

‐ 5; EPA cites Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1045 (D.C. Cir.1978) in support of this statement.

152 7 8 Fed. Reg. at 34,473.

153 78 Fed. Reg. at 34,473.

155 Concentrated Aquatic Animal Production at 5.7 percent; see 69 Fed. Reg. at 51,892 (August 23, 2004).

156 Regulatory Impact Analysis, p.B

‐ 2.

157 Regulatory Impact Analysis, p.4

‐ 2

. Comment Response:
The commenter states that the results of EPA’s analyses “do not support a determination that Options 4 and 5 are not economically achievable. On the contrary, Options 4 and 5 appear to be economically achievable both in the context of the steam electric in dustry and in comparison to other industries.” The final rule establishes limitations and standards for existing sources based on Option D, which is similar to proposed Option 4, but unlike proposed Option 4, it does not contain limitations and standards a pplicable to the discharge of combustion residual leachate based on chemical precipitation. Section VIII of the preamble explains the basis for EPA’s decision to select Option D for existing sources, including why EPA did not identify chemical precipitatio n as the technology basis for control of pollutants in discharges of combustion residual leachate. As explained in the preamble, EPA determined that Option D is economically achievable for the steam electric industry as a whole, based on its expected impac ts on steam electric generating capacity as reflected in EPA’s IPM analysis.
Regarding EPA’s rejection of Option F (the same as proposed Option 5) as the basis for BAT, see Section VIII of the preamble and EPA’s response to related comment DCN EPA

- HQ

- OW

20 09

- 0819

- 4684

- A1, Excerpt Number 216.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 38 28.c. Econ

– IPM

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 42 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Uncertainty in the Modeled Air

- related Benefits
US EPA used the IPM to estimate the change in emissions of NOx, SO 2 and CO 2 for two of the eight proposed ELG options. The model is an economic optimization model that is used to evaluate the impact of environmental policies on the electric power sector in US. According to the US EPA, specifically, "IPM is a multi

- regional, dynamic, deterministic linear programming model of the U.S. elec tric power sector. It provides forecasts of least

- cost capacity expansion, electricity dispatch, and emission control strategies for meeting energy demand and environmental, transmission, dispatch, and reliability constraints" (US EPA, 2011b, pg. 1

- 1). Whi le we have not critically analyzed the technical merit of each of the IPM model assumptions, it is clear that the model involves a series of simplifying assumptions that contribute to the significant uncertainties in modeled emissions estimates. US EPA dis cusses some of these sources of uncertainty, but not others. While it is not always discernible in what direction (increased or reduced benefit) simplifying assumptions will affect that analysis, importantly, US EPA provides no sensitivity analyses to bo und benefit estimates. Some of the key uncertainties associated with the IPM model in general, as well as specific assumptions made for the ELG analysis, are listed below.

 Assumption that electricity demand will not change between the baseline level and th e years analyzed, and therefore does not capture electricity price increases that might result from the proposed ELGs;

 Simplified estimates of projected changes in fuel prices and the assumption that imports from Canada and Mexico would not change;

 The use of baseline air emissions under existing air regulations to benchmark the additional reductions expected from the regulatory options of the ELG rule, even though at least one of considered rules, the final Cross

- State Air Pollution Rule (CSAPR), has not b een finalized;

 The aggregation of all EGUs into "model plants" based on similar costs and operational characteristics, which because of significant variability among plants by location, plant characteristics, and by meteorology, likely skews the results an d provides an unrealistic estimate of air

- related benefits;

 Running the IPM model for only two years (2020 and 2030) to represent the time periods 2017

- 2024 and 2025

- 2040, respectively, without specifying extrapolation methods for the individual interveni ng years (US EPA, 2013d, Chapter 8); andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 39  Selection by US EPA of a compliance response for each plant based on complete compliance with proposed regulatory options, instead of the IPM option in which modeled plants select their own compliance response based on the most economic outcome for that plant (US EPA, 2013h, Appendix C).
Comment Response:

For the role of benefits

- costs in ELG determinations, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6a).
EPA acknowledges the uncertainties embedded in IPM. However, EPA determined that IPM is an appropriate tool for estimating the electricity market and emissions impacts of the ELGs. IPM is a dynamic linear programming model that can be used to project power sector behavior und er future business

- as

- usual conditions. It provides forecasts of least cost capacity expansion, electricity dispatch, and emission control strategies while meeting energy demand and environmental, transmission, dispatch, and reliability constraints. EPA us es the best available information from utilities, industry experts, gas and coal market experts, financial institutions, and government statistics as the basis for the detailed power sector modeling in IPM. This information includes projected demand, fuel prices and imports assumptions highlighted by the commenter. See response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt 204 (in Section 29.h) for further discussion of IPM uncertainty, review process, and prior applications.

EPA notes that the a ggregation of generating units into model plants does not have nearly the significance on the results as what is implied by the commenter. The aggregation of steam electric electricity generation units, in particular, retains much of the spatial specificit y present in the EGU

- level information by grouping similar units within a given plant . See Section 4.2.6 in the IPM v5.13 documentation for details. EGUs are only aggregated if they have all of the following 11 characteristics: Model Region; unit technolog y type; fuel demand region; applicable environmental regulations; state; facility for fossil units; unit configuration; emission rates; heat rates; fuel; and size. As a result of the aggregation, the number of modeled coal steam units goes from 1,003 units to 759 model plants.
As discussed in Chapter 5 of the RIA and Chapter 7 of the BCA, EPA used data for each of the four run years (2016, 2020, 2025, and 2030) as representing all years within each run year period.
Regarding the general concern that EPA did not conduct sensitivity analyses using IPM to evaluate how projected generation (and therefore emissions) may change, the Agency notes that the analyses EPA conducted using IPM (total of three model runs, including sensitivity around the effects of the Co al Combustion Residuals (CCR) rule) all show very small incremental impacts associated with the ELGs. The model runs all point to positive improvements in air quality. Given the small magnitude of impacts, conducting additional IPM runs is unlikely to prov ide any more useful or consequential insight on the impacts of the final ELGs, while requiring considerable resources and time.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 40 While it is true that the model does not model changes in demand that may result from increased electricity rates (i.e., demand is assumed to be inelastic), EPA notes that, as far as the ELG impacts are concerned, the impacts are very small (wholesale electricity price effects are 0.5 percent or less, depending on the region; see Chapter 5 in RIA) and therefore unlikely to signific antly affect electricity consumption and, by extension, projected emissions associated with the amount of electricity generated to meet the demand.
The concern regarding the emissions baseline reflecting the effects of CSAPR does not apply to the final ELG analysis which IPM v5.13 as the model base case for the final rule instead includes the Clean Air Interstate Rule (CAIR), which remains in effect by a standing court order while EPA reconsiders CSAPR.
Regarding the commenter’s concern that the aggregation of units into model plants in IPM results in different geographical distribution of the impacts, EPA notes that model plants represent the aggregation of units with similar operating characteristics, which include the geographical location of the unit (i. e., only units located in the same state can be aggregated together), size, technology, heat rate, fuel choices, unit configuration, SO2 emission rates and environmental regulations, among other. See Chapter 4 of the IPM documentation for details (document ation is available at http://www.epa.gov/airmarkets/programs/ipm/psmodel.html ). The combination of eleven categories considered in the aggregation scheme and the fact that only units located within the same state and which have all other 10 aggregation cat egories in common can be aggregated into a model plant, significantly reduces the uncertainty associated with using model plants as compared to modeling units individually in IPM. This is particularly true for coal steam units where the number of model pla nts (759) is over 75 percent of the number of individual units (1,003). The fact that IPM groups two similar units at the same plant into a model plant for computational efficiency does not significantly skew the geographical distribution of the effects.

R egarding the commenter’s concern that EPA simulated only two run years and did not interpolate to the intervening years, EPA provided a response specific to the interpolation of air

related benefits in EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt 204 (in Section 29.h ).
Finally, regarding the commenter’s concern that EPA pre

- selected the compliance response for each plant, EPA notes that the final rule establishes limitations on discharges of pollutants, and plants are free to meet those limitations as they see fit. P lants may be able to meet those limits using a range of approaches. EPA used the BAT bases to develop plant

- specific cost estimates. Any incremental costs associated with the BAT technologies are included in IPM when determining the lowest costs of meeting total electricity demand. The lowest

- cost optimization conducted in IPM simulates the decisions of plant owners to retire units prematurely, refuel, or otherwise select an appropriate “compliance response.” EPA recognizes that other, potentially less expe nsive, compliance approaches may be possible for individual plants.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 41 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 222 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
With respect to the first metric, EPA states that it didn’t even run the IPM for Option 5 “[d]ue to scheduling constraints” and because screening

- level analysis for exist ing plants showed that Option 5 costs might result in “financial stress” to some utilities. 632 As discussed in greater detail elsewhere, EPA’s screening

- level analysis does not support EPA’s dismissal of Options 4 and 5 for existing plants. 633 EPA states that this “analysis, while helpful to understand potential cost impact, does not generally indicate whether profitability is jeopardized, cash flow is affected, or risk of financial distress is increased.” 634 Furthermore, even incorrectly assuming that a ll compliance costs will be borne by utilities without at least some part passed on to consumers in the form of higher utility rates, 635 the results of the “screening

- level analysis shows that the entity

- level compliance costs are low in comparison to the entity

- level revenues; very few entities are likely to face economic impacts at any level.” 636 The results of the plant

level cost

- to

- revenue analysis also show that “for the majority of steam electric plants, including those expected to incur zero compli ance costs, costs would not exceed the 1 percent of revenue threshold under any of the eight regulatory options.” 637 In addition, the compliance costs used in the screening

- level analysis don’t account for “anticipated unit retirements and conversions

ann ounced between August 2012 and April 2013, and announced retirements, repowerings, and conversions that are scheduled to occur by 2022”, all of which would reduce total annualized compliance costs. 638 Thus, there is no basis at all for EPA declining to r un the IPM for Option 5, especially where it would preclude a more thorough examination of the economic impacts to new sources associated with Option 5.

632 Id. at 5

- 6 to 5

- 7.

633 See infra Section IX; see also attached Synapse Report, Appendix A.

634 RI A at 4

- 2.

635 RIA at 4

- 2.

636 RIA at 4

- 13.

637 RIA at 4

- 3.

638 RIA at 4

- 5, 4

- 12.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 42 For the final rule, EPA analyzed Options B and D using IPM (see the final preamble for a description of these options and how they compare to proposed Opti on 5). As described in the preamble, EPA selected Option D as the BAT/PSES technology basis for the final rule.
EPA did not analyze Option F, which includes evaporation as the BAT/PSES technology basis for controlling pollutants in FGD wastewater discharge s (as proposed Option 5 did), using IPM because EPA determined that evaporation for FGD wastewater is not BAT for all existing steam electric power plants. In particular, EPA did not identify evaporation as the BAT basis for FGD wastewater discharges from all existing steam electric power plants due to the high cost of possible regulatory requirements based on evaporation for discharges of FGD wastewater at existing facilities. The annual cost to the industry of limitations based on evaporation would be

mo re than 2 and 1⁄2 times the cost to industry estimated for the final rule (after tax) (approximately $570 million more expensive than the final rule, on an annual basis, after tax) (see DCN SE05978). Given the high costs associated with the technology, and t he fact that the steam electric industry is facing costs associated with several other rule sin addition to this rule, EPA decided not to establish BAT limitations for FGD wastewater based on evaporation for all steam electric power plants (however, plants that opt into the voluntary incentives program would be subject to BAT limitations for FGD wastewater based on evaporation, see preamble section VIII.C.13). Conducting an IPM analysis of proposed Option 5 or Option F would thus not have changed EPA’s BAT determination in this regard. See section VIII of the preamble for the final rule and the response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 216 (Section 28.b), for further discussion of EPA’s rationale for not establishing BAT l imitations for FGD wastewater based on evaporation for all steam electric power plants in the final rule.
Regarding the commenter’s assertion that EPA’s decision to not run IPM on the most stringent option (Option 5) discussed at proposal precluded a more thorough examination of the economic impacts to new sources associated with that option, EPA notes that the IPM analysis would not have provided insight on the economic impacts to new sources associated with the ELGs because the model projects no new coal

- fueled capacity to which the incremental costs would apply. Therefore, increases in the costs of constructing and operating new coal

- fueled capacity due to the ELGs do not affect modeled decisions to add such capacity. For the final rule analysis, EPA spec ified incremental costs for new sources in IPM based on technologies defined under Option F, but IPM again projects no new coal

- fueled capacity in either the base case or the ELG policy cases and the incremental costs are of no consequences to the modeled decisions to add generating capacity.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 43 28.d. Econ

– Impacts on new plants

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 150 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA states that it assessed the economic impacts of NSPS requirements on new units in two different ways: (1) using the Integrated Planning Model (IPM) to determine “whet her the costs of complying with the proposed ELGs would affect future capacity additions” and (2) “by comparing the incremental costs for new units to the overall cost of building and operating new units, on a per MW basis” 631 Yet the rule and Regulatory Impact Analysis only provide the analysis for these two metrics for Option 4.
With respect to the first metric, EPA states that it didn’t even run the IPM for Option 5 “[d]ue to scheduling constraints” and because screening

- level analysis for existing plan ts showed that Option 5 costs might result in “financial stress” to some utilities. 632 As discussed in greater detail elsewhere, EPA’s screening

- level analysis does not support EPA’s dismissal of Options 4 and 5 for existing plants. 633 EPA states that th is “analysis, while helpful to understand potential cost impact, does not generally indicate whether profitability is jeopardized, cash flow is affected, or risk of financial distress is increased.” 634 Furthermore, even incorrectly assuming that all compl iance costs will be borne by utilities without at least some part passed on to consumers in the form of higher utility rates, 635 the results of the “screening

- level analysis shows that the entity

- level compliance costs are low in comparison to the entity

- l evel revenues; very few entities are likely to face economic impacts at any level.” 636 The results of the plant

level cost

- to

- revenue analysis also show that “for the majority of steam electric plants, including those expected to incur zero compliance cos ts, costs would not exceed the 1 percent of revenue threshold under any of the eight regulatory options.” 637 In addition, the compliance costs used in the screening

- level analysis don’t account for “anticipated unit retirements and conversions announced b etween August 2012 and April 2013, and announced retirements, repowerings, and conversions that are scheduled to occur by 2022”, all of which would reduce total annualized compliance costs. 638 Thus, there is no basis at all for EPA declining to run the I PM for Option 5, especially where it would preclude a more thorough examination of the economic impacts to new sources associated with Option 5.
With respect to the second metric, EPA evaluates only the relative magnitude of compliance costs for new units for Option 4. Furthermore, much of the detailed costing information for NSPS is unavailable to the public as three out of four NSPS costing memoranda in the docket are not available due to CBI claims. 639 The attachment to the one non

- CBI memorandum is al so identified as CBI. 640 For Option 4, EPA concludes that compliance costs for a new unit at a new plant are 1.5% of expected annualized costs; compliance costs for a new unit at an existingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 44 plant are 1.2% of expected annualized costs. 641 Using informati on in the TDD, Commenters were able to calculate incremental costs as a percent of new generation.

Table 6

– Comparison of Option 4 and Option 5 Incremental Costs and as Percent of New Generation 642

With respect to total annualized costs, Option 5 will o nly result in a 4% increase in the total annualized costs of a new 1,300 MW coal

- fired generation unit at a new plant, and a 3.2% increase in total costs for an existing plant. EPA states that a 1.5% increase under Option 4 is not too high, but EPA does n ot identify the threshold above which the increase in annualized costs as a share of baseline costs cannot be reasonably borne by the industry. There is no basis in the record for EPA’s rejection of Option 5 as BADCT based on the increase in total annuali zed costs in relation to total costs for the new unit. 643 Thus, EPA’s record does not demonstrate that the costs of Option 5 cannot be reasonably borne by industry, and Option 5 is BADCT for new sources.

631 RIA at 3

- 11.

632 Id. at 5

- 6 to 5

- 7.

633 See i nfra Section IX; see also attached Synapse Report, Appendix A.

634 RIA at 4

- 2.

635 RIA at 4

- 2.

636 RIA at 4

- 13.

637 RIA at 4

- 3.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 4 5 638 RIA at 4

- 5, 4

- 12.

639 See EPA, CBI Memorandum to the Steam Electric Rulemaking Record: New Source Performance Standards (NSPS) Costing Memorandum, Docket No. EPA

- HQ

- OW

- 2009

- 0819

- 2210; EPA, CBI Characteristics of New Generating Units and NSPS Analyses, Docket No. EPA

HQ

- OW

- 2009

- 0819

- 1966; EPA, CBI NSPS Capital and O&M Compliance Costs, Docket No. EPA

- HQ

- OW

- 2009

- 08 19

- 197581.

640 See Memorandum from TJ Finseth, ERG, to Steam Electric Rulemaking Record Re Steam Electric NSPS Costs Methodology (DCN SE02130) (Apr. 19, 2013).

641 RIA at 3

- 12.

642 See RIA at 3

- 12 tbl. 3

- 5 and TDD at 9

- 46 tbl. 9

- 12. Calculations are from S ynapse Economics.

643 EPA may have overestimated the capital costs for a new 1,300 MW coal plant. For example, EPA estimates costs of approximately $2,982/kW, but a Black & Veatch calculator last updated in 2011 estimates costs for this type of unit betwe en $3,000/kW to $4,000/kW. Ryan Pletka PE, Black & Veatch’s (RETI’S) Cost of Generation Calculator (May 16, 2011), available at http://www.energy.ca.gov/2011_energypolicy/docume nts/2011

- 05

- 16_workshop/presentations/Ryan_Pletka_B&V.pdf

. Comment Response:
For the final rule, EPA based effluent standards for new sources of discharges of FGD wastewater from steam electric power plants on Option F, which is equivalent to proposed Op tion 5 EPA, which the commenter supports.
Chapter 3 of the RIA describes the projected economic impacts of the final ELGs on new sources (see Section 3.2). The analysis shows that the costs of the suite of technologies that forms the basis for Option F rep resent a small fraction of the overall costs of building and operating a new steam electric generating unit, in the range of 0.3 percent to 3.3 percent. While there is no set threshold for determining the fraction of costs that would constitute a barrier t o additional generation (such threshold would depend on the cost of generation alternatives), this fraction of overall cost is low and unlikely to be material in the investment decision. EPA therefore concluded that the ELGs do not, by themselves, present a barrier to entry.
The commenter’s concerns that EPA may have overestimated the capital cost for a new 1,300 MW coal plants (in footnote 643) seem unfounded given the differences in costs provided by the commenter ($2,982/kW is similar to, or even less, t han the range of $3,000/kW to $4,000/kW provided by the commenter). From the context, EPA infers that the commenter meant that the Agency overestimated the relative impacts of the compliance costs on this type of plant. On this point, the Agency notes that it used estimates published by the Energy Information Administration for new coal

- fired capacity that underlay the widely used Annual Energy Outlook (AEO) projections. As described in Chapter 4 of the RIA for the final rule, EPA revised theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 46 values to inco rporate the most recent plant cost information from the AEO and concluded that the costs associated with NSPS do not present a barrier to new coal capacity.

EPA notes that no coal

- fired steam electric power plants (i.e., those with wastestreams addressed i n this rulemaking) have been announced, nor are projected in the U.S. Department of Energy’s Annual Energy Outlook (AEO) 2014, 1 making the assessment of the relative costs and of any barrier the final ELGs may pose to additional steam electric generation h ypothetical. Similarly, results of the electricity market model using the Integrated Planning Model (see Chapter 5 in RIA document) show no additional coal steam capacity being built through 2050 in the Base Case (in the absence of the ELGs) or in the poli cy cases (with the final ELGs). As discussed in Chapter 5 of the RIA, the IPM results help demonstrate that the ELGs do not pose a barrier to new electricity generation overall (i.e., not just steam electric generation capacity); the model shows essentiall y negligible differences in new capacity projected in IPM under the final rule option.
See related answers for other issues raised in the comment excerpt:

 Regarding EPA’s analysis of Options 4 for existing plants, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 105 (in comment code 28.b)

 Regarding EPA’s analysis of Option 5 for existing plants, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 216 (in comment code 28.b).

1 U.S. Department of Energy (U.S. DOE). 2014a. Annual Energy Outlook 2014 (AEO2014). Release Date: April 2014. Available at: http://www.eia.gov/forecasts/aeo/pdf/0383(2014).pdf. Accessed on September 11, 2014.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 47 28.e. Econ

– Impacts on specific types of entities (small entities, government) / RFA and UMRA

Commenter Name: Publi c Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 100 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excerpt:
Kevin Bromberg with the U.S. Small Business Administration, Office of Advocacy, and our role is to protect small entities before the federal government.
In the context of this rule, it's small independently owned utilities, small rural electric co ops, and small municipalities.
There was a Reg Flex Analysis done by EPA, and here, we have hundreds of small entities who own power plants, but EPA surprisingly has certified the rule as not having a significant economic effect on these small entities, and the first problem that we want to address is transparency.
We are unable to look behind that finding. EPA thinks there is no problem here, but we cannot look behind that finding for the following reasons.
Comment Response:
EPA disagrees with the c ommenter’s statement that the Agency “surprisingly has certified the rule as not have a significant economic effect on . . . small entities” and the commenter’s statement that there is a “problem” with “transparency” in EPA’s analysis. EPA’s analysis to

as sess whether the final rule would have “a significant impact on a substantial number of small entities” (SISNOSE) is consistent with Regulatory Flexibility Act (“RFA”) guidance and follows the approach utilized by EPA in the development of a number of othe r industry effluent limitations guidelines and standards. EPA provided as much information to the public as possible underlying its RFA analysis, consistent with the requirements of EPA’s regulations regarding the protection of Confidential Business Inform ation (see 40 CFR Part 2, Subpart B). While the Agency is unable to provide results of its RFA analysis for each individual entity that owns steam electric power plants due to the need to protect data claimed as CBI by the steam electric industry survey re spondents, the Agency made public review and participation possible by describing its approach and data sources in detail and providing analytical results for the overall electricity market and for the steam electric power generating industry. As described in Chapter 8 of the RIA, EPA identified parent entities of steam electric power plants by determining the highest level of domestic ownership of entities that own majority shares in steam electric power plants, based on data provided by the plant owners i n response to the detailed industry survey. EPA then determined which of these entities are considered small by comparing data about theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 48 characteristics of the parent entities to the most recent Small Business Administration size threshold guidelines avail able at the time of analysis (last updated in July 2014). EPA conducted a cost

- to

- revenue analysis to assess the regulatory impact on all small entities and reported the results in the RIA by entity type and ownership category. Based on the reported result s for the steam electric power generating industry, EPA certified the rule as not having a significant impact on small entities.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 149 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
We are a bit disappointed that there was not a SBREFA review. We would have liked

one. There was a very fine effort initiated by EPA to extend an invitation for mayors to come in and meet on unfunded mandates. Unfortunately, the meeting was never completed. We would have liked to have seen that meeting with mayors completed. Mayors, too, want good drinking water, but the mayors were concerned about the impacts on both the electric and the water side of the house. And it would have been far preferable that both the SBREFA panel and the UMRA panels and the UMRA panel is new to me, but it would have been preferable that that would have been completed before the actual proposal of the rule.
Comment Response:
EPA appreciates the interest the Steam Electric ELGs generated by mayors and representatives of government entities. Consistent with the intergo vernmental consultation provisions of Section 204 of the UMRA, EPA held consultations with governmental entities potentially affected by this rule to ensure their meaningful and timely input into development of the ELGs. The consultations included a briefi ng with elected officials or their designated employees in October 2011 and outreach with several intergovernmental associations representing elected officials. The preamble for the final rule describes these consultations. In attendance at the briefing we re representatives from the National League of Cities, the National Conference of State Legislatures, the National Association of Counties, the National Association of Towns and Townships, the U.S. Conference of Mayors, the Council of State Governments, th e County Executives of America, and the Environmental Council of the States. Policy and professional groups such as the National Rural Electric Cooperative Association, America’s Clean Water Agencies, and the American Public Power Association also partici pated in the briefing, as did environmental and natural resource policy staff representing nine state agencies and approximately 25 local governments and/or utilities. The participants asked questions and raised comments during the meeting and

– in respons e to the agency’s specific request for pre

- proposal comments within eight weeks of the briefing

-- separate written submittals regarding technologyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 49 options, pollutant removal effectiveness, costs of specific technologies and overall costs, impacts on small generating units and on small governments were received and carefully considered by EPA while developing the proposed rule. EPA received comments from state and local government representatives on the proposed rule from 31 state and local officials or the ir representatives. Some state and local officials expressed concerns that the ELGs would impose significant costs on small entities, and would result in electricity rate increases that are unaffordable for households. They also noted that small municipal systems typically operate smaller generating units with disproportionally greater compliance costs as compared to larger generating units. Other state and local officials supported revisions of the ELGs and generally opposed reliance on BPJ as basis for es tablishing limits for FGD wastestreams.
EPA considered comments from state and local government representatives in developing the final rule. Many of the concerns expressed by state and local government representatives are addressed in the final rule. For example, as explained in the preamble, the final rule establishes differentiated BAT/PSES requirements for existing oil

- fired generating units and existing generating units with a nameplate capacity of 50 MW or less, which will alleviate some of the

concer ns raised by state and local government representatives by reducing the number of government entities incurring costs to meet the ELG requirements (see Section VIII.C.12 and VIII.E of the final rule preamble).
Regarding the establishment of a SBREFA or UMR A panel, EPA notes that this rule is not subject to the requirements of Section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. As detailed in Chapter 9 of the RIA, EPA evaluated cos ts to government entities and in all of these analyses, both when comparing the total costs and the average and maximum cost per plant, the costs for small government

- owned facilities were less than those for large government

- owned facilities or for small nongovernment

- owned facilities. On this basis, EPA concluded that the compliance cost requirements of the final rule would not significantly or uniquely affect small governments.
Similarly, EPA certified that the rule would not have a significant economic impact on a substantial number of small entities (SISNOSE) and therefore EPA was not required to convene a Small Business Advocacy Review (SBAR) Panel under SBREFA. See preamble Section XVII.C and Chapter 8 of the RIA for more details.

Commenter Name: Lisa C. Messinger Commenter Affiliation: Vectren Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4317

- A1 Comment Excerpt Number: 30 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 50 We fe el the added restrictions on the discharge of fly ash transport water, and potentially bottom ash transport water, as well as the inability to co

- manage waste streams into single treatments systems will add a disproportionate cost to our otherwise very con trolled , small generating units.
Comment Response:
The commenter does not provide a definition of what it views as constituting a “disproportionate cost” for small generating units, does not raise specific concerns with the use of the size threshold EPA proposed for establishing differentiated BAT/PSES requirements (50 MW), nor offers an alternate size threshold that would satisfy those concerns.
Nevertheless, EPA recognizes the potentially higher relative costs faced by owners and operators of small gen erating units and, for the final rule considered establishing differentiated BAT/PSES requirements based on generation capacity. As described in Section VIII.C.12 and VIII.E of the preamble, the final rule establishes differentiated BAT/PSES requirements f or existing oil

- fired generating units and existing units with a nameplate capacity of 50 MW or less.
The commenter also does not explain what it means when it refers to the “inability to co

- manage waste streams into single treatment systems.” EPA’s final rule does not prohibit any particular practices at steam electric power plants. Rather, it establishes limitations and standards for discharges of pollutants based on available and demonstrated technologies. Nonetheless, EPA notes that the final rule does not contain one of the anti

- circumvention provisions proposed, which would have required internal monitoring to demonstrate compliance with certain numeric limitations and standards (see preamble Section VIII.G).

Commenter Name: Winslow Sargeant Comment er Affiliation: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excerpt:
EPA has certified that the proposal will not have a significant economic impact on small entities under the Regulatory Flexibility Act (RFA). Advocacy disagrees and believes that EPA should have convened a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel, as required by the RFA. 6 Small entities potentially affected by this rule include several hundred small independently

- owned private utilities, small government

- owned utilities, and small rural electric cooperative

- owned utilit ies. The proposal would have substantially benefited from this pre

- proposal input.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 51 6 Section 609(c) of the RFA requires the formation of a SBREFA panel of three federal agency representatives that receives small entity input for all EPA rules, except those that are certified by the Administrator as having no significant economic impact on a substantial number of small entities.
Comment Response:
EPA disagrees with the commenter’s assertion that EPA should have convened a SBREFA panel for the steam e lectric rule. In preamble Section XVII.C and Chapter 8 of the RIA, EPA discussed how it identified parent entities, determined which entities are small, and estimated impacts to small entities under the final rule, following largely the same approach used for the proposal (but using revised SBA size standards available as of July 2014).
As described in Chapter 8 of the RIA, EPA identified parent entities of steam electric power plants by determining the highest level of domestic ownership of entities that o wn majority shares in steam electric power plants, based on data provided by the plant owners in response to the detailed industry survey. EPA then determined which of these entities are considered small by comparing data about the characteristics of the p arent entities to the most recent Small Business Administration size threshold guidelines available at the time of analysis (last updated in July 2014). EPA conducted a cost

- to

- revenue analysis to assess the regulatory impact on all small entities and repo rted the results in the RIA by entity type and ownership category. Based on the reported results for the steam electric power generating industry, EPA concluded that the rule would not have “a significant impact on a substantial number of small entities” ( SISNOSE). The analysis and findings are consistent with RFA guidance, as well as approaches used by EPA in the development of a number of other industry effluent limitations guidelines and standards. See Chapter 8 of the RIA for more information.

EPA also analyzed regulatory alternatives that would specifically minimize impacts on small entities. As described in Section 8 of the TDD and Appendix C of the RIA, EPA estimated that by establishing differentiated requirements for existing oil

- fired generating un its and existing generating units with a nameplate capacity of 50 MW or less (“small” generating units), the final rule reduces the number of small entities incurring costs, as well as the costs incurred by small entities.
Regarding a Small Business Advoca cy Review (SBAR) Panel, since EPA certified that the rule would not have a significant economic impact on a substantial number of small entities (SISNOSE), a SBAR Panel was not required under SBREFA.

Commenter Name: Winslow Sargeant Commenter Affiliatio n: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 18 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 52 Comment Excerpt:
Advocacy believes that the rule as proposed is improperly certified under the RFA.
Comment Response:
EPA disagrees with the commenter’s assertion that the final rule “is improperly certified under the RFA”. EPA followed SBA and EPA guidance in determining that t he final rule would not have “a significant impact on a substant ial number of small entities” ( NO SISNOSE). See preamble Section XVII.C and Chapter 8 of the RIA for more details.
See also response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 1.

Com menter Name: Winslow Sargeant Commenter Affiliation: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 23 External Review Flag: No External Review External Review Incorpo rated into Response: No
Comment Excerpt:

I. EPA’s Certification of No Significant Economic Impact on Small Entities Lacks a Factual Foundation and Transparency

A. The Certification Lacks a Factual Basis and Transparency
The agency certifies that this proposal will not have a significant economic impact on a substantial number of small entities. 8 EPA produced a certification analysis that showed surprisingly few plants with costs owned by small entities. The same analysis showed some significant cost s for a large fraction of plants owned by municipalities and rural electric cooperatives of unknown size. 9 Given the hundreds of small entity owners that could be affected, small entity trade associations also concluded that the number of plants with costs owned by small entities was too low. 10

EPA’s analysis in Chapter 8 of the May 2013 Regulatory Impact Analysis (RIA), does not in our view, comply with the RFA requirement to provide a “statement providing the factual basis for such certification” 11 because the agency has withheld the underlying data supporting this determination. EPA has not revealed which plants will have compliance costs, which plants with costs have small entity owners, what those costs are, or the revenues that such plants have to address those costs. This makes it impossible to verify EPA’s underlying data, estimated values and calculations. We do not have the knowledge to identify these plants or estimate these costs without record information. EPA informs us that this addit ional transparency would reveal confidential business information (CBI) about these or other plants, without explaining why it isEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 53 unable to provide this information in some redacted form. However, model plant costs would adequately serve commenters’ needs

. EPA could simply identify the plants with costs, by plant ID, and provide the approximate costs. Revenues, or at least electric generation rates, are available for virtually all plants, which would allow for the cost/revenue comparison to be calculate d and compared with the EPA evaluation.

[ 8 78 Fed. Reg. 34432, 34530 (June 7, 2013).

9 As discussed below, EPA failed to identify the affected plants, and in turn, which affected plants with costs had small entity owners, preventing us from commenting ef fectively on the validity of EPA’s determinations. 10 Personal communication with Dorothy Kellogg, NRECA and Theresa Pugh, APPA, July 19, 2013.] 11 5 U.S.C § 605(b).
Comment Response:

S ee DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 5 (in comment cod e 28.a) for a response to the commenter’s concern regarding the number of plants incurring costs owned by small entities.
EPA disagrees with the commenter that it has not provided a statement providing the factual basis for its certification that the final rule will not have a significant economic impact on a substantial number of small entities because the Agency “withheld the underlying data supporting this determination.” EPA’s analysis to assess whether the final rule would have “a significant impact on a substantial number of small entities” (SISNOSE) is consistent with Regulatory Flexibility Act (“RFA”) guidance and follows the approach utilized by EPA in the development of a number of other industry effluent limitations guidelines and standards. EPA p rovided as much information to the public as possible underlying its RFA analysis, consistent with the requirements of EPA’s regulations regarding the protection of Confidential Business Information (see 40 CFR Part 2, Subpart B). While the Agency is unabl e to provide results of its RFA analysis for each individual entity that owns steam electric power plants due to the need to protect data claimed as CBI by the steam electric industry survey respondents, the Agency made public review and participation poss ible by describing its approach and data sources in detail and providing analytical results for the overall electricity market and for the steam electric power generating industry. As described in Chapter 8 of the RIA, EPA identified parent entities of ste am electric power plants by determining the highest level of domestic ownership of entities that own majority shares in steam electric power plants, based on data provided by the plant owners in response to the detailed industry survey. EPA then determined which of these entities are considered small by comparing data about the characteristics of the parent entities to the most recent Small Business Administration size threshold guidelines available at the time of analysis (last updated in July 2014). EPA c onducted a cost

- to

- revenue analysis to assess the regulatory impact on all small entities and reported the results in the RIA by entity type and ownershipEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 54 category. Based on the reported results for the steam electric power generating industry, EPA certifi ed the rule as not having a significant impact on small entities.
Regarding the commenter’s request that EPA provide data for a model plant, EPA performed its BAT analysis on a plant

- specific basis using the plant

- specific information collected in the

surv ey. Additional plant

- specific information was also received during the public comment period. EPA determined that the model plant approach bears little resemblance to actual plants and therefore does not provide meaningful information. In other words, ther e is no model plant approach that reasonably predicts the costs and/or pollutant removals for a given size of generating unit across the industry. For example, some plants have a single generating unit while others have multiple generating units. One or mo re generating units at a plant may have one or more of the discharges regulated by this rulemaking, but not other discharges (consider, for example, unit 1 at a plant with dry fly ash, wet bottom ash and no FGD; unit 2 at the plant with wet fly and bottom ash and FGD; unit 3 with FGD but dry fly & bottom ash). Many of the compliance costs take into account shared systems (e.g., shared ash silos, shared FGD treatment system) and thus realize some savings not necessarily reflected at a single unit plant. Addi tionally, certain compliance cost elements are related to wastewater flow rate (which is not correlated to size of the generating unit), while other elements are related to size; and then there are other elements that are related to plant

- specific ash gene ration rates and ash disposal practices. These cost elements, at any specific plant, are affected by variables including coal type and characteristics, capacity utilization rate, system metallurgy, and existing ash solids and wastewater management practice s. A model plant approach would not adequately take these considerations into account.

Commenter Name: Winslow Sargeant Commenter Affiliation: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 25 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

B. Small Entity Costs Appear High, But the Record is Insufficient to Permit Analysis
Advocacy is concerned about the EPA finding in Table 4

- 1 of the RIA that approximately half of all the municipally

- owned and rural electric cooperative plants have cost

- to

- revenue ratios in excess of 3%. Under EPA’s own RFA guidance, if these reflect small entity costs, such large impacts pr eclude the presumption of a certification. 12 Also, such a finding suggests that many of these plants would not be financially viable, particularly since the 3% figure is a lower bound for these plants. It is reasonable to expect that several plants woul d experience cost/revenue ratios exceeding 10% or 20%. Evidence of the degree of serious impact on individual plants is, therefore, lacking in the record. This analysis suggests that the certification may not be correct, but without the underlying data, w e can only speculate as to its validity.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 55 Second, this high rate of economic impact on plants generally is not consistent with EPA’s historic interpretation over three decades of “best available technology economically achieveable” (BAT) determinations, whe re average cost/revenue impact ratios are generally in the range of 1 percent or less. We anticipate that a large proportion, if not almost all such plants under severe economic pressure, are owned by small entities. Unfortunately, EPA has not identified these impacted plants, the plant owners, or their estimated revenues or compliance costs. Therefore, we cannot comment effectively on the underlying data or the basis for these determinations. Since cost estimates for model size plants, cost curves, plant revenues and plant

based costs are not provided, it is difficult for Advocacy to provide informed comment on this issue.
Third, EPA reports that, of 1,079 steam electric plants, only 277 face costs under Option 4, regulating FGD, fly ash and bottom ash wa stewaters. Similarly, of 122 municipally

- owned plants, only 23 plants report costs under Option 4. We find this surprisingly small, but cannot evaluate the basis of this claim since EPA has not identified the plants with estimated costs. Underreporting o f plant costs would also lead to an underestimate of the economic impact in the certification analysis.

12 Table 1 shows 8 of 19 co

- op plants, and 10 of 23 municipally owned plants face cost/revenue ratios in excess of 3%. Under EPA’s RFA guidance, if th ese had been individual plants owned by small entities, there would be no presumption of a certification, as the percentage of plants in each category exceeds 20% (see Table 2, November 2006 EPA RFA Gui dance at 24; http://www.epa.gov/sbrefa/ ). Further, for the certification analysis, EPA incorrectly identifies the percentage of affected small entities in Table 8

- 4, instead of the percentage of affected small entities with costs imposed by the rule, which prevents us from examining this proposal using the guidance in Table 2. Use of this metric underestimates the percentage of plants with costs for the parameter used in Table 2 and is insufficient to reach a conclusion regarding certification.
Comment Response:

T he commenter’s interpretation of data presented in the RIA for the proposed rule is incorrect. Because EPA provided a similar presentation of data for the final rule, this response explains the data presented in the RIA for the proposed rule, as well as id entifies corresponding data for the final rule RIA.
Advocacy asserts that Table 4

- 1 of the proposed rule RIA indicates that approximately half of municipality

- owned (10 of 23) and rural electrical cooperative plants (8 of 19) have cost

- to

revenue values ex ceeding 3 percent. However, this is not correct. Instead, Table 4

- 1 indicates that, under Option 4 for the proposed rule, 8 of 67 cooperative

- owned plants (12 percent) and 10 of 122 municipality

- owned plants (8 percent) would have a cost

- to

- revenue value e xceeding 3 percent. Advocacy’s assertion appears to be based on a misunderstanding of the appropriate value for the denominator in calculating the percentage of plants with cost

- to

- revenue values exceeding 3 percent. Advocacy is using the number of plants incurring non

- zero costs as theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 56 denominator in its calculation, whereas the appropriate denominator is the number of plants subject to regulation under the steam electric ELGs . For the final rule, EPA estimated that one out of 63 cooperative

- owned plants (2 percent) and 4 of 122 municipality

- owned plants (3 percent) have a cost

- to

- revenue value exceeding 3 percent (see Table 4

- 1 in the RIA for the final rule).
The commenter then speculates as to the potential impacts precluding a certification of the propo sed rulemaking under the Regulatory Flexibility Act (RFA) if the cooperatives and municipalities mentioned were small. However, Table 4

- 1 presents the cost

- to

- revenue value for plants, not parent entities, and the RFA analysis is conducted at the level of the entity. Moreover, elsewhere in the TDD (Section 8) EPA provided information on which entities owning steam electric power plants were identified as small, along with an analysis of the potential for significant economic impact for those entities. The A gency provided similar information in the RIA for the final rule. For the reasons explained in Section 8 of the final TDD, EPA certified the final rule as not having a significant economic impact on a substantial number of small entities.
EPA also disagree s with Advocacy’s assertion that Table 8

- 4 in the proposed rule RIA only indicates the percentage of small entities owning steam electric power plants, as opposed to the percentage of small entities owing steam electric power plants that are estimated to i ncur compliance costs under the final rule. Instead, it is Table 8

- 2 that presents the number of small entities owning steam electric power plants, along with the percentage of entities owning steam electric power plants that are small. Table 8

- 4, on the o ther hand, presents the cost

- to

- revenue analysis for small entities, providing the number and percentage of small entities with costs greater than or equal to 1 percent and 3 percent, and therefore it provides the percentage of small entities incurring com pliance costs that are greater than or equal to 1 percent of the entity’s revenue. This analysis is consistent with RFA guidance for assessing whether the final rule would have “a significant economic impact on a substantial number of small entities” (SISN OSE), as well as the approach that EPA has used in the development of a number of other industry effluent limitations guidelines and standards.
The commenter also claims that “evidence of the degree of serious impact on individual plants is, therefore, lac king in the record.” However, in Table 4

- 1 of the proposed rule RIA (and Table 4

- 1 of the final rule RIA), EPA did in fact identify the cost

- to

- revenue values, in ranges, for all plants to which the ELGs apply. EPA disagrees with Advocacy’s contention that it is reasonable to expect cost

- to

- revenue values exceeding 10 percent or 20 percent and notes that Advocacy provided no factual support for its assertion. For the final rule, EPA found very few plants with costs exceeding 3 percent of revenue (eight plan ts under Option D, of which four plants are owned by municipalities (out of a total of 122 municipal

- owned plants), and one plant is owned by a cooperative (out of 63 cooperative

- owned plants)). Of these eight plants, two are owned by small entities (see S ection 4.2.2 of the RIA).
With respect to the commenter’s statement about “best available technology economically achievable,” EPA notes that it determined that the final rule is economically achievable

– as required by the Clean Water Act

– based on a comprehensive assessment usin g the Integrated Planning Model, which projected a very small impact on the steam electric industry as a whole as a result of the final rule. In particular, the final rule is projected to result in a net reduction ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 57 843 MW in generating capacity as of mo del year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial) closures and one plant (full) closure.
With respect to Advocacy’s statement that “EPA has not identified these impacted plants, the plant owners, or their estimated revenues or compliance costs,” EPA notes that it provided, in Chapter 8 of the final rule RIA, a detailed discussion of how it identified parent entities, determined which entities are small, and conducted an analysis to es timate potential significant impacts to small entities under the final rule. EPA cannot provide information for, or identification of, individual plants subject to this rulemaking because of its regulatory obligation to protect information claimed as “conf idential business information” by steam electric power plants (see 40 CFR Part 2, Subpart B). See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 25.
Without providing any specific information, Advocacy further suggests that EPA may have underreported plant costs, which would in turn lead to an underestimate of economic impacts in the certification analysis. The TDD describes the methodology used to develop plant

- level costs. These plant

- level costs were used in the cost

- to

- revenue analysi s for small parent entities, which underlies the certification under RFA. EPA does not agree that costs are underreported, as addressed in responses to other comments. EPA revised the estimated compliance costs for the final rule based in part on public co mments.
In summary, EPA disagrees with the commenter’s assertion that the final rule is improperly certified under the RFA. In the RIA, EPA discussed how it identified parent entities, determined which entities are small, and estimated impacts to small ent ities under the final rule. Chapter 8 of the RIA presents the cost

- to

- revenue analysis for small entities, providing the number and percentage of small entities with costs greater than or equal to 1 percent and 3 percent. The methodology used for the final rule is the same as that used and described for the proposed rule. The analysis used data provided directly by the plant owners in response to the detailed industry survey. For the final rule, EPA found that the absolute numbers of small entities, and the fractions of small entities estimated to incur costs exceeding either 1 or 3 percent of revenue are low (see details in Chapter 8 of the RIA). The analysis and findings are consistent with RFA guidance to assess whether the final rule would have “a signif icant economic impact on a substantial number of small entities” (SISNOSE), as well as the approach used by EPA in the development of a number of other industry effluent limitations guidelines and standards.

Commenter Name: Dorothy Kellogg and Michael L eitman Commenter Affiliation: National Rural Electric Cooperative Association (NRECA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4565

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 58 NRECA urges EPA to reconsider the potential impact of this rule on small entities, including the small distribution cooperatives that own the affected G&T cooperatives.
NRECA is disappointed that EPA did not convene a Small Business Regu latory Enforcement Fairness Act (SBREFA) panel. Cooperative G&Ts generate and transmit power to their distribution cooperative owners, most of which qualify as small entities by the Small Business Administration (SBA) criteria (sale of less than 4 million megawatt hours/year). In fact, only five of our distribution cooperatives and 17 G&Ts do not meet the SBA definition of “small”. We question the analysis underlying EPA’s certification that this proposal will not have a significant economic impact on sm all entities under the Regulatory Flexibility Act (RFA). While most of the potentially affected G&T cooperatives do not themselves qualify as “small” under the SBA definition, 265 of the 266 distribution cooperatives that own the G&Ts do.
We agree with S BA’s concern over the potential costs to small entities: (1) the number that may experience cost

- to

- revenue ratios greater that 1%, the upper

- bound EPA has historically used to define “best available technology economically achievable” (BAT); and (2) the n umber that may experience cost

- to

- revenue rations greater than 3%, a threshold that under EPA’s Regulatory Flexibility Assessment (RFA) that would preclude a finding of no significant impact.
NRECA surveyed our members and identified nine cooperatives oper ating 13 plants with one or more wastestreams affected by one or more of EPA’s preferred options. The costs of complying with any of these options would be substantial and would significantly exceed both the 1% and 3% cost

- to

- revenue ratios above. Dependi ng on the number of wastestreams affected at a plant and using the cost estimates developed by the Utility Water Act Group (UWAG):

 Cost for three plants potentially subject to Options 3a or 3b would be 4.8% to 13.1% of annual revenue.

 Costs for the 10 plan ts potentially subject to Option 3 would be 2.5% to 17.8% of annual

revenue.

 Costs for 13 plants potentially subject to Option 4 would be 1.7% to 17.8% of annual

revenue.
NRECA agrees with SBA that EPA’s certification of “no significant economic impact on small entities” lacks a factual basis, especially since EPA has withheld the underlying data supporting this determination. (See SBA comments section 1.B. Small Entity Costs Appear High, But the Record is Insufficient to Permit Analysis.)
Comment Response :
EPA notes that SBA has revised the size standards applicable to entities within NAICS code 2211 that generate, transmit or distribute electricity. The applicable size standards are no longer based on electricity sales, but are instead based on the numb er of employees. EPA conducted its RFA analysis for the final rule using these revised size standards. Chapter 8 of the RIA provides the details of how EPA identified the parent entity and categorized entities as small for the purpose of the RFA analysis. EPA identified a total of 29 to 49 cooperatives that own steam electric power plants to which the final ELGs apply. Of these only one cooperative wasEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 59 estimated to incur compliance costs of at least 1 percent of revenue. No cooperative was estimated to incu r costs of at least 3 percent of revenue.

Refer to comment EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A, Excerpt Number 1 (in comment code 28.e) and Excerpt Number 5 (in comment code 28.a) for EPA’s response to the concerns raised by SBA which were referenced by the comment er, including the convening of a SBREFA panel, lack of factual basis for the NO SISNOSE finding, and discussion of compliance costs and results for individual steam electric power plants.

Commenter Name: Dorothy Kellogg and Michael Leitman Commenter Aff

iliation: National Rural Electric Cooperative Association (NRECA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4565

- A1 Comment Excerpt Number: 19 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

The cost

- effectiveness of environmental regulations is particularly important to cooperatives since, unlike investor owned utilities that can spread costs to their investors as well as their rate payers, the cooperative economic model means that the G&T co sts are borne by their member

owners. Demographically, the member

- owners of the distribution cooperatives that own the nine G&Ts potentially affected by this proposal are older (17% are over 65 compared to 13% nationally), many living on fixed incomes, and live in:

 Non

- metropolitan counties (53% compared with 17% nationally);

 Households with incomes 17% lower than the national average;

 Mobile homes (16% compared to 6.5% nationally) which are generally less energy

efficient.
Energy costs can be a significan t expense for such households, and any increase needs to be well justified by improvements in environmental quality which EPA’s proposal does not provide.
Comment Response:

The commenter asserts that “the cost

- effectiveness of environmental regulations is particularly important to cooperatives” because “costs are borne by their member

- owners.” For the role of cost

- effectiveness in EPA’s decisions for the final rule, see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.
Regarding the commenter’s statements about how the demographics of member

- owners of their distribution cooperatives compare against national demographics, and that energy costs can be a “significant expense for such households,” EPA’s analysis of the propo sed rule found that the estimated rate effects were uniformly low across the electric power market regions. For the finalEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 60 rule, after considering public comments, EPA conducted a more detailed analysis to evaluate whether the small rate increases projected to result from the ELG will have significant impacts on households (see Section 7.4 in RIA document). This analysis shows that the incremental economic burden of the final rule on households is small both relative to income and relative to the baseline en ergy burden of households in different income ranges. Furthermore, while the incremental burden relative to income is relatively greater for low

- income households, this impact is still relatively small (maximum of 0.44 percent) and may be further moderated by existing pricing structures. For more about impacts on cooperatives, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1 (located in comment code 28.f)
Finally, EPA disagrees with the commenter’s assertion that the Agency failed to provid e information regarding “improvements in environmental quality” expected under the final rule. The Environmental Assessment and Benefit Cost Analysis describe in detail the environmental improvements projected to result from implementation of the final ELG s, and the societal benefits that these improvements will generate, including to the very member

- owners discussed by the commenter.

Commenter Name: Floyd Gilzow Commenter Affiliation: Missouri Joint Municipal Electric Utility Commission (MJMEUC) Docume nt Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4576

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Further we believe that EPA has not taken into full account that a signifi cant percentage of municipal electric utilities with coal

‐ fired power plants are qualified under the Small Business Regulatory Enforcement and Fairness Act (SBREFA). We ask that EPA consider all of the SBREFA implications as this rulemaking process moves f orward.
Comment Response:
EPA disagrees with the commenter’s statement that EPA did not take “into full account that a significant percentage of municipal electric utilities with coal

‐ fired power plants are qualified under the Small Business Regulatory E nforcement and Fairness Act (SBREFA).” First, the commenter did not provide a basis for its claim regarding a “significant percentage of municipal electric utilities.” Chapter 8 of the RIA describes how EPA identified parent entities, determined which enti ties are small, and estimated impacts to small entities under the final rule. EPA presented the cost

- to

- revenue analysis for small entities, providing the number and percentage of small entities projected to incur compliance costs greater than or equal to 1 percent and 3 percent. This analysis and interpretation of the results are consistent with RFA guidance to assess whether the final rule would have “a significant economic impact on a substantial number ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 61 small entities” (SISNOSE), as well as the approa ch used by EPA in developing a number of other industry effluent limitations guidelines and standards.

Commenter Name: Jim Weeks Commenter Affiliation: Michigan Municipal Electric Association (MMEA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4767

- A2 Comment Excerpt Number: 5 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA SHOULD SET A “SMALL GENERATING UNIT” THRESHOLD FOR APPLICABILITY OF BAT/PSES REQUIREMENTS AT 100MW
The Michigan munic ipal entities commenting here are potentially subject to the EPA Steam Power ELG Rule as follows:

o The Grand Haven Board of Light & Power owns and operates a coal

- fired electric generating unit with a nameplate capacity of 73 megawatts (MW) that uses a wet flue gas desulfurization system to control sulfur dioxide emissions.

o The Lansing Board of Water & Light owns and operates the coal

- fired Eckert Station, which has three potentially affected units including Unit 4 (66MW), Unit 5 (68MW), and Unit 6 (66 MW), as well as another coal

- fired plant known as Ericson Unit 1 (159MW).

o The Michigan South Central Power Agency (MSCPA) owns and operates a 55 MW coal

fired electric unit. This MSCPA units uses an electro

- static precipitator to manage particulates in the bo iler exhaust.
All three of these Michigan municipal entities are “small entities” under the Small Business Regulatory Enforcement Fairness Act (“SBREFA”), 5 U.S. C. 801 et seq. as all they each sell less than 4 million megawatt hours of electricity annuall y, and all three are also defined as “small” under the Michigan Administrative Procedures Act 306, Section 24.240 (a section dealing with “reducing disproportionate economic impact of rules on small business”).

Moreover, these non

- profit municipal entities and their small units are critical to their communities. Despite the small size of these systems and units, these municipal utilities are essential to electric reliability and energy supply diversity, and critical to the communities they serve. These pub lic power systems provide energy to important community facilities such as law enforcement, hospital, and educational buildings. These facilities increase electric reliability and help avoid wholesale electric market price spikes. They provide reactive pow er to the transmission grid, and serve “load pocket” areas in which there are limited available options for securing power. For the systems commenting here, the plants subject to EPA’s proposed rule are the core of the electricity system in the region, wit h no readily available alternatives within the service territory

– and if a plant shuts down or is made too expensive, it could cause aEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 62 community and business crisis. Localities like Grand Haven and MSCPA typically own and operate only one baseload plant, which means that municipal utilities do not have any flexibility to shift load among other units, as they would if they had a multi

- unit system.
In addition to these public power systems being small entities, the units they own and operate that could becom e subject to the EPA ELG rules are relatively small compared to steam electric generating units in the power sector. According to the Energy Information Administration’s 2011 assessment of “Operable Generating Units in the United States by State and Energy Source”, only 11% of coal

- fired units are between 50MW and 100MW. Of those approximately 158 units between 50MW

- 100MW in size, around 50 are owned and operated by municipal “small entities” under federal SBREFA standards, or less than one

- half of one per cent (0.04 percent) of all operating coal

- fired units.
It is clear, and EPA has recognized, that smaller entities and smaller units could bear disproportionate impacts from one

- sized

- fits

- all, technology

- forcing requirements. These small municipal systems have smaller plants, and control technology costs impose disproportionate impacts because of diseconomies of scale, because these systems have smaller customer bases upon which to pass the costs of controls, and because these municipalities have more limit ed capital financing options as compared to large, investor

- owned utilities.
EPA has recognized such disproportionate impacts on small entities. For example, under the Clean Water Act effluent limitations and guidelines program established under 33 U.S.C. Section 1311 et seq. , EPA has recognized the importance of mitigating impacts on small entities and sources that have a relatively minor impact on public health and the environment. In its 1987 regulation establishing effluent standards for organic chemicals and plastics and synthetic fibers, 52 Federal Register 42, 521 (November 5, 1987), EPA reduced the impact on small businesses from effluent guidelines by creating a cut

- off threshold for regulation specifically developed during the Regulatory Impact Analysis to reduce the impacts and threats of plant closure to small businesses

. In this instance, EPA applied Best Practicable Control Technology Currently Available (“BPT”) rather than Best Achievable Technology (“BAT”). EPA undertook a three

step approach in that ELG rulemaking to identify impacts from the rulemaking, assess ho w those impacts could particularly affect small entities, and then develop regulatory alternatives for small entities. See h ttp://water.epa.gov/s citech/wastetech/guide/ocpsf/upload/2007_10_22_guide_ocpsf_tdd

vol1.pdf.
EPA has also chosen to impose less stringent ELGs on small businesses in other rules, such as the effluent standards for meat and poultry products (69 Fed. Reg. 54,475, September 8, 2004),
EPA conveyed well how regulations could have disproportionate impacts on small businesses in the clean air context, a context that has impa cted these Michigan public power units substantially. In its “Guidance on Mitigation of Impact to Small Business While Implementing Air Quality Standards and Regulations,” EPA Policy Guidance a t www.epa.gov /ttn/oar/oarpg (April 18, 1998), and in a Regulatory Impact Analysis for the 8

- hour ozone standard, EPA recognized that:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 63 Small entities, all other factors being equal, generally have less capital available for purchase of add

- on pollution control technolog y than large entities. In addition, the control cost per unit of production for small entities will likely be higher than for large entities due to economies of scale. Thus, control measures requiring the use of add

- on control technology may cause small

en tities affected by State rules to experience disproportionate economic impacts compared to large entities if no strategies to mitigate potential small entity impacts are available for implementation by States. . . . Consequently, EPA is encouraging States to exercise regulatory flexibility for small entities when developing strategies to meet the standards adopted today. While some States may need to turn to small businesses for emission reductions, small businesses will likely be among the last sources the States will choose to control. States may consider controls on small businesses only if such businesses are a significant part of an area’s nonattainment problem and attainment cannot be reached through application of all available cost

- effective measure s to major sources. To the extent States consider controlling small businesses, EPA believes there are many ways States can mitigate the potential adverse impacts those businesses might experience. For example, States could choose to exempt or apply less

s tringent requirements to small businesses . . .. States could also extend the effective date for control requirements for small businesses . . . States could also choose to apply control requirements to other businesses first, before requiring them for sma ll businesses. 1

MMEA and Michigan public power are very pleased that EPA, in this proposed Steam Power ELG rule, has recognized the potentially significant impacts on small units that would be associated with meeting ELG requirements:

Small units are more likely to incur compliance costs that are disproportionately higher per amount of energy produced than those incurred by large units because they are not as able to take advantage of economies of scale. . . . Moreover, the record demonstrates that the amou nt of pollutants collectively discharged by small generating units is a very small portion of the pollutants discharged collectively for all steam electric power plants (e.g., less than 1 percent under Option 3). As a result, setting BAT limits equal to BP T for existing steam electric generating units with a capacity of 50 MW or less will have little impact on the pollutant removals for the overall rule. . . . EPA currently proposes a threshold of 50 MW rather than 25 MW because the proposed 50 MW threshold would do more to alleviate potential impacts. EPA recognizes that any attempt to establish a size threshold for generating units will be imperfect due to individual differences across units and firms. However, EPA believes that a threshold of 50 MW or les s reasonably and effectively targets those generating units that should receive different treatment based on the considerations described above. EPA requests comment on the proposed 50 MW threshold applicable to discharges of the wastestreams described und er each of the preferred options, and as well as other possible thresholds for small units.
In a real example, consider what the potential impact of the steam electric ELG on small units could be by considering the Grand Haven Board of Light and Power. Gra nd Haven has an annual revenue stream/budget of approximately $34.4 million. With EPA’s estimated cost of annual compliance of up to $6,440,000 for units in the 50

- 100MW range, the 68MW Sims unit in Grand Haven would have annual compliance costs under the Steam Electric ELG of nearly 20 percent of the entire budget of this public power system . Taken alone, and certainly in combination with the other EPA regulatory challenges facing Grand Haven’s plant, it is likely that the plantEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 64 would close. This would lea ve Grand Haven without a baseload option to serve its customers and businesses.

1 Ozone Regulatory Impact Analysis at pp. 11

- 27, 11

- 28, 11

- 29.
Comment Response:
Regarding the size classification of the three entities identified by the commenter, EPA n otes that the size determination for municipalities is based on population, not electricity generation. For the final rule analysis, EPA used U.S. Census data for 2013 to determine whether government entities are classified as small (population of 50,000 o r less) or not (population greater than 50,000). Based on Census figures, the city of Lansing, MI is not a small entity. Both Grand Haven Board of Light & Power and Michigan South Central Power Agency (MSCPA) are considered small entities, based on 2013 Ce nsus populations for Grand Haven and for the towns served by MSCPA, respectively.
As the commenter recognized, EPA considered whether it would be appropriate to establish differentiated requirements in the final rule based on, among other things, generatin g unit size. Like the proposed rule, the final rule establishes certain differentiated requirements for existing oil

- fired generating units and existing generating units with a nameplate capacity of 50 MW or less. The requirements for these generating un its, as well as the basis for establishing a size threshold of 50 MW, are explained in preamble Section VIII.C.12 and VIII.E. These differentiated requirements for existing “small” generating units are expected to reduce the potential impacts of the rule o n small entities and municipalities.
In accordance with the Clean Water Act, EPA determined that the final rule is economically achievable for the steam electric power generating industry as a whole. The final rule is projected to have a minimal impact on the industry. In particular, the final rule is projected to result in a net reduction of 843 MW in generating capacity as of model year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial) closu res and one plant (full) closure.
Finally, EPA appreciates the data offered by the commenter on potential impacts to the plant owned by Grand Haven Board of Light and Power. EPA’s considered this information in conducting the analyses for the final rule.

Commenter Name: Theresa Pugh Commenter Affiliation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Resp onse: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 65 Comment Excerpt:
APPA also notes that a significant percentage of electric utilities with coal

- fired power plants are qualified under the Small Business Regulatory Enforcement and Fairness Act (SBREFA). APPA asks EPA to consider the SBREFA impli cations of this rulemaking. While no SBREFA Small Entity Representative (SER) panel was convened on this important rulemaking, APPA believes that there are ways that the EPA could address small entity concerns about costs, operational conditions, and setti ng reasonable regulatory deadlines that do not harm the integrity of the CWA and the Effluent Limitations Guidelines (ELG) program. APPA disagrees with EPA’s certification in the proposed rule that the proposal will not have a significant economic impact on small entities under the Regulatory Flexibility Act (RFA) EPA should have convened a Small Business Regulatory Fairness Act (SBREFA) panel.
Comment Response:

Refer to comment EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A, Excerpt Number 1 (in comment code 28.e) and Excerpt Number 5 (in comment code 28.a) for EPA’s response to the concerns raised by SBA which were referenced by the commenter, including the number of plant owners quantified under SBREFA, convening of a SBREFA panel, lack of factual basis for the NO SIS NOSE finding, and discussion of compliance costs and results for individual steam electric power plants.
Regarding ways that the EPA could address small entity concerns, as explained in the preamble to the final rule, the differentiated BAT/PSES requiremen ts for oil

- fired generating units and units of 50 MW or less will alleviate some of the concerns raised by small entities by reducing the number of small entities incurring costs to meet the ELG requirements. Regarding regulatory deadlines, as described in the preamble for the final rule, as part of the consideration of the technological availability and economic achievability of the BAT limitations in the rule, EPA considered the magnitude and complexity of process changes and new equipment installations t hat would be required at facilities to meet the rule’s requirements. Where BAT limitations in this rule are more stringent than previously established BPT limitations, those limitations do not apply until a date determined by the permitting authority that is as soon as possible beginning November 1, 2018 (approximately three years following promulgation of this rule), but that is also no later than December 31, 2023 (approximately eight years following promulgation). See Sections VIII and XVI of the preamb le to the final rule for details on the timing of implementation of the final rule.

Commenter Name: Theresa Pugh Commenter Affiliation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Numbe r: 41 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 66 Comment Excerpt:
EPA Certification of No Significant Economic Impact on Small Entities Lacks a Factual Foundation and Transparency, and Appears to be Incorrect
The agency certifies that this proposal will not have significant economic impact on a substantial number of small entities. 5 The same analysis showed some significant costs for a large fraction of plants owned by municipalities, of unknown size. Given the hundreds of small entity owners that could be affected this number is too low. Therefore, EPA should have convened a SBREFA panel.
This analysis, found in Chapter 8 of the May 2013 Regulatory Impact Analysis (RIA) does not, in our view, comply with the RFA requirements to provide a “statement providing the factual basis for such certification” 6 because the agency has withheld the underlying data supporting this determination. To our knowledge EPA has not revealed which plants will have compliance costs, which plants with costs have small entity owners, and what those costs are, or the revenues that such plants have to address those costs. This makes it impossible to verify EPA’s underlying data, estimated values and calculations. APPA does not have the k nowledge to identify these plants or estimate these costs without record information. EPA would likely not be revealing confidential business information (CBI) about these or other plants as long as it provided information in some redacted form. Model plan t costs would adequately serve commenters’ needs. EPA should identify the plants with costs, by plant ID, and provide the approximate costs, revenues, or at least electric generation rates. This data should be fairly readily available for virtually all pla nts, which should allow for the cost/revenue comparison to be calculated and compared with EPA evaluation.

5 78 Fed. Reg. 34432, 34530 (June 7, 2013)

6 U.S.C § 605(b).
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 23Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 67 28.f. Econ

– Electricity rate and household impacts

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Many calculations in the analysis supporting the regulatory proposal are so poorly carried out that they are misleading.

 One example of poor calculation, concerning the e stimation of electricity demand by house holds:

To calculate average annual electricity sales per household, EPA divided the total quantity of res idential sales...for 2009 in each... region by the number of households in that region...For this analysis, EP A assumed that the average quantity of electricity sales per house hold by NERC region would remain the same in 2014 as in 2009. 9

Why make this assumption? It is most unlikely that electricity consumption would show that pattern. This is just a simple, alt hough important, element in the body of analysis, which is fatally flawed by poor quantification.

9 EPA, Regulatory Impact Analysis, Section 7.3.1.
Comment Response:
EPA cannot respond to the commenter’s general claim that “many calculations” in the Agency’s analysis “are so poorly carried out that they are misleading” because the statement lacks any specificity that could serve as the basis for a response.
EPA disagrees with the commenter’s statement that assuming that electricity sales per household , by NERC region, would remain the same in 2014 as in 2009 makes the resulting electricity rate impact analysis “fatally flawed by poor quantitation.” While EPA acknowledges that there is some uncertainty in the electricity rate impact analysis due to the use of historical residential consumption data to infer future residential consumption, EPA used the best data available for its analyses of the final rule. For the electricity rate impact analysis, EPA used residential consumption data from the U.S. Depar tment of Energy’s Energy Information Administration (EIA) Form EIA

- 861. At the time EPA conducted the analysis of the proposed rule, the most recent data available was for 2009. For the final rule, EPA updated the information to use the most recent values, which are for 2012. EIA publishes separate projections of total residential consumption by household at the national

- level, but not at the regional

- level or state

level. EPA did not identify alternate projections of future residential consumption by NERCEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 68 regions and determined that making such projections would introduce additional and unnecessary uncertainty in the analysis. EPA notes that the commenter also did not provide a recommended alternative source of future residential consumption.

Furthermore, t he data show that assuming level residential consumption data is reasonable. For example, EIA data for the 2014 Annual Energy Outlook (AEO) projects a declining trend in residential electricity consumption per household at the national level, with a total decline of less than 4 percent between 2012 and 2040 (See Annual Energy Outlook 2014: Reference case; DOE 2014, available at http://www.eia.gov/forecasts/aeo/MT_residentialdemand.cfm). The projected annual electricity demand for the average household will be 11.6 MWh in 2040, which is very close to the 11.3 MWh reported in the 2009 Residential Energy Consumption Survey. While regional patterns may differ from the national trend, EPA concluded that the using 2009 residential consumption data in estimating 20 14 electricity rate impacts is a reasonable assumption and that the resulting analysis provides an informed assessment of the impacts of the final ELGs on rate payers. Likewise, EPA concluded that using the updated 2012 data to estimate electricity rate im pacts in 2015 for the final rule is also reasonable.
EPA notes that the electricity market analyses conducted using the Integrated Planning Model (see Chapter 5 in the RIA document) incorporate demand projections from the 2013 Annual Energy Outlook, as wel l as other projected changes affecting the electricity market (generation capacity, environmental regulations, etc.). These analyses also show small impacts from the final rule across the range of metrics analyzed, including production costs and wholesale electricity prices.

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 13 External Review Flag: No External Review External Revie w Incorporated into Response: No
Comment Excerpt:

 It is difficult to unearth some of the important conclusions in this regulatory proposal. For example, it will cost the average household between nothing and $7.22 on an annual electricity bill, depending on location and exactly what is done. Why can't this sort of information be more prominently recorded?
Comment Response:
EPA disagrees with the commenter that “important conclusions” are “difficult to unearth” in the rulemaking record, including informa tion about impacts on an average household electricity bill. The results of EPA’s analyses are prominently featured in the preamble for both the proposedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 69 and final rules, and EPA’s analysis of impacts on residential electricity prices is further discussed in detail in Chapter 7 of the RIA report.
For the final rule, as detailed in the RIA, EPA estimated that the annual electricity bill of an average household will increase between $0 and $2.67, depending on the region, with the average U.S. ratepayer seeing an increase of $1.42 per year (Table 7

- 3; Option D). This estimate is based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstatement of the potential impact of the final rule.

Commenter Name: Leonard F. Hopkins Commenter Affiliation: Southern Illinois Power Cooperative (SIPC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4309

- A1 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Southern Illinois Power Cooperative believes that curtailing economic costs is perhaps the most significant issue to consider in addressing the nation’s energy and emission control objectives. The nation is still suffering through one of the worst economic downturns since the Great Depression. Most sectors of the economy are facing rising costs and lower economic output. It is simply not approp riate to institute a regulatory program at this time that would impose even higher energy costs on American businesses and consumers.

As a consumer

- owned electricity supplier, Southern Illinois Power Cooperative understands that reliable, affordable electr icity has been one of the key drivers of economic growth and prosperity in this country. That fact must not be forgotten as the agency makes decisions on this and future potential rulemakings.
Comment Response:
EPA disagrees with the commenter’s suggestion that the final rule will adversely affect the national economy. As reported in the RIA, the estimated total annual social cost of the final rule ($479.5 million at a 3 percent discount rate) is very small in re lation to the total economy

– less than 0.01 percent of GDP in 2014. EPA determined that the final rule is economically achievable for the steam electric industry as a whole. In particular, the final rule is projected to result in a net reduction of 843 MW in steam electric generating capacity (0.2 percent of the baseline capacity) as of model year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial) closures and one plant (full) closure. EPA ass esses that these retirements are inconsequential relative to total national and regional generating capacity. Furthermore, these retirements are offset by increased capacity for other plants. As a result, the final rule will not significantly affect electr ic supply reliability

– either nationally or by NERCEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 70 region. Furthermore, EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents, with costs by NERC region ranging from 0.000 cents per kWh to 0.027 cents per kWh. This estimate is based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstate ment of the potential impact of the final rule. Accordingly, EPA disagrees that the rule will effect economic recovery.

Commenter Name: Lisa C. Messinger Commenter Affiliation: Vectren Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4317

- A1 C omment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Vectren, through its utility subsidiary Southern Indiana Gas and Electric Company (SIGECO) is the owner operator of a ver tically integrated electric utility with 1200 MWs of generating capacity headquartered in Evansville, Indiana. More specifically, Vectren owns and operates two coal

- fired power plants 1 and co

- owns another electric generating unit 2 in southwest Indiana. Moreover, as an Indiana utility, Vectren's generating portfolio is predominantly coal

- fired, and as such , Vectren's customers could be disproportionately impacted by a final rule that forces significant changes in the operation or the fly ash, bottom a sh, and FGD wastewater systems. Thus Vectren's generating facilities, and more importantly

- its ratepayers, may be significantly impacted by the proposed rules.

1 A.B. Brown Generating Station in Posey County and F.B. Culley Generating Station in Warrick County

2 One

- half of Unit 4 at Warrick Generating Station, Warrick County
Comment Response:
EPA disagrees with the commenter that its “generating facilities, and more importantly

– its ratepayers, may be significantly impacted” by the final steam electr ic ELGs. First, EPA determined that the final rule is economically achievable for the industry as a whole. The final rule will have little impact on the steam electric industry. In particular, the final rule is projected to result in a net reduction of 843 MW in steam electric generating capacity (0.2 percent of the baseline capacity) as of model year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial) closures and one plant (full) closure.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 71 Seco nd, as part of both the proposed and final rule analyses, EPA evaluated the potential impacts of the rule on customers. As documented in the RIA, EPA’s analysis found minimal impact on electricity rates from the final rule. As reported in Chapter 7 of the RIA, EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents, with costs by NERC region ranging from 0.000 cents per kWh to 0.027 cents per kWh. Costs in the ReliabilityFirst Corporatio n NERC region, where SIGECO operates, were estimated at 0.027 cents per kWh. This estimate is based on a conservative assumption of 100 percent pass

through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstatement of the potential impact of the final rule.
In response to comments EPA received on the proposed ELG, the Agency also looked at the distribution of the impacts of the final ELG across households. This ana lysis shows that the incremental economic burden of the final rule on households is small both relative to income and relative to the baseline energy burden of households in different income ranges. Furthermore, while the incremental burden relative to inc ome is relatively greater for low

- income households, this impact is still relatively small (maximum of 0.44 percent) and may be further moderated by existing pricing structures (see Section 7.4 of the RIA for details).

Commenter Name: Lisa C. Messinger Commenter Affiliation: Vectren Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4317

- A1 Comment Excerpt Number: 3 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Vectren is committed to sustainable and responsible operation of our coal fired units. This corporate decision, however, comes at a financial cost which our customers must bear.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4317

- A1, Excerpt Number 1.

Commenter N ame: Mark Thoma Commenter Affiliation: Otter Trail Power Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4446

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 72 Comment Excerpt:

O tter Tail is concerned that the proposed ELG revisions could result in more costs for our ratepayers.
Comment Response:
In response to the commenter’s concern that the final rule will result in “more costs for our ratepayers,” EPA conducted analyses that demonstrate that the final rule will have minimal impact on electricity rates. As part of both the proposed and final rule analyses, EPA evaluated the potential impacts of the rule on customers. As reported in Chapter 7 of the RIA, EPA estimated the poten tial increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents, with costs by NERC region ranging from 0.000 cents per kWh to 0.027 cents per kWh (for the scenario without CPP; the impacts are even smaller when cons idering the scenario with CPP). Costs in the MRO NERC region, where Otter Trail operates, were estimated at 0.014 cents per kWh. This estimate is based on a conservative assumption of 100 percent pass

through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstatement of the potential impact of the final rule.
In response to comments EPA received on the proposed ELG, the Agency also looked at the distribution of the impacts of the final ELG across households. This analysis shows that the incremental economic burden of the final rule on households is small both relative to income and relative to the baseline energy burden of households in different income ranges. Furth ermore, while the incremental burden relative to income is relatively greater for low

- income households, this impact is still relatively small (estimated at 0.1 percent in North Dakota, which is within the service area of Otter Trail Power Company) and may be further moderated by existing pricing structures (see Section 7.4 of the RIA for details).
In response to comments EPA received on the proposed ELG, the Agency also looked at the distribution of the impacts of the final ELG across households. This anal ysis shows that the incremental economic burden of the final rule on households is small both relative to income and relative to the baseline energy burden of households in different income ranges. Further, while the incremental burden relative to income i s relatively greater for low income households, this impact is still relatively small (estimated at 0.1 percent in North Dakota, which is within the service area of Otter Trail Power Company) and may be further moderated by existing pricing structures (see Section 7.4 of the RIA for details).

Commenter Name: John McManus Commenter Affiliation: American Electric Power System (AEP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1 Comment Excerpt Number: 84 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 73 Comment Excerpt:
Any costs that aren’t fully amortized will need depreciation adjustment to align with plant retirement dates, elevating the annualized cost impact of the rule. Aligning cost recovery with customers who receive the benefits of service is vitally important for regulatory commissions in order to not unfairly burden future customers with costs for which they do not receive any service benefit.

[...]
Additionally, EPA wrongly claims that the scr eening analysis makes a “counterfactual, conservative assumption of zero cost pass

- through to customers.” 48 While this position is less than conservative considering that recovery for environmental investment for utilities in regulatory proceedings is highly probable, it fundamentally neglects the consideration of downstream effects to customers that will inevitably result in higher electricity prices in a downtrodden economy and demonstrates that EPA further underestimates the real societal impact associated with this rule. Regulated entities are entitled to a fair return on their investment, and such a return will be borne by, and burden, customers in a much higher degree than EPA’s analysis describes. Such costs that are not considered in EPA’s cost

- effective analysis underestimate the expected actual mitigation cost that will be charged to utility customers in any modeling considerations. Absent regulatory treatme nt, merchant customers will still bear the burden of this rule manifesting in higher electricity prices to cover the exorbitant costs associated with implementing these proposed guidelines.

5. Assessment of the Impacts in the Context of Electricity Ma rkets
Based on AEP’s cost estimate, EPA has significantly underestimated the compliance costs of this rule. If EPA’s modeling underestimates the real costs borne by a utility’s customers in complying with this rule in its IPM modeling, there will be a gre ater number of incremental closures with associated reduction in overall generating capacity, likely supplanting lower

- cost power with higher

- cost power. EPA notes, 49 that its key inputs for the model include the capital, annual fixed O&M, and annual variable O&M costs.

49 EPA Regulatory Impact Analysis, April 2013, at 6

- 8.
Comment Response:
With respect to the commenter’s statement related to (1) the length of the depreciation period for some plants that may have a relatively short remaining useful life, and (2) analysis of impacts on consumers from the pass through of compliance costs from regulated entities to consumers to ensure fair returns, please see the resp onse to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1, Excerpt Number 70 (in comment code 28.b).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 74 In addition, with respect to the commenter’s statement regarding the need for “depreciation adjustment to align with plant retirement dates” in the cost analysis for the fin al rule, EPA recognizes that some plants may be set to retire within the next few years. The final rule accounts for announced plant retirements expected to occur before plants would have to meet the final limitations and standards. For BAT limitations tha t are more stringent than previously established BPT limitations, the final rule allows permit writers to establish a date on which the final limitations apply, which must be as soon as possible beginning November 1, 2018, but no later than December 31, 20 23. EPA does not expect that plants that have announced closures within this period will incur any costs to meet the final ELGs.
Regarding the cost

- effectiveness analysis, EPA notes that the calculation is based on total compliance costs. For the role of c ost

- effectiveness in EPA’s decision for the final rule, s ee DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.
Regarding the analysis of impacts in the context of electricity markets, the commenter is correct in noting that the Integrated Planning Model (IPM) policy scenario results are based on the same ELG compliance costs used in other analyses (with necessary adjustments to make the compliance costs compatible with IPM, such as adjusting the dollar year). EPA revised compliance cost es timates for the final rule based on public comments and used these revised costs to analyze the impacts of the final ELGs on the electricity market overall, and on the steam electric generating units in particular. The results show small impacts across all metrics analyzed (see Chapter 5 of the RIA for details) and support EPA’s determination that the final rule is economically achievable (see preamble Section VIII.C.9 for discussion).

Commenter Name: Tom DeLawrence Commenter Affiliation: PowerSouth Ene rgy Cooperative Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

As a not

- for

- profit rural electric generation and tr ansmission cooperative, PowerSouth was chartered to provide reliable electric service to our distribution cooperative member

- owners at the lowest reasonable cost. In addition to being overwhelmingly smaller than most electric utilities, PowerSouth and othe r electric cooperatives operate under a different economic model from investor

- owned and municipal utilities. PowerSouth is owned by the member distribution cooperatives we serve, which means our operating costs

– including costs to comply with environment al regulations

– are directly borne by cooperative members, mostly rural residential consumers, directly through increased utility rates. On a national scale, mean household income for rural electric cooperatives is 17% less than the U.S. average household income, with the average poverty rate for cooperatives being 10% higher than the national poverty rate. Additionally, cooperatives serve only 5.4 consumer

- members per mile of electric line, comparedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 75 to the national average of investor

- owned utilities of 3 4 consumers per mile of line. Largely because of this lower density, most cooperatives, including PowerSouth’s members, already have electricity rates higher than those of our nearest investor

- owned utilities.
Comment Response:

The commenter states that its operating costs, “including costs to comply with the environmental regulations” are directly borne by cooperative members, who are demographically different in terms of household income and location from the national average. EPA notes that the comment er provided no direct information or data showing that electric cooperatives, as an ownership category, would incur impacts under the final steam electric ELGs that are disproportionately greater than that of other ownership categories. EPA does not agree that the business profile of electric cooperatives in terms of a requirement to pass through compliance costs in electricity rates is somehow different from other categories of ownership in terms of potential for impacts as a result of the final rule. Much of the generating capacity to which the final rule applies (65 percent) continues to operate under a rate regulation framework, in which costs are passed forward in rate increases to electricity customers (see Section 2.5 in RIA document). Customers of el ectric cooperatives will experience similar rate effects to those experienced by the customers of regulated utilities and municipally owned generators that incur costs as a result of the final rule: both of these categories of generators will pass forward essentially all compliance costs to their customers. EPA also notes that estimated rate effects are uniformly quite low by electric power market region (see Chapter 7 in RIA document).
EPA also does not agree that electric cooperatives who may have “fewer” customers would be disproportionately impacted as a result of the final rule. EPA notes that the scale of compliance costs under the rule generally increases in an approximately proportional manner to the size of steam electric generating units and presumably the customer base that they serve. As a result, just because electric cooperatives have a smaller generation and customer base does not mean that their customers will incur disproportionately higher rate effects. In addition, the commenter points out that electric cooperatives have very low customer density on an areal basis. EPA does not agree that t his operating profile would somehow lead to disproportionately higher rate effects. The final rule applies to steam electric generating units, not electric power distribution systems; customer density on an areal basis will have no effect on the costs incu rred by those customers.
For the final rule, EPA found that electric cooperatives, like other categories of ownership for regulated facilities, will generally incur low costs relative to their baseline revenue. In particular, only one cooperative is estima ted to incur costs of 1 percent or greater of revenue, and no cooperative incurs costs of 3 percent or greater (see Table 4

- 2 in RIA document); the remaining 28 to 48 cooperatives that own steam electric power plants (92 to 97 percent) incur costs below 1 percent of revenue. This finding is almost identical to the finding for all ownership categories, where EPA estimates that 96 to 98 percent of owners of regulated facilities will incur costs of less than 1 percent of revenue under the final rule. Based on this analysis, EPA does not agree that electric cooperatives, as an ownership category, will incur costs that are systematically higher than those of other ownership categories.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 76 Finally, EPA’s analysis found minimal effect on electricity rates from the fin al rule. As reported in Chapter 7 of the RIA, EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents per kWh, with costs of 0.019 cents per KWh in the SERC NERC region where the commen ter operates (see Table 7

- 1). This estimate is based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstat ement of the potential impact of the final rule. In response to other comments EPA received on the proposed ELG, the Agency also looked at the distribution of the impacts of the final rule across households in different income ranges. This analysis shows t hat the incremental economic burden of the final rule on households is small both relative to income and relative to the baseline energy burden of households in different income ranges. Furthermore, while the incremental burden relative to income is relati vely greater for low

- income households, this impact is still relatively small (maximum of 0.44 percent) and may be further moderated by existing pricing structures (see Section 7.4 of the RIA for details).

Commenter Name: Tom DeLawrence Commenter Affili ation: PowerSouth Energy Cooperative Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1 Comment Excerpt Number: 89 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition to being overwhel mingly smaller than most electric utilities, PowerSouth and other electric cooperatives operate under a different economic model from investor

- owned and municipal utilities.
Comment Response:
See response to comments EPA

- HQ

- OW

- 2009

- 0819

- 4565

- A1, Excerpt Number 19 (in comment code 29.e) and EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1.

Commenter Name: Jay Hudson Commenter Affiliation: Santee Cooper Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4476

- A1 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 77 In the proposal, EPA evaluated costs and determined that utilities should not have to increase electricity rates; however it appears that most utilities would have to inc rease rates in order to recover the incurred costs.Since we are a cost of service utility, all costs for compliance will be shared directly by our customers.
Comment Response:
EPA disagrees with the commenter’s claim that, for either the proposed or fina l rule, EPA “determined that utilities should not have to increase electricity rates.” As reported in Chapter 7, EPA evaluated the impact of compliance costs on electricity rates assuming a worst case in which 100 percent of compliance costs would be passe d through to consumers. Based on this analysis, EPA estimated an increase of 0% to 0.2% in electricity rates to residential consumers, depending on the region, and a national average increase of 0.11% (see Table 7

- 2 of the RIA; Option D). Therefore, while EPA acknowledges the commenter’s claim that the costs of compliance may be directly shared with customers, EPA’s analyses show that any resulting increase would be low.

Commenter Name: Vicki Card Commenter Affiliation: Colorado Springs Utilities Docume nt Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4483

- A1 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Since Colorado Springs Utilities is a non

- profit entity, these combined c osts will be passed along to our ratepayers.
Comment Response:
EPA understands that some of the costs of compliance are passed on to consumers, depending on rate regulations, and that, in the case of Colorado Springs Utilities, the impact to consumers m ay be the full cost of compliance. As part of both the proposed and final rule analyses, EPA evaluated the potential impacts of the rule on customers. As documented in Chapter 7 of the RIA document, EPA’s analysis found that costs associated with the final rule will have a small effect on electricity rates. EPA estimated that the compliance costs correspond to increases in the average monthly household bill of $0.12 for the average U.S. household, and $0.01 for the average household in the WECC NERC region where Colorado Springs Utilities operate. This is based on an assumption that 100 percent of the compliance costs are passed on to consumers.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 78 Commenter Name: Michael G. Cashin Commenter Affiliation: Minnesota Power (MP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4484

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
MP’s northern location and high percentage of industrial customers who operate around

- the

clock make MP a winter

- peaking utility. Thirteen large power customers (requiring at least 10 megawatts of generating capacity) purchase about half the electricity MP sells. Considering MPs high percentage of industrial customers who are high energy users and st ruggling to compete in a competitive global market economy, we are concerned that any further restrictions applicable to our facilities be implemented with reasonable timeframes and cost to minimize adverse impacts on our customers.
Comment Response:

EPA acknowledges the commenter’s concern that the regulation may affect industrial energy consumers. EPA cannot share particular data on how MP’s operation and customers may be affected by the final rule since data supporting the analysis were classified as c onfidential business information but notes that, as part of the impact analysis reported in Chapter 7 of the RIA report, EPA estimated potential rate impacts by customer class for each NERC region. This analysis assumed that regulated facilities would pass through all of their compliance costs under electricity rate regulation procedures, which is not accurate for all States, and thus very likely overstates the potential rate impact of compliance outlays. For industrial customers, EPA estimated an average n ational increase of 0.21 percent, with the highest impact in the SERC region (0.34 percent). EPA assesses that these very small rate increases will have a minimal impact on industrial facilities, regardless of the amount of electricity they purchase.

With regard to the commenter’s statement that it is “concerned that any further restrictions applicable to our facilities be implemented with reasonable timeframes and cost,” EPA notes that the ELG rulemaking process provided significant advance notice to poten tially affected entities to evaluate the potential impacts of any new ELG requirements on their operations. As described in the preamble for the final rule, EPA also provided considerable flexibility and time for facility owners to implement any changes to such operations to meet the final limitations and standards. The Agency specifically considered the timing of requirements for other environmental regulations in the ELG to provide affected plants ample time to consider their strategy to implement any nee ded changes. See Sections VIII and XVI of the preamble to the final rule for details on the timing of implementation of new requirements. Moreover, EPA notes that the final rule is affordable for the industry as a whole. See Section VIII.C.9 of the preambl e.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 79 Commenter Name: Joseph G. Eutizi Commenter Affiliation: San Miguel Electric Cooperative, Inc. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4485

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
San Miguel has a significant interest in the outcome of this rulemaking. San Miguel’s lignite fired electric generating facility is a major source of electrical generation to our member cooperatives, under long term wholesa le power contracts for 100% of the output of the San Miguel Generating Station. Being not

- for

- profit, San Miguel will be forced to pass along, to its

consumer

- owners, all costs of meeting any new requirements that may result from the implementation of thi s proposed rule.

As a member

- owned electricity supplier, San Miguel understands that reliable, affordable electricity has been one of the key drivers of economic growth and prosperity in this country. This fact must not be forgotten as the EPA makes decisi ons on whether and how to regulate electric generating units under this and future potential rulemakings.
Comment Response:
EPA understands that some regulated entities might pass compliance costs through to customers as electricity rate increases and ac counted for this potential in analyzing the impacts of the final Steam Electric ELGs. EPA assessed the potential impact of increased ratepayer charges under the assumption that all costs will be passed through regardless of the regulated status or other

co nsiderations that could mitigate ratepayer impacts. Under this assumption, EPA found that the final rule would increase electricity costs to households by approximately 0.013 cents per kWh, representing an increase of $1.42 per year for the average U.S. ho usehold. For industrial and commercial consumers, EPA found that costs would increase by approximately 0.21 percent and 0.14 percent, respectively, relative to baseline rates. Estimated increases are even smaller in the TRE region where San Miguel operates . EPA judges these projected increases to be minimal impacts to electricity customers.
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1 for a discussion of considerations specific to cooperatives.

In addition, EPA determined that the final rule is economically achievable for the steam electric industry as a whole and will have minimal effect on generating capacity. In particular, the final rule is projected to result in a net reduction of 843 MW in steam electric generating capacity (0.2 pe rcent of the baseline capacity) as of model year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial) closures and one plant (full) closure. EPA assesses that these retirements are inconsequenti al relative to total national and regional generating capacity. Furthermore, these retirements are offset by increased capacity forEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 80 other plants. As a result, the final rule will not significantly affect electric supply reliability

– either nationally or b y NERC region.
Finally, EPA estimated that total annual costs of the final rule would be less than 0.01 percent of Gross Domestic Product (based on comparison of the estimated total annual cost in 2014 dollars to GDP for 2013). Given the very small cost of the final rule in relation to the total value of goods and services produced in the U.S. economy, EPA judges that the Steam Electric final rule will not materially impair performance of the nation’s economy.

Commenter Name: Quinlan J. Shea III Commente r Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 126 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

To avoid and minim ize such adverse consequences, any final steam electric ELG rule needs to meet three objectives: (1) it should be based on accurate, representative data and sound analyses; (2) it should include only cost

- effective requirements; and (3) it should provide for flexible implementation and reasonable compliance deadlines. Such objectives will help to ensure net benefits, minimize unnecessary costs, and allow plant owners to make rational decisions taking into account all the new air, water, and solid waste re gulations. Meeting these objectives will help to ensure that electricity rates remain reasonable and electricity supply and delivery remains reliable as the electric power industry transitions to a more modern, lower emissions fleet. Unfortunately, the pr oposed rule does not meet these objectivesy proposed a rule to control greenhouse gas emissions from electric utilities.
Comment Response:
EPA generally agrees with, and views the final steam electric ELGs as meeting, the first and third “objectives” sta ted by the commenter

– that the rule “be based on accurate, representative data and sound analyses” and that “it should provide for flexible implementation and reasonable compliance deadlines.” Regarding the second “objective,” cost

- effectiveness, please s ee response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h

. for the role of cost

- effectiveness in EPA’s decisions for the final rule.
With respect to the commenter’s statement about basing the rule on “accurate, representative data and sound analyses,” the commenter did not provide any specific examples of where it thinks that the rule is not based on such data and analyses. EPA’s data sources and analytical methodologies are discussed in great detail elsewhere in the rulemaking reco rd.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 81 With respect to the commenter’s statement that the final rule “should provide for flexible implementation and reasonable compliance deadlines,” EPA notes that the ELG rulemaking process provided significant advance notice to potentially affected entiti es to evaluate the potential impacts of any new ELG requirements on their operations. As described in the preamble for the final rule, EPA also provided considerable flexibility and time for facility owners to implement any changes to such operations to me et the final limitations and standards. The Agency specifically considered the timing of requirements for other environmental regulations in the ELG to provide affected plants ample time to consider their strategy to implement any needed changes. See Secti on VIII of the preamble to the final rule for details on the timing of implementation of new requirements.
Regarding the commenter’s statement about ensuring that “electricity rates remain reasonable and electricity supply and delivery remains reliable,” a s noted in the proposed rule support documents, and now in the final rule support documents, the analyses for the rule clearly show that electricity rates will remain reasonable and that the ELG is not projected to cause supply and delivery reliability iss ues (see RIA for more details). The preamble to the final rule provides EPA’s justification for establishing the final limitations and standards, including its determination that the final rule is economically achievable.

Commenter Name: Steve Jackson Commenter Affiliation: Alliant Energy Corporate Services, Inc. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4516

- A2 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

All iant Energy has performed a high level impact evaluation of the proposed rule. The cost to comply with the proposed bottom ash requirements, and associated pond closure, are not insignificant and will have a considerable impact on our ratepayers.

Comment R esponse:
The commenter does not provide data to quantify its claim that the costs of the final rule would be “not insignificant,” nor does the commenter provide an information supporting its claim that there would be a “considerable impact” associated wi th bottom ash requirements under the final rule. The final rule, which is based on Option D and (except for certain existing “small” and oil

fired generating units) establishes a zero discharge requirement for bottom ash transport water, will have estimate d annualized social costs of $479.5 million (at 3 percent discount). EPA determined that while these costs are not insignificant, they are economically achievable for the steam electric industry as a whole. The rule is projected to have minimal impacts on the industry. In particular, the final rule is projected to result in a net reduction of 843 MW in steam electric generating capacity (0.2 percent of the baseline capacity) as of model year 2030, reflecting fullEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 82 compliance by all plants, which corresponds to a net effect of two generating unit (partial) closures and one plant (full) closure (see preamble Section VIII.C.9).
See responses to related comments regarding EPA’s assessment of the impacts of the final ELGs on ratepayers (e.g., DCN EPA

- HQ

- OW

- 2009

- 08 19

- 3920

- A1, Excerpt Number 156; EPA

- HQ

OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1). As detailed in these responses and in Chapter 7 of the RIA, the impact of the final ELGs on ratepayers is expected to be minimal.
Finally, EPA notes that the final rule establi shes effluent limitations and standards for discharges of pollutants. It does not require “pond closure,” as the commenter states.

Commenter Name: Floyd Gilzow Commenter Affiliation: Missouri Joint Municipal Electric Utility Commission (MJMEUC) Documen t Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4576

- A1 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
5. Finally the proposed rule does not appear to consider the cost to elect ric consumers for purchase of more expensive power during the time that units are not available because of retrofit. This is especially concerning due to the fact that this rule is planned to be implemented shortly after mandatory retrofits under the Mercu ry and Air Toxics Standards retrofit which may also boost the cost of interim electric power.
Comment Response:
The final rule is not projected to result in any incremental generation downtime. The timing for implementation of the rule provides considera ble flexibility for any changes that plants decide they need to make to meet the final limitations and standards. Section 7 of the TDD provides more details about the timing that may be required for the installation or conversion of certain equipment to me et the final limitations and standards.

Commenter Name: Kevin D. Frizzell Commenter Affiliation: Owensboro Municipal Utilities (OMU) Elmer Smith Station (ESS) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4683

- A2 Comment Excerpt Number: 13 External Re view Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 83 All new costs due to the environmental regulations forthcoming will result in increased electricity rates for our customers.
Comment Response:

For a response to the expected impact on electricity rates, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2, Excerpt Number 16.
In response to the commenter’s concern about “all new costs due to the environmental regulations forthcoming,” EPA notes that it made every effort to appro priately account for other relevant rules in its many analyses for this rule. The preamble and supporting documents describe how EPA accounted for the effects of other rules, such as the Cooling Water Intake Structures rule for existing facilities, the Coa l Combustion Residuals (CCR) rule, the Clean Power Plan (CPP) rule, and the Carbon Pollution Standard for New Power Plants (CPS) rule.

Commenter Name: Theresa Pugh Commenter Affiliation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
All new costs due to the proposed rule (whether for effluent discharge controls or for waste management) might result in increased electricity rates. Public power or community

- owned utilities pass through all costs to the consumer.
Comment Response:
EPA understands that some of the costs of compliance are passed on to consumers, depending on rate regulations, and that in many cases the impact to consumers may be the full cost of compliance. As part of both the proposed and final rule analyses, EPA evaluated the potential impacts associated with the rule on customers. As documented in Chapte r 7 of the RIA, EPA assessed the potential impact of increased ratepayer charges under the assumption that all costs will be passed through regardless of the regulated status or other considerations that could mitigate ratepayer impacts. Under this assumpt ion, EPA found that the final rule would increase electricity costs to households by approximately 0.013 cents per kWh, representing an increase of $1.42 per year for the average U.S. household. For industrial and commercial consumers, EPA found that costs would increase by approximately 0.21 percent and 0.14 percent, respectively, relative to baseline rates. EPA judges these small cost increases as not likely to pose an undue burden on electricity customers.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 84 Commenter Name: Theresa Pugh Commenter Affili ation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 53 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In the proposal, E PA evaluated costs and determined that utilities should not have to increase electricity rates. However, through our assessment of member utilities, we believe that most utilities will in fact have to resort to increasing electricity prices in order to re cover the cost suffered. It would be difficult for a public power utility to avoid increasing rates to comply with additional regulations because there is no profit margin from which the additional compliance expenditures could come from. It would have to come from increased customer rates. APPA notes that EPA also asserts that the rulemaking only affects eight electric utilities that generate less than 100 MW. APPA does not know how EPA came to this conclusion. Perhaps EPA’s assumption distorts the overall costs and impacts, as well as minimizes the risk that electricity prices could be affected.
Comment Response:
EPA disagrees with the commenter’s claim that EPA determined that utilities should not have to increase electricity rates. In fact, as discusse d in the preamble and detailed in Chapter 7 of the RIA, EPA evaluated the impact of compliance costs on electricity rates assuming that 100 percent of compliance costs would be passed through to consumers. Based on this analysis, EPA estimated an increase of 0.000 cents/kWh to 0.027 cents per kWh in electricity rates, depending on the region, with an average national increase of 0.013 cents/kWh. Therefore, while EPA did not determine that there would be no effect on electricity rates due to compliance with the final rule, EPA found that any impact would be low.
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2, Excerpt Number 108 (in comment code 28.a) regarding the commenter’s statement about utilities generating less than 100 MW.

Commenter Name: Theresa P ugh Commenter Affiliation: American Public Power Association (APPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 106 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 85 All new costs due to the proposed rule (whether for effluent discharge controls or for waste management) might result in increased electricity rates. Public power or community

- owned utilities pass through all costs to the consumer.
Comment Response:

S ee response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2, Excerpt Number 53.

Commenter Name: Thomas W. Easterly Commenter Affiliation: Indiana Department of Environmental Management (IDEM) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5553

- A2 Comment Excerpt Num ber: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
While we believe the time for updating the steam electric ELG is long overdue, we also believe it is important for EPA to carefully consider the impact that these proposals will have on not only the environment and industry, but also on the rate payers. The buying power of rate payers is slowly eroding as their incomes remain steady while inflation slowly rises. It is, therefore, important at t his delicate time of economic uncertainty to ensure that whatever approaches are adopted not only significantly improve the environment, but also do not harm the economy and jobs.
Therefore, we strongly urge EPA to develop a final rule that allows state en vironmental regulators to protect the environment while balancing the impact on consumers.
Comment Response:
EPA conducted a number of analyses to support its determination that the final ELGs are economically achievable and to evaluate the potential impacts of the rule. The Regulatory Impact Analysis for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (RIA) (DCN SE05976) describes EPA's analysis of the impacts of the final ELGs on the steam electric generating industry, rate payers, and employment. Analysis of the impacts of the final ELGs on the environment are described in the Environmental Assessment for the Effluent Li mitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527)

. As summarized in related responses, the estimated impacts of the final rule are low whether the Agency considered impacts on rate pa yers (e.g., see DCN EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Number 156 in comment code 28.f), or on the economy overall (see DCN EPA

- HQ

OW

- 2009

- 0819

- 4309

- A1, Excerpt Number 16).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 86 28.g. Econ

– Employment impacts

Commenter Name: Paul Carpmone Commenter Affiliat ion: Tampa Electric Company (TEC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4520

- A2 Comment Excerpt Number: 14 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
We note that this is only one of a number of very significant rulemaking initiatives that EPA has chosen to engage in nearly simultaneously which if adopted will result in an unprecedented burden on the utility industry significantly increasing the cost of producing electricity and, the refore, the costs to our customers. Florida and the rest of the country are continuing to struggle due to the slow pace of economy recovery and continued unemployment, and these initiatives will only serve to worsen the situation. EPA should consider stag gering these proposals to delay the potential adverse economic impact that they will produce. This would provide the utility industry with an opportunity to commit its resources to cost effectively providing necessary energy at a time of economic distress , rather than expending significant resources responding to regulatory initiatives.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22 (Comment Code 28.j) regarding considerations of the cumulative impacts of regulations affecting the steam electric power generating industry and timing of the final ELGs.
Regarding the impacts of final ELG on electricity rates and, by extension, on the total economy, EPA found the final rule will result in only small effects on electricity rates nationally, and at the level of the NERC region. For the final rule, under an assumption that all compliance costs would be passed through to consumers in electricity rate increases, EPA estimated that rates would increase by approximately 0.013¢ pe r kWh across the United States. On a percentage basis, the estimated rate increases are comparably small, both nationally and by region: the estimated percentage increase in electricity rates averages 0.14 percent nationally, with the largest increase by r egion being 0.27 percent. EPA found that these increases are also low.
In terms of broader economic effects, EPA expects minimal impact from the final rule. Given the low cost of the rule in relation to the total economy (less than 0.01 percent of GDP in 2 013), EPA concludes that the final rule will not adversely affect overall economic activity.
Regarding adverse impact due to compressed and overlapping compliance periods from multiple regulations, EPA addressed this concern specifically in determining the appropriate implementation dates for the final rule. See the preamble to the final rule. In addition, as discussed in the final RIA, the resource requirements of the final rule

– in terms of estimated capital outlay, near

- term capacity effects, and ongoin g operating costs and effects

– are relativelyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 87 small in themselves. As a result, facilities should not face unreasonable challenges in obtaining financial capital to comply with the Steam Electric ELG even as they may also be meeting requirements from othe r environmental regulations at approximately the same time.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 88 28.h. Econ

– Environmental justice

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Exce rpt Number: 52 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
And, you know, these are never found near wealthy communities. They tend to be those communities that are least able to fight back, who don't have the political power. So by promulgating zero waste effluent requirements for coal plants, you and we can create justice for many communities across this land that have been denied it for far too long, communities that have every right to ex pect relief from the awful legacy of dirty coal and dirty water. The time is now, and if not now, when?
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3.

Commenter Name: Public Hearing Transcript Commenter Affiliati on: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 92 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
These power plants contribute over half of all toxic pollutants to surface waters by industrial categories regulated by the Clean Air Act. We are most concerned about the coal waste going to public water treatment, but also to the lead, mercury, arsenic, selenium, and other minerals which become toxic pollutants, causing cancers and neurological damage among Hispanics and others who reside in industrial communities near these plants.
Of growing concern to our organization is the disparate impact on the health and quality of life that pollut ants from coal fired power plants have on Hispanics. We have advocated persistently to eliminate health disparities among this population, and four of the five leading causes of death cancer, heart disease, and diabetes have all been linked to these toxic pollutants.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 89 Without strong and effective Effluent Limitation Guidelines from EPA, harmful substances will continue to pollute the waterways of communities hampered by low socioeconomic health outcomes, decreased productivity of our students and work ers, and the health of all Americans.
Comment Response:
The final rule establishes the first nationally applicable limits on the allowable levels of toxic metals and other pollutants for much of the wastewater discharged by steam electric power generati ng plants. EPA’s environmental assessment and benefit

- cost analysis documents (see DCNs SE04527 and SE05977 in the docket) demonstrate human health benefits associated with the final rule including reduced incidence of cancer, neurological effects, and ca rdiovascular disease, and other human health impacts from pollutant discharges.
While pollutants in steam electric power plant discharges have broad ecological and human health impacts, EPA recognizes the specific concerns expressed by the commenter about the existing health impacts on communities around steam electric power plants, particularly with respect to communities with environmental justice concerns (including those of Hispanic origin). As part of the final rule analysis, EPA revised its analysis o f environmental justice concerns associated with steam electric power plant discharges to provide a more detailed understanding of the baseline impacts on potentially disadvantaged communities and of how benefits of the ELG are distributed among communitie s (see Chapter 14 of the BCA for the final rule).
The final rule analysis shows that minorities, including people of Hispanic origin, account for 34.4 percent of the population that may be exposed to steam electric pollutants via self

- caught fish consumpti on. 13.9 percent of affected individuals are below the poverty threshold, and 6.5 percent are both minority and below the poverty threshold. Overall, 41.9 percent of potentially exposed individuals are minority, below the poverty threshold, or both.

As described in the BCA, EPA also assessed the share of IQ

- point

- based health benefits attributable to these communities, and found that while individuals who are both poor and minority account for 6.5 percent of the population, they account for 7.8 and 7.5 p ercent of the estimated lead and mercury IQ benefits of the final regulation, respectively. The individuals who are poor or minority account for 35.3 percent of the population but 36.1 percent of the mercury IQ benefits.
These results show that poor and mi nority communities (including poor and minority populations encompassing Hispanic individuals) are expected to receive benefits from the final ELGs that is proportional with, or exceed, their representation in the affected populations.

Commenter Name: P ublic Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 110Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 90 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Ex cerpt:
The water in many low income communities primarily of color contain arsenic, nitrates, and other chemicals because the fertilizers, animal waste, and pesticides on agribusiness farms would run off into the groundwater that became tap water. And i n communities where the average annual income was less than 15,000 a year, families were paying double for water, for the tap water they used to wash clothes and shower and for the bottles that they bought for drinking, cooking, and brushing their teeth. And why this is relevant to this is that these communities in Central Valley face a double threat to their drinking water. One is from agribusiness, and another one is from coal.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3 and EPA

- HQ

- OW

2009

- 0819

- 3920

- A1, Excerpt Number 92.
EPA notes that the final ELGs apply to steam electric power generating plants. Discharges from agribusinesses are outside the scope of this rulemaking.
For a response to comments related to grou ndwater, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4657

- A6, Excerpt Number 1 (Section 25.b.ii).

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Exce rpt Number: 120 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Water is at the heart of our environmental problems and priorities. Its management and consumption play a crucial role in health, a griculture, and ecology. For decades, the self evident worth has been ignored, and water pollution mismanagement afflict enumerable communities, particularly Environmental Justice communities. Chronic pathologies related to dehydration and water pollutio n are widespread. Despite the worth of water, it is often treated with that little care of caution.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 91 Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 127 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Our coalition partners are deeply concerned about the continued adverse impacts that harmful pollutants, particularly from coal fired power plants, are causing on Hispanic and other communities of color.
According to the 2000 Census, nearly 40 percent of Latinos live within 30 miles of a p ower plant, and that is expected to increase. As a consequence, Latino communities are disproportionately impacted by the toxic pollutants that are discharged from these dirty power plants both in the air and into our water.
1.3 million Hispanics nationwi de actively participate in fishing as a recreational, social, or family activity. However, much of the Latino community is unaware that invisible toxic chemicals such as mercury, PCBs, and other toxic substances could be present in the water and the fish that they eat.
In a number of studies, it's been shown that Latino sport and commercial anglers catch a variety of sport fish and consume fish that they catch more frequently than non Latino consumers. At the same time, Hispanic and other minorities are l ess likely than non Hispanics to be aware of fish consumption advisories. This is yet another compelling reason why the EPA should enact the most stringent Effluent Limitation Guidelines possible to protect families from exposure to harmful pollutants thr ough their water and aquatic activities.
It is because Latino and other traditionally underrepresented communities are so disproportionally impacted by these harmful pollutants that NLCCC must urge the EPA to adopt the strictest possible wastewater guideli nes that will adequately protect our communities, both for pretreatment standards for coal waste going to public water treatment facilities and for all discharges generally.
Comment Response:
EPA recognizes the concerns expressed by the commenter about e xisting health impacts on communities around steam electric power plants, and agrees that ethnicity plays a role in fishing habits, fish consumption rates, and behavioral changes in response to fish consumption advisories (FCAs). Differences in these facto rs between Latino and other anglers may result in an elevated health risk to anglers from the Latino community from exposure to the toxic chemicals in fish tissue under the baseline conditions and these anglers will thus deriveEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 92 comparatively greater benefi ts from the final rule. As described in Chapter 3 of the BCA for the final rule, EPA distinguishes and accounts for differences in fishing behaviors across ethnic groups, where possible given available data.
For more on results of the EJ analysis relevant to latino communities, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Numbers 92 and 198 (in comment code 29.c).

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 130 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Today, nearly 80 percent of the outflow from coal fired power plants is responsible for virt ually unlimited discharges of these toxic metals and other chemicals.
Further, as air pollution control technologies improve, these discharges will only increase. Without effective rules on power plant water pollution, the generation of this toxic waste w ill continue with ongoing harmful, disproportionate, and environmental justice effects on nearby communities, many of whom are Latino.
Comment Response:
EPA agrees with the concern expressed by the commenter regarding discharges from steam electric powe r plants and expected increases due to changes in air pollution control technologies. According to EPA analysis, steam electric power plants discharges account for over one

- third of all toxic pollutants discharged into surface waters by industrial categori es currently regulated under CWA. This is lower than the 80 percent suggested by the commenter, but these pollutant discharges nonetheless present a serious public

- health concern and cause severe ecological damage, as demonstrated by numerous documented im pacts, scientific modeling, and other studies. See the Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) for the final rule for discussion of the environmental effects of steam electric power plant discharges.
For more on results of the EJ analysis relevant to Latino communities, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Number 92.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 93 Commenter Name: Public Hearing Transcript C ommenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 134 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

I'm concerned wit h the Proposed Rule under review at this afternoon's hearing, including the pretreatment standard for coal waste. There is an increasing body of research that continues to highlight health disparities of economically disadvantaged communities that reside near coal fired power plants. The NAACP also has an excellent Coal Blooded report, C

- o

- a

- l, that you may want to refer to.
The chemicals that are discharged from coal plants drastically impact the health and quality of life of nearby residents who are alr eady disproportionately affected by asthma, heart disease, cancer, diabetes, and other chronic diseases, which are all preventable.
Comment Response:
EPA recognizes the concerns expressed by the commenter about existing health impacts on communities arou nd steam electric power plants, particularly with respect to low income and minority populations. The Agency has reviewed the NAACP report cited by the commenter, as well as other studies. As part of the final rule analysis, EPA revised its analysis of env ironmental justice concerns associated with steam electric power plant discharges to provide a more detailed understanding of the baseline impacts on potentially disadvantaged communities and of how benefits of the ELG are distributed among communities. Al so see answer to related comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3) and Chapter 14 of the BCA for the final rule for details.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Co ntrol Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 138 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In Los Angeles, our mayor recently announced that the city would no longer rely on coal for energy needs, and while this is a step in the right direction, coal plants continue to operate around the country, and often their air and water pollution disproportionately affect underserved and poor communities.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 94 Comment Response:

See answer to comment EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3.

Commenter Name: Disha Banik Commenter Affiliation: Private Citizen Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A10 Comment Excerpt Number: 2 External Review Flag: No External Revi ew External Review Incorporated into Response: No
Comment Excerpt:
The water in many low income communities. primarily of color, contained arsenic, nitrates, and other chemicals because the fertilizers, animal wastes, and pesticides on agribusiness farms would run off into the groundwater that became tapwater. In communities where the average annual income was less than $15,000, families were paying double for water: for the tap water they use to wash clothes and shower, and for the bottles they bought fo r drinking, cooking, and brushing their teeth.
These communities in Central Valley face a double threat to their drinking water. One from agribusiness and another from coal.
Comment Response:

See answer to comments EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt N umber 110 and EPA

HQ

- OW

- 2009

- 0819

- 5084

- A1, Excerpt Number 3.

Commenter Name: Dorothy Kellogg and Michael Leitman Commenter Affiliation: National Rural Electric Cooperative Association (NRECA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4565

- A1 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

The cost

- effectiveness of environmental regulations is particularly important to cooperatives since, unlike investor owned utilities that can spread costs to their investors as well as their rate payers, the cooperative economic model means that the G&T costs are borne by their member

owners. Demographically, the member

- owners of the distribution cooperatives that own the nin eEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 95 G&Ts potentially affected by this proposal are older (17% are over 65 compared to 13% nationally), many living on fixed incomes, and live in:

 Non

- metropolitan counties (53% compared with 17% nationally);

 Households with incomes 17% lower than the nationa l average;

 Mobile homes (16% compared to 6.5% nationally) which are generally less energy

efficient.
Energy costs can be a significant expense for such households, and any increase needs to be well justified by improvements in environmental quality which EPA’s proposal does not provide.
Comment Response:
See response to comments EPA

- HQ

- OW

- 2009

- 0819

- 4565

- A1, Excerpt Number 19 (comment code 28.e) and EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1 (comment code 28.f)

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 22 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA Must Revise its Environmental Justice Analysis to Evaluate Impacts to Communities Surrounding Power Plants and to Consider the Impacts of its Weakest Options. EPA failed to conduct the required inquiry into whether its regulatory options have a dispro portionately high and adverse health or environmental impact on communities of color and low

- income populations. The Agency’s cursory inquiry focused on only one adverse impact of pollution discharges (consumption of contaminated fish) and failed entirely to evaluate the health and environmental harms suffered by communities proximate to the source of pollution. The abbreviated inquiry does not satisfy Executive Order 12989 nor is it consistent with the environmental justice assessment conducted by the Ag ency for its 2010 proposed CCR rule on identical pollution sources. EPA’s indefensibly narrow environmental justice analysis represents substantial noncompliance with the Executive Order that must be rectified.
Comment Response:
EPA agrees that the EJ an alysis conducted to inform the proposed rulemaking did not provide detailed information on the relative effects of the regulatory options on EJ communities. While the approach used for the proposed rule analysis was similar to that EPA has taken on other

r ules, EPA recognizes that more could be done to explore how different communities are affected by steam electric power plant discharges and how the rule options serve to redressEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 96 environmental justice issues. Accordingly, as part of the final rule analysis, EPA significantly revised its analysis of environmental justice concerns associated with steam electric power plant discharges to provide a more detailed understanding of the baseline impacts on disadvantaged communities, and of how benefits of the ELG ar e distributed among population subgroups.
To meet the objectives of Executive Order 12898, EPA examined whether the rule creates potential environmental justice concerns in the areas affected by steam electric power plant discharges. EPA conducted the anal ysis in two ways. First, EPA compared demographic data for populations living in proximity to steam electric power plants to demographic characteristics at the state and national levels. This analysis focuses on the spatial distribution of minority and low

- income groups to determine whether these groups are more or less represented in the populations that are expected to benefit from the final rule, based on their proximity to steam electric power plants. Second, EPA conducted analyses of populations expose d to steam electric power plant discharges through consumption of recreationally caught fish by estimating exposure and health effects by demographic cohort. Where possible, EPA used analytic assumptions specific to the demographic cohorts

– e.g ., fish

- con sumption rates specific to different racial groups.
See Chapter 14 in the BCA for the final rule for details of the analysis and results.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0 819

- 4684

- A1 Comment Excerpt Number: 41 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The nationwide poisoning of fish is particularly unjust for communities that depend heavily on fish for food. According to the National Environmental Justice Advisory Council, families in many communities of color, including African

- Americans and Native peoples, rely on fishing to supply basic nutritional needs. 89 As the Council wrote, “[p]ut simply, communities of color, low

- income communities, tribes, and other indigenous peoples depend on healthy aquatic ecosystems and the fish, aquatic plants, and wildlife that these ecosystems support.” 90 Fishing provides an inexpensive, reliable, and healthful food source, but when fish are contaminated, reliance on fishing for food makes these communities far more vulnerable to water pollution and contaminated fish than the general population. 91

89 National Environmental Justice Advisory Council, Fish Consumption and Env ironmental Justice iii

- iv (2002), available atEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 97 http://www.epa.gov/environmentaljustice/resources/publications/nejac/fish

- consump

report_1102.p df.

90 Id. at 2.

91 Id

. Comment Response:
EPA recognizes and shares the concerns expressed by the commenter about the impact of fish tissue contamination from steam electric power plant discharges to communities that rely on self

caught fish for basic dietary and nutritional needs. As part of the final rule analysis, EPA has significantly revised its analysis of environmental justice concerns associated with steam electric power plant discharges to provide a more detailed understanding of the baseline i mpacts on potentially disadvantaged communities and of how benefits of the ELG are distributed among different population subgroups (see Chapter 14 of the BCA for the final rule).
Among several improvements, the final ELG analysis considers differences in consumptions rates across different socioeconomic groups that may contribute to differences in exposure, and benefits from the final ELG improvements. These differences enhance past analyses that looked at differences for anglers that practice subsistence fishing. As in the proposed rule analysis, EPA also differentiated between recreational anglers and subsistence fishers, who consume more self

caught fish and can be expected to experience higher health risks associated with contaminated fish tissue, as no ted by the commenter.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 93 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
2. Reliance on BPJ determinations will disproportionately affect environmental justice communities.
As noted above, it is challenging and rare for environmental organizations such as the undersigned commenters to marshal the resources to comprehensively evaluate a BAT determination for a particular plant. Clearly, most impacted local communities lack these kinds of resources. Thus, a critical flaw with relying on case

- by

- case BPJ determinations is that BAT determinations wi ll vary by jurisdiction and, even within a single jurisdiction, may vary depending on whether a local community or environmental organization is able to participate in the administrative process and has the resources to advocate for protective permit limit s.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 98 Communities without resources to engage in the permitting process in this way are much less likely to be able to compel the permitting authority to issue a permit containing strong BAT

based limits. EPA should have evaluated the environmental justice i mplications of two of its preferred options

— 3a and 3b

— which would fail to provide the same protection to under

resourced communities as a uniform national standard. EPA’s environmental justice analysis fails to acknowledge the implications of reliance on BPJ for these groups. 358

358 See 78 Fed. Reg. at 34,532; RIA at 10

- 2 to 10

- 5.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 218 (in comment code 28.b).

Commenter Name: Thomas Cmar Commenter Affiliation: Earthju stice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 204 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA failed to conduct the required inquiry into whet her its regulatory options have a disproportionately high and adverse health or environmental impact on communities of color and low

- income populations. The Agency’s cursory inquiry focused on only one adverse impact of pollution discharges (consumption o f contaminated fish) and failed entirely to evaluate the health and environmental harms suffered by communities proximate to the source of pollution. The abbreviated inquiry does not satisfy the Executive Order nor is it consistent with the environmental justice assessment conducted by the Agency for its 2010 proposed CCR rule on identical pollution sources. 915 EPA’s indefensibly narrow environmental justice analysis represents substantial noncompliance with the Executive Order that must be rectified.

Und er Executive Order 12898, each Federal agency must make achieving environmental justice part of its mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of its programs, policies, and activities on minorities and low

- income populations. 916 EPA, however, summarily sidestepped the directive of Executive Order 12898 by concluding that its environmental justice analysis “indicates that minority and low

- income communities are expected t o benefit as much as anyone from the proposed ELGs.” This statement entirely misconstrues the mandate of Executive Order 12898. EPA performed only a perfunctory analysis to determine whether a very broad population benefitting in one specific way from pol lution reductions would exclude minority and low

-Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 99 income populations. The Agency did not even begin to examine the widely divergent regulatory options in the ELG rule and consider whether the outcomes of those options would have a disproportionate impact considering the many harms presented by coal

- burning power plants to directly impacted communities.
The decision currently before EPA is not whether to promulgate an ELG rule, but to determine the precise coverage and breadth of a final ELG rule. Accordin g to analyses of the populations proximate to power plants recently completed by EPA, this decision assuredly affects low

income populations disproportionately. EPA must therefore identify any disproportionate impact on minority and low

- income populations that results from the Agency’s choice of one option over another. According to the Executive Order, if disparate impacts are identified, EPA must address those impacts. Most importantly, the Agency must make achieving environmental justice

a factor in it s decision to choose one option over another. Unfortunately EPA has barely begun the analysis required by the Executive Order.

915 See CCR RIA at 216

- 226.

916 Executive Order 12898, Federal Actions to Address Environmental Justice in Minority Populatio ns and Low

- Income Populations (59 Fed. Reg. 7629, Feb. 16, 1994). See also Interim Guidance on Considering Environmental Justice During the Development of an Action (July 2010), available at http://www.epa.gov/environmentaljustice/resources/policy/considering

- ej

- in

rulemaking

- guide

- 07

- 2010.pdf.
Comment Response:
EPA agrees with the imperative to examine potential environmental justice impacts of the revised ELGs. The focus of the ELGs revisions is to strengthen existing controls on discharges from steam electric power plants, reducing pollutant loadings to receiving waters and in turn enhancing surface water quality, reducing health ris ks, and increasing productivity in economic activities adversely affected by steam electric discharges. These changes will improve environmental conditions broadly across the country, and most particularly in communities that neighbor steam electric power plants.
EPA also agrees with the commenter’s implication that the rule options vary with respect to coverage and breadth, and thus may also vary in the scale and scope of benefits provided. This is consistent with the analyses EPA presented in the BCA. How ever, we disagree that EPA has “summarily sidestepped” the directive of Executive Order 12898. As presented in the final BCA, the EPA’s analyses provide a basis for characterizing environmental justice concerns within the constraints of the available data, and support a reasoned determination that the preferred option is unlikely to systematically preclude minority and low

- income communities from receiving environmental and health benefits of the rule.
However, EPA also recognizes that the proposed environm ental justice analysis could be improved to better inform decisions on the options, though environmental justice is not, strictlyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 100 speaking, one of the statutory factors that the Agency must consider in setting Best Available Technology. Accordingly, EPA r evised its proposed environmental justice analysis for the final rule analysis to more fully consider each of the options from an EJ perspective, based on available data. The updated analysis considers the distribution of impacts and benefits of each optio n on different populations, taking into account exposure, relevant to each category of impact. EPA intends these changes to address the commenter’s request that the Agency “examine the widely divergent regulatory options in the ELG rule and consider whethe r the outcomes of those options would have a disproportionate impact considering the many harms presented by coal

- burning power plants to directly impacted communities.” EPA also compared how the five regulatory options analyzed for the final rule compare on with respect to the distribution of the benefits. Section 14.5 of the BCA describes the findings of this comparison.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Commen t Excerpt Number: 205 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

C. EPA FAILED TO COLLECT AND EVALUATE ENVIRONMENTAL JUSTICE DATA AS REQUIRED BY EXECUTIVE ORDER 12898.

The information collection and analysis mandates of Executive Order 12898 are crystal clear. Section 3

- 302(b) of Executive Order 12898 requires Federal agencies to collect and evaluate environmental justice data for areas surrounding facilities or sites expected to have “ substantial environmental, human health, or economic effect” on local populations when such facilities or sites become subject to “substantial” Federal environmental action:
In connection with the development and implementation of agency strategies in sect ion 1

- 103 of this order, each Federal agency, whenever practicable and appropriate, shall collect, maintain and analyze information on the race, national origin, income level, and other readily accessible and appropriate information for areas surrounding f acilities or sites expected to have substantial environmental, human health, or economic effect on the surrounding populations, when such facilities or sites become the subject of a substantial Federal environmental administrative or judicial action. Such information shall be made available to the public unless prohibited by law. 917

Certainly the ELG rule is a substantial federal environmental action likely to have a substantial environmental, health or economic effect on populations proximate to the power plant. However, EPA did not conduct any environmental justice analyses of populations surrounding the hundreds of coal

- burning plants subject to the ELG rule. Instead, EPA performed a birds

- eyeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 101 evaluation of the make

- up of the population located within a 100

- mile downstream reach of the plants, focusing on only one aspect of harm. 918

EPA described their sole, specific inquiry for their environmental justice analysis:
To address the EJ implications of the proposed ELGs, EPA analyzed the demographic characte ristics of the populations currently exposed to these discharges through consuming self

caught fish from receiving reaches (i.e., populations located within 100 miles of the affected reaches also referred to as the “benefit regions” in the rest of this dis cussion) to determine whether minority and/or low

- income populations incur disproportionally high environmental impacts or are disproportionally excluded from realizing the benefits of this proposed regulation. 919

EPA’s exceedingly narrow scope of inquiry does not meet the requirements of the Executive Order. The Agency’s analysis does not in any way evaluate effects on the health, environment or economy of populations “surrounding” the power plants, nor does EPA evaluate whether these impacts will be felt disproportionately by communities of color or low

- income communities.

917 Id. at Section 3

- 302(b).

918 RIA at 10

- 2.

919 Id. at 10

- 2.
Comment Response:
See response to related comments, including comment EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Numbers 204 and 206

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 206 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

D. EPA MUST EVALUATE COMMUNITIES IMMEDIATELY SURROUNDING COAL

BURNING POWER PLANTS FOR DISPARATE IMPACT.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 102 In addition to its general assessment of populations 100 miles from coal

- burning power plants, EPA must evaluate populations within 15 miles of all facilities affected by the ELG rule. A 15

- mile evaluation is consistent with Superfund’s Hazard Ranking System (HRS), which is used to define affected populations at sites having either (a) soil contamination only (1 mile), (b) gro undwater and/or airborne contamination (4 miles), or (c) surface water contamination (15 miles downstream). 920 Because the ELG rule will impact waste disposal practices at coal

burning power plants that adversely affect soil, air and groundwater, it is a ppropriate to examine populations within a four

- mile radius, as well as 15 miles downstream.
This approach is consistent with EPA’s 2010 environmental justice analysis for the proposed CCR Rule completed pursuant to Executive Order 12898. EPA’s 2010 analy sis was based on “Zip Code Tabulation Areas (ZCTAs). 921 EPA used ZCTAs as the geographic basis for the analysis because it offered a land area equivalent to a five

- mile radial distance. EPA collected 2000 census data in the ZCTAs for 464 coal burning plan ts. After assessing the extent of minority and low

- income populations found in these ZCTAs, EPA concluded that low

- income citizens were disproportionately represented in the populations within the four

- mile radius of the plants, and therefore the hazards and risk from coal ash landfills and surface impoundments “may have a disproportionately higher effect on low income populations.” 922

Furthermore, EPA’s current analysis of fish consumers within 100 miles of power plants cannot capture disproportionate imp acts that may be occurring locally. It is essential to perform an accurate and precise assessment because poisoning of fish is particularly unjust for communities that depend heavily on fish for food. According to the National Environmental Justice Adviso ry Council, families in many communities of color, including African

- Americans and Native peoples, rely on fishing to supply basic nutritional needs. 923 Fishing provides an inexpensive and healthful food source, but when fish are contaminated, reliance on fishing for food makes these communities far more vulnerable to water pollution and contaminated fish than the general population. 924 EPA failed to identify environmental justice communities proximate to power plants that rely on such food sources and who would be disproportionately impacted by options in the ELG rule that fail to control pollution sources.
EPA therefore must examine the surrounding communities, as required by the Executive Order, and investigate with much greater diligence whether harm to health, the environment and the economies of these communities are disproportionately impacted.

920 HRS is availab le at http://www.epa.gov/superfund/programs/npl_hrs/hrsint.htm.

92 1 EPA, CCR RIA at 217.

922 75 Fed. Reg. at 35230.

923 National Environmental Justice Advisory Council, Fish Consumption and Environmental Justice iii

- iv (2002), available atEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 103 http://www.epa.gov/environmentaljustice/resources/publications/nejac/fish

- consump

report_1102.pdf.

924 Id.
Comment Response:
EPA shares the commenter’s concerns that, when evaluating distributional impacts across populatio n subsets, the Agency should use an appropriate zone of influence around steam electric facilities and affected waterbodies. Analysis of the proposed rule options used a distance of 100 miles as the appropriate distance for exposure to recreationally

- caugh t fish. The Agency recognizes that such a distance may mask the distribution of effects to populations living in close proximity to steam electric power plants.
In response to this and other comments EPA received on the proposed rule analysis, EPA revised its EJ assessment approach for the final rule. Chapter 14 of the BCA for the final rule provides more details on these updates and presents the results of these analyses. For example, EPA described the socioeconomic profile of communities within 1, 3, 15, 30, and 50 miles of reaches receiving discharges from steam electric power plants, based on suggestions from this and other commenters.
EPA also enhanced its EJ analysis by considering the distribution of health effects and benefits across socioeconomic gr oups exposed to the contaminants through consumption of self

- caught fish. The analysis considers differences in socioeconomic factors leading to lower or greater exposure, based on available data. EPA also differentiated between recreational anglers and

su bsistence fishers, who consume more self

- caught fish and can be expected to experience higher health risks associated with contaminated fish tissue, as noted by the commenter.
Chapter 14 of the BCA describes the analysis. The results show that a greater fr action of the communities living in close proximity to waters directly affected by steam electric power plant discharges is poor, when compared to the national average. The results also show that the final rule will increases the level of environmental pro tection (reduces adverse human health and environmental effects) for all affected populations, including minori ty or low

- income populations.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 20 09

- 0819

- 4684

- A1 Comment Excerpt Number: 207 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 104 E. EPA MUST EVALUATE ALL REGULATORY OPTIONS IN THE PROPOSED ELG RULE TO DETERMINE WHETHER THE OPTIONS RESULT IN DISPROPORTIONATE EFFECTS ON COMMUNITIES OF COLOR AND LOW

- INCOME COMMUNITIES.
The range of options proposed by EPA creates dramatically different outcomes in protection of health and the environment for environmental justice communities. C onsequently, EPA must evaluate its range of eight options and identify such disparate impacts. Below,

we highlight three examples of disproportionate impact that must be analyzed and addressed, according to the requirements of the Executive Order.

Comment Response:
As described in Chapter 14 of the BCA for the final rule, EPA revised its benefits and environmental justice analyses to evaluate impacts of steam electric discharges on different communities. The revisions include, notably, analyses of indivi dual options to understand the distribution of benefits across population subgroups according to socioeconomic indicators. EPA made these adjustments in part to address requests, such as the one from this commenter, for this information. See response to DC N EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 206.
While all options EPA analyzed for the final rule benefit minority and poor populations by reducing potential exposure to pollutants discharged by steam electric power plants, Options C, D, and E are expec ted to provide significantly greater human health benefits than Options A and B as indicated by higher reductions in adverse health effects from lead and mercury exposure. Improvements under Option C accrue to poor and minority population to a larger relat ive extent than do improvements under Options D and E, but Option D (on which the final limitations and standards are based) provides greater benefits overall than Option C, including to poor and minority populations exposed to steam electric pollutants th rough consumption of self

- caught fish. Thus, EPA concluded that Option D furthers environmental justice objectives.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Ex cerpt Number: 208 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

1. Reliance on BPJ in Options 3a and 3b will have a disparate impact on communities of color and low

- income populations.

E PA must evaluate the environmental justice implications of two of its preferred options, 3a and 3b. As discussed previously
, Options 3a and 3b (for plants with less than 2,000 MW wet

scrubbed capacity) would leave effluent limits to be set on a case

- by

- c ase basis. 925 The practicalEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 105 implications of EPA’s failure to set ELGs for FGD wastewater are enormous. The record shows that local permitting authorities do not rigorously apply best professional judgment for determination of the best available technolog y for FGD wastewater and coal combustion residuals. 926 EPA, in fact, is well aware that states have failed to establish technology

- based effluent limits for these waste streams, as evidenced by the dozens of objection letters issued by EPA regional offices

.
Case

- by

- case BAT determinations are extremely problematic for local communities affected by these discharges who might seek stronger permits. To fully participate in the administrative review process, local groups must pay for legal and technical assista nce, including hiring experts to investigate existing technologies and present alternative BAT analyses. Clearly, most impacted local communities lack these kinds of resources. Thus, a critical flaw with relying on

case

- by

- case BPJ determinations is that BAT determinations will vary by jurisdiction and, even within a single jurisdiction, may vary depending on whether a local community is able to participate in the administrative process and has the resources to advocate for protective permit limits.

Commu nities without resources to engage in the resource

- intensive permitting process are much less likely to be able to compel the permitting authority to issue a permit containing strong BAT

based limits. Consequently it is likely that Options 3a and 3b woul d provide less protection to under

- resourced communities, such as low

- income communities and communities of color, then a uniform national standard. The Executive Order therefore requires EPA to fully evaluate the impact on these communities of the relian ce on BPJ in its environmental justice analysis.

925 78 Fed. Reg. at 34,458, Table VIII

- 1.

926 See Closing the Floodgates, (finding that out of 274 power plants discharging wastewater, only 86 had at least one limit on arsenic, boron, lead, mercury, cadm ium, or selenium; 255 plants lacked any limits on arsenic; 235 plants lacked any limits on mercury; 232 lacked limits on selenium; and nearly 40 percent did not even require monitoring for any of these pollutants).
Comment Response:
See response to DCN E PA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 218 (in comment code 28.b)

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 209 External Review Flag: No Ex ternal Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 106 Comment Excerpt:

1. Proposed regulatory options that permit the continued use of coal ash surface impoundments will have disparate impact on communities of color and low

- income populations.
As EPA demonstrated in its environmental justice analysis for the 2010 proposed CCR rule, coal ash landfills and surface impoundments are more often located in low

- income communities and therefore may have a disproportionately higher impact on this populat ion. Further, Earthjustice’s own environmental justice analysis in 2010 of the proposed CCR rule also found coal

- burning power plants disproportionately located in impoverished areas. Earthjustice found that almost 70 percent of coal ash impoundments in t he United States are in areas where household income is lower than the national median. 927 Earthjustice also found that, of the 181 ZIP codes nationally that contain coal ash ponds, 118 (65.19 percent) have above

- average percentages of low

- income families

. 928 Given the serious health threats posed by coal ash, it is particularly troublesome that coal ash impoundments are disproportionately located in low

- income communities, where residents are more likely to rely on fish consumption, groundwater supplies and less likely to have access to medical insurance and care. Consequently, ELG options that rely on the continued use of impoundments are likely to disproportionately impact environmental justice populations near the power plants.
Earthjustice also found in its 2010 analysis that the lack of standards for safe operation of surface impoundments was most acute in states where the disproportionate impact for both income and race was greatest for communities living near the impoundments. 929 In addition, Earth justice found that the largest number of coal ash impoundments were located in states that generally have the weakest regulations. 930 Because EPA has proposed options that would permit the continued use of surface impoundments, EPA must examine the potent ial disparate impact on environmental justice communities in light of current state law as well as the options EPA is considering in its proposed CCR rule.

927 U.S. Census Bureau, Census 2000 Summary File 3 (SF 3)

- Sample Data, All 5

- Digit ZIP Code Tabu lation Areas (860), Table P53 "Median Household Income in 1999 (Dollars)", available at http://factfinder.census.gov/servlet/DCSubjectKeywordServlet?_ts=307978361 769.

928 U.S. Census Bureau, Census 2000 Summary File 3 (SF 3)

- Sample Data, All 5

- Digit ZIP Code Tabulation Areas (860), Table P76 "Family Income in 1999" (downloaded June 23, 2009), available at http://factfinder.census.gov/servlet/DownloadDatasetServlet?_lang=en&_ts=26384311414 0. “L

ow

- income” defined as earning less than $20,000 annually. ZIP codes containing coal ash ponds compared to a national mean percent “low

- income” of 12.61%, calculated based on the “Family Income in 1999” dataset; United States Environmental Protection Agency (U.S. EPA). Database of coal combustion waste surface impoundments (2009). Information collected by EPA from industry res ponses to Information Collection Request letters issued to the companies on March 9, 2009. Sufficient data to determine ZIP code Census Data was available for 511 of the nation’s 584 known coal ash impoundments. Many impoundments are adjacent to one anoth erEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 107 surrounding generating facilities, and are listed with identical geographic coordinates in the EPA data

— hence why only 181 ZIP codes contain 511 ash impoundments.

929 See Comments of Earthjustice et al. to U.S. Environmental Protection Agency (“U.S. EPA ”), Office of Resource Conservation and Recovery, Hazardous and Solid Waste Management System; Identification and Listing of Special Wastes; Disposal of Coal Combustion Residuals From Electric Utilities, 75 Fed. Reg. 35,128 (proposed June 21, 2010) (commen ts filed Nov. 19, 2010) (Document ID No. EPA

- HQ

- RCRA

- 2009

- 0640

- 6315), 195

- 205.

930 Id.
Comment Response:
EPA appreciates the commenter’s concern about the safe operation of impoundments which plants may continue to use following the final CCR and ELG rul es. Under RCRA, the recent promulgated Coal Combustion Residuals Rule (the CCR rule) is the major controlling action for safe operation of surface impoundments.
For the final ELG rule, the Agency adjusted its avoided impoundment failure benefits analysis t o account for anticipated changes in coal combustion residue (CCR) management practices (Chapter 6 in the BCA for the final rule). These benefits are incremental to those of the CCR rule, which is accounted for in the baseline for the ELG analysis.

EPA als o revised its analysis of environmental justice concerns to highlight potential changes in communities affected by future expected impoundment releases based on the profile of communities living in proximity to the reaches that receive direct discharges fr om steam electric power plants (Chapter 14 in the BCA). Specifically, EPA describes the demographic characteristics of populations living within 1, 3, 15, 30, and 50 miles of steam electric power plants. The profile supports the commenter’s claim that comm unities living in close proximity to steam electric power plants are more likely to be low income than the national average.
Note that the final ELG rule doesn’t require plants to close impoundments, but EPA expects that many plants will implement operatio nal changes

– including reduced reliance on impoundments

– to comply with the limitations of the final regulation. These changes will reduce the amount of CCR that is released in the event of an impoundment failure, thereby reducing impacts to nearby

commu nities, including low

- income and minority populations.
EPA’s impoundment analysis values avoided releases based on available data regarding cleanup costs, natural resource damages, and litigation costs; data on the human health impacts of impoundment relea ses are not available and are therefore not reflected in the impoundment benefits described in Chapter 6 of the BCA.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 108 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment E xcerpt Number: 210 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

2. The failure to establish specific and enforceable BMPs for structural stability and closure will have disparate impact on communities of color and low

- income populations.
The failure to require structural stability and closure requirements in BMPs will also have a disproportionate impact on low

- income communities. Low

- income populations immediately surrounding a coal ash impoundment will be most heavily impacted if impoundments are not required to ensure structural stability or have not been properly closed. Adverse impacts from coal ash surface impoundments on local communities can include seeps of highly polluted, water , groundwater contamination, poisoning of fish, birds, wildlife and livestock that frequent the impoundment, destruction of recreational opportunities in nearby surface waters, depressed property values, fugitive airborne ash, as well as cataclysmic dam fa ilures. Such adverse impacts from inadequately maintained or improperly closed impoundments are potentially severe, and such localized impacts must be examined for their disparate impacts under all ELG options that do not include BMPs addressing such risks

. Comment Response:
The final CCR rule addressed requirements for plant owners to implement structural stability and closure best management practices (BMPs) for coal ash impoundments. The final CCR rule also addressed many of the other impacts on local communities raised by the commenter. To the extent that ELG rule affects residual impacts of impoundments, EPA discusses the benefits qualitatively in Section 2 of the BCA for the final rule. Also see BMP discussion in Section VIII of the preamble to the f

inal ELG rule.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 211 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

F. EPA’S ENVIRONMENTAL JUSTICE ANALYSIS IS ARBITRARY AND CAPRICIOUS AND MUST BE REVISED TO EVALUATE ADEQUATELY THE IMPACTS OF THE PROPOSED ELG RULE, AS REQUIRED BY EXECUTIVE ORDER 12898.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 109 Courts have held that an agen cy’s environmental justice analysis is subject to review under the Administrative Procedure Act and can be found arbitrary and capricious. 931 EPA’s failure to follow the explicit requirements of Executive Order 12898 to evaluate surrounding communities im pacted by the proposed rule or to evaluate the options being considered by the Agency and their impacts on environmental justice communities renders its analysis arbitrary and capricious. EPA must therefore revise the analysis and consider the results of i ts new environmental justice analysis in its decision making for the final ELG rule.

931 See Communities Against Runway Expansion, Inc. v. FAA , 355 F.3d 678, 688

- 689 (D.C. Cir. 2004) (in the context of a challenge to an agency’s choice of reference group in the disproportionality analysis, the court ruled that where an agency exercises its discretion to include an environmental justice analysis, it is subject to review under the arbitrary and capricious standard pursuant to the APA ); Coliseum Square Ass’n , Inc. v. Jackson , 465 F.3d 215 (5th Cir. 2006) (review of agency’s consideration of environmental justice appropriate under APA arbitrary and capricious standard).
Comment Response:
EPA disagrees that the environmental justice analysis conducted to info rm development of the proposed rule is “arbitrary and capricious.” The approach used for the proposed rule analysis was similar to that EPA has used on other rules, which have been subject to review and public comments. However, EPA recognizes that more co uld be done to explore how different communities are affected by steam electric power plant discharges and how the rule options serve to redress environmental justice issues. Accordingly, as part of the final rule analysis, EPA has significantly revised it s analysis of environmental justice concerns associated with steam electric power plant discharges to provide a more detailed understanding of the baseline impacts on communities and of how benefits of the ELG are distributed among communities (see Chapter 14 in the BCA for the final rule).
The results show that a greater fraction of the communities living in close proximity to waters directly affected by steam electric power plant discharges is poor, when compared to the national average. The results also show that the final rule will increases the level of environmental protection (reduces adverse human health and environmental effects) for all affected populations, including minority or low

- income populations.
As also shown in Chapter 14 of the BCA, while all options EPA analyzed for the final rule benefit minority and poor populations by reducing potential exposure to pollutants discharged by steam electric power plants, EPA determined that the option selected for the final rule provides significant benef

its to poor and minority populations exposed to steam electric pollutants through consumption of self

- caught fish and furthers environmental justice objectivesEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 110 Commenter Name: C. and C. Timko Commenter Affiliation: Private Citizen Document Control Numb er: EPA

- HQ

- OW

- 2009

- 0819

- 5084

- A1 Comment Excerpt Number: 3 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Once environmental impacts have been neglected, social inequities grow.

It should not be the case that Americans' health is influenced by where they live, as it currently is. Let us not allow environmental injustice as a social issue to grow more than it already has.
Comment Response:
EPA shares the concerns expressed by the commenter about the distribution of environmental impacts across populations. EPA conducted an environmental justice analysis to support the final rule, in accordance with requirements in Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low

- Income Populations and Chapter 10 in EPA's Guidelines for Conducting Economic Analyses . Chapter 14 of the BCA for the final rule describes this analysis. The results show that a greater fraction of the communities living in close proxim ity to waters directly affected by steam electric power plant discharges is poor, when compared to the national average. The results also show that the final rule will increases the level of environmental protection (reduces adverse human health and enviro nmental effects) for all affected populations, including minority or low

- income populations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 111 28.j. Econ

– EOs 12866 and 13563

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
As required by Executive Order 12866 7 the EPA assessed the regulatory proposal (ELGs) as an

ec onomi cally significant regulatory action because it is likely to have an annual effect on the economy of $100 mil lion or more. The EPA accordingly prepared an analysis of the potential benefits and costs associated with the ELGs. 8

 The EPA has carried o ut a partial analysis of costs and benefits, at best amounting to a cost effectiveness appraisal of alternatives, which are rather narrow. There is an effort to model the impact of the regulatory proposal on generating costs for each alternative and to ex amine impacts such as those on markets and employment (likely to fall by around 1.6 percent in the sector). Benefits are not fully quantified.

7 Exec. Order No. 12866, 58 Fed. Reg. 51735 (October 4, 1993).

8 EPA, Regulatory Impact Analysis, 10

- 1.

Comment Response:
EPA disagrees with the commenter’s assertion that the agency “carried out a partial analysis of costs and benefits, at best amounting to a cost effectiveness appraisal of alternatives, which are rather narrow.” EPA conducted a thorough and de tailed analysis of estimated compliance costs for the final rule, in accordance with section 304(b) of the Clean Water Act. EPA also conducted a detailed Environmental Assessment regarding impacts of the final rule. The estimated compliance costs were th en used to calculate social costs and information from the Environmental Assessment was used to calculate social benefits of the final rule, pursuant to Executive Order. These analyses are described in detail in the RIA, EA Report , and BCA documents includ ed in the record. In some cases, lack of data prevented EPA from fully quantifying and/or monetizing the benefits, and to that extent, EPA agrees with the commenter that “benefits are not fully quantified.” See the BCA for a listing of benefits that could not be fully quantified and/or monetized. Also see responses to related comments (e.g., DCN EPA

- HQ

OW

- 2009

- 0819

- 3411

- A1, Excerpt Numbers 8 and 16 in Sections 28.b and 29.a, respectively).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 112 Commenter Name: L. Niemala Commenter Affiliation: Private Citi zen Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3549

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Power plant water pollution will cost the citizens real money in health suffering and costs as well as the cost of cleaning the water.
When will the government finally include the long range costs to the society in their decisions?
Comment Response:
EPA recognizes the concerns expressed by the commenter about the costs to society associated with steam electric power plant discharges, and it conducted a detailed Environmental Assessment and analysis of benefits, in terms of human health, water quality, and other aspects, of strengthening pollution controls on these discharges under the final rule. These analyses are summarized in the preamble and detailed in the EA Report and BCA for the final rule.

Commenter Name: Patrick O’Loughlin Commenter Affiliation: Buckeye Power, Inc. Document Control Number: EPA

- HQ

- OW

- 2 009

- 0819

- 4183

- A2 Comment Excerpt Number: 22 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Buckeye Power is concerned that EPA has not adequately considered the cumulative impacts of the ELG rules, CCR rules and the avalanche of other rulemakings affecting the coal

- fired power industry. EPA's recent and pending rules dealing with mercury, particulates, interstate transport, greenhouse gases, and cooling water intake structures already are imp osing or likely to impose major new requirements, and restrictions that will be extremely costly, many of which are now being implemented or will soon be implemented. This barrage of regulation makes it increasingly difficult for facilities to design, pla n, and implement efficient improvements. Steam electric power generating facilities are capital intensive and complex, and they are integral components of our nation's electric energy supply. To impose substantial new requirements on facilities already u ndergoing significant transitions

- without fully evaluating the costs, environmental necessity, and timing of further changes

- is ill

- advised and not in keeping with Executive Order 13610 on reducing regulatory burdens, including cumulative effects of mul tiple regulations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 113 Comment Response:
EPA acknowledges the concern expressed by the commenter regarding the effects of multiple rules affecting the electric power industry. EPA is sensitive to the need to provide sufficient time for affected entities to u nderstand, plan for, and implement any changes to their operation to meet their environmental responsibilities. The ELG rulemaking process provided significant advance notice to potentially affected entities to evaluate the potential impacts of any new ELG requirements on their operations. As described in the preamble for the final rule, EPA also provided time for facility owners to implement any changes to such operations to meet the final limitations and standards, as well as flexibility to permitting aut horities in implementing the final rule. The Agency specifically considered the timing of requirements of other environmental regulations in the ELGs to provide steam electric power plants time to consider their strategy to implement any needed changes. Se e Sections VIII and XVI of the preamble to the final rule for details on the timing of implementation of the final rule.
EPA’s analysis of the proposal and final rule accounted for the potential cumulative impact that multiple environmental regulations mig ht have on the steam electric power generating industry and is consistent with EPA’s requirements under the CWA authority and applicable Executive Orders, including EOs 13653 and 13610, to evaluate the cumulative effects of regulations.

For the proposed ru le analysis, EPA analyzed the impact of the ELGs using the Integrated Planning Model (IPM), a comprehensive electricity market optimization model that assesses impacts of environmental regulations within the context of regional and national electricity

markets. The proposal analysis used IPM version v4.10_MATS, which includes the effects of the Mercury and Air Toxics Standards (MATS) rule, the Cross

- State Air Pollution Rule (CSAPR), and various other federal and state programs (see IPM documentation for mor e details; available at http://www.epa.gov/powersectormodeling/ ). EPA added the ELG impacts on top of the impacts modeled in the base case.
For the final rule analysis, EPA again used IPM to understand the impacts of the ELGs on the electricity market (and on the steam electric power generating industry in particular), accounting for the effects of other regulations. EPA used IPM model version 5.13 for the final rule analysis. The analysis base case includes the regulations included at proposal, as well as the cooling water intake structure rule and the Coal Combustion Residuals (CCR) rule. Based on their breadth of effect and potential cost, EPA views these regulations as the most significant other regulations affecting the electric power industry, and stea m electric generators in particular. Given the potential magnitude of effects, EPA also conducted an analysis that accounts for the effects of the Clean Power Plan (CPP) regulation (as proposed in July 2014). See Section V.B of the preamble for the final r ule for additional information. Also see DCN SE05978 for a discussion of the anticipated effects of the final CPP regulation. The model outputs therefore reflect the combined effects of all these regulations on generation capacity, electricity production c osts, prices, etc. accounting for the costs to electricity generators of complying with the environmental requirements. The model allows consideration of the incremental impacts of the ELGs in the context of the various rules and programs affecting the pow er sector during the period of analysis. Furthermore, EPA accounted for the effects of other regulations in the ELG rulemakingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 114 in several other ways. For the final rule, EPA coordinated the ELG analysis with the Air Office and Office of Resource Conservati on and Recovery to identify changes potentially affecting the universe of plants to which the ELGs apply (e.g., EPA accounted for changes in plant handling of CCR waste due to the CCR rule in determining the waste streams applicable to each plant). See Sec tion 9.4.1 in the Technical Development Document for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (TDD) (DCN SE05904).
Finally, EPA analyzed the ELG regulatory options under scenarios that look at various impacts of other rules in the baseline (e.g., with and without the CCR rule, without and without the CPP rule). For example, see Appendix B and C in the RIA for impacts of alternate baseline assumptions on total compliance costs, cost

- to

- re venue ratios, electricity rates, etc.
Regarding the commenter’s statement about “environmental necessity,” EPA notes that it prepared a comprehensive Environmental Assessment and Benefits analysis for the final rule. The benefits analysis quantifies those that can be estimated, and monetizes the benefits where possible. The analyses, which are summarized in the preamble for the final rule and further detailed in the BCA, show clear and significant benefits in terms of human and ecological health, avoided co sts, and other societal values. EPA estimates that the final ELGs will generate monetized benefits valued at $450.6 million to $565.6 million per year, using a 3 percent discount rate ($387.3 million to $478.4 million using a 7 percent discount rate), not including important other benefits that the Agency was not able to assign a dollar value to. These are benefits that are incremental to and separate from the benefits as a result of other regulations that the Agency has promulgated.
As discussed in the pre amble and detailed in the RIA document for the final rule, the results of EPA’s analyses demonstrate that the final ELGs are economically achievable for the industry as a whole, and they will have minimal economic impacts in a broader sense. The final rule will have small incremental impacts across the range of metrics EPA analyzed. These finding hold across the various scenarios the Agency analyzed with respect to the effects of other environmental regulations included in the baseline. For example, results of the electricity market model analysis show a decline in total capacity of 843 MW for steam electric power plants as a group, or approximately 0.2 percent of the 359,982 MW baseline capacity for these plants, corresponding to a net closure of two units and one plant (see Chapter 5 in RIA document for details). This is a minimal impact on the steam electric industry. EPA assesses that these retirements are inconsequential relative to total national and regional generating capacity. Furthermore, these ret irements are offset by increased capacity for other plants. As a result, the final rule will not significantly affect electric supply reliability

– either nationally or by NERC region.

Commenter Name: Leonard F. Hopkins Commenter Affiliation: Southern Illinois Power Cooperative (SIPC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4309

- A1 Comment Excerpt Number: 1Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 115 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Over the years, SIPC has implement ed pollution prevention measures to control water

- borne pollutants in its discharge, but this new proposal from EPA may render these efforts useless, and the cost of compliance with this rule will significantly affect Southern Illinois Power Cooperative an d its consumer

- owners.
Being not

- for

- profit, Southern Illinois Power Cooperative will be forced to pass along all costs of meeting any new requirements that may result from complying with such a rule to its consumer

owners. Southern Illinois Power Coopera tive believes that increased cost of electric power, particularly in rural areas served by SIPC has negative impacts on economic development and jobs. Because Southern Illinois Power Cooperative has a disproportionate amount of fossil

- fuel fired generatio n when compared to the electric utility industry as a whole, these negative impacts could be disproportionately higher for SIPC and its consumer

- owners.
Comment Response:
EPA addressed concerns on the specific impacts of the rule on cooperatives in its r esponse to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4460

- A1, Excerpt Number 1 (Section 28.f).
EPA disagrees with the commenter that the final rule will render previous efforts to control the discharge of pollutants “useless.” EPA’s final rule establishes nationally applica ble technology

based effluent limitations. The commenter does not specify why it has implemented certain pollution prevention measures to control its discharge of pollutants, but EPA notes that the final rule’s requirements are in addition to any requireme nts necessary to meet water quality standards, pursuant to section 301(b)(1)(C) of the Act.
The commenter raises a concern about potential disproportionate impacts in regions that generate a larger share of their electricity from coal. First, EPA notes tha t its final rule is affordable for the industry as a whole, which, along with technological availability, is key factor for Best Available Technology Economically Achievable under section 301 the Clean Water Act.
Second, EPA disagrees with the commenter th at the final rule will negatively impact those that generate a substantial amount of electricity using fossil

- fuels. EPA recognizes that the SERC region, in which the commenter (SIPC) operates, does get a significant share of its current electricity supply from steam electric generators, accounting for the largest national share of steam electric generating capacity. However, EPA’s electricity market modeling for that region, presented in Chapter 5 of the RIA, shows small impacts of the rule on electricity wholesale prices (0.2 percent increase), and cost of generation (0.5 percent increase) (see RIA Table 5

- 1). Additionally, the model shows that these results are obtained with small reduction in capacity (0.2 percent) and very modest (0.5 percent) reduction in the amount of electricity generated by steam electric units (see RIA Table 5

- 2).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 116 Given these and other small impacts, EPA disagrees that the final rule will adversely affect economic development or jobs. The commenter is not specific on the nature of i ts

concerns. Nonetheless, EPA does not anticipate that there will be an adverse effect on regional economic development or jobs due to changes in generation at individual steam electric power plants, or higher electricity rates.
First, regarding impacts o n individual steam electric power plants, as detailed above, the final rule is expected to reduce the amount of electricity generated by steam electric power plants by only a small amount (0.4 percent) in the region where SIPC operates (0.2 percent nationw ide); the final rule is not expected to reduce steam electric generating capacity in the SERC region, and has minimal impacts nationwide with 1 net plant retirement.
Second, regarding impacts on electricity rates, as reported in the RIA, the final rule is expected to have very small impacts on the cost of electricity. EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents per kWh, with costs in the SERC region where SIPC operates repres enting an estimated 0.019 cents per kWh (see RIA Table 7

- 1). This increase represents approximately 0.2 percent of the baseline price of electricity for residential users, and 0.2 and 0.3 percent of the baseline price of electricity for commercial and indu strial users, respectively (see RIA Table 7

- 2). These estimates are based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices; to the extent that some plants are not able to pass compliance costs onto consumer s, it overstates the potential impact of the final rule on consumers. Thus, even with these conservative assumptions, the incremental impacts of the final Steam Electric ELGs on electricity rates are expected to be minimal and are unlikely to negatively af fect regional economic development or employment.

Commenter Name: Nancy A. Evans Commenter Affiliation: PPL Services Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4348

- A2 Comment Excerpt Number: 1 External Review Flag: No External Review E xternal Review Incorporated into Response: No
Comment Excerpt:
We urge EPA to take all appropriate steps to ensure that new rules applicable to the power generation industry

– including the ELGs and the coal combustion residuals (CCRs)

- are grounded in sound science and reflect an understanding of the challenges curr ently confronting the industry. Over the past several years, merchant and regulated utility power generators have been subject to an unprecedented number of new environmental rules under the air, water, and waste programs with major cost and operational im plications for hundreds of power plants. If implemented in a piece

- meal manner or if fashioned to include requirements which are unsupported by sound science, these new rules

– including the ELGs

– have the potential toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 117 impose significant, unnecessary cost s and operational restrictions with little or no corresponding environmental benefit.
Comment Response:
With respect to the commenter’s statement about the final steam electric ELGs in conjunction with the CCR rule, see response to DCN EPA

- HQ

- OW

- 2009

- 081 9

- 4183

- A2, Excerpt Number 22, regarding EPA’s consideration of other environmental regulations affecting the electric power sector in developing the final steam electric ELGs.
EPA cannot respond to the commenter’s statement that if the ELGs are “unsupporte d by sound science” they have the potential to impose “significant, unnecessary costs and operational restrictions.” The commenter offers no concrete example of how it views the ELGs as unsupported. Nonetheless, as explained elsewhere in the rulemaking rec ord, EPA’s analyses for the final rule use sound data and methods.
EPA disagrees that the rules will have “little or no corresponding environmental benefit.” EPA conducted a benefit analysis, pursuant to Executive Order, which carefully lay out the benefit s, quantifies those that can be estimated, and monetizes the benefits where possible. The analysis, which is summarized in the preamble for the final rule and further detailed in the BCA, shows clear and significant benefits in terms of human and ecologica l health, avoided costs, and other societal values as a result of the final steam electric rule. EPA estimates that the final ELG will generate benefits valued at $450.6 million to $565.6 million per year using a 3 percent discount rate ($387.3 million to $478.4 million using a 7 percent discount rate), not including important other benefits the agency was not able to assign a dollar value to. These are benefits that are incremental to and separate from the benefits from other regulations the agency promulg ated.

Commenter Name: John McManus Commenter Affiliation: American Electric Power System (AEP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1 Comment Excerpt Number: 83 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Given the current environmental regulatory climate, older and less efficient facilities that dispatch less frequently, but provide some economic benefit, will be adversely affected through these guidelines and future rule pr omulgations, such as with proposed CCR and 316(b) rules, as well as the anticipated Greenhouse Gas Standards for existing sources. Though the proposed ELG rule may not make these units uneconomic to generate electricity over a short term by itself, the cum ulative effect of the ELG in combination of other regulations may push these units into an accelerated retirement. Many of the affected facilities will not have 20

- year lifespans orEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 118 service lives, but will still have to shoulder the financial burden to com ply with these rules in the short term.

[...]
In its social cost analysis, EPA assumes that the estimated cost to society resulting from compliance with the proposed ELG rulemaking is simply the total compliance costs without accounting for tax effects. Th at is a valid assumption with respect to who will ultimately be paying for the compliance. However, EPA is confusing the concept of mitigation

– i.e. the cost required to reduce pollutant loadings to meet a new standard

– with the concept of social cost, which is the expense to an entire society resulting from continuing “business as usual.” In this case, the basis for assessing social costs is the impact to society from facilities continuing to operate under the limitations of the current effluent guidel ines compared to the projected benefits to society resulting from implementing the new rulemaking. Theoretically, if the social cost exceeds the mitigation cost, society will benefit.
In terms of social costs, if effluent discharges from electric generatin g units under the current ELG are having an adverse effect on the environment and public health, the challenge is to quantify this impact in economic terms and assign a value to it. The process is fairly subjective as there are likely many different models forecasting the impacts of power generation facilities continuing under the current effluent guidelines

– perhaps as long as 100 years. But whatever the length of the period, the difference between operating on a business

- as

- usual basis versus implementi ng the proposed ELGs must be valued and discounted to current dollars. This “value” is the externality that represents the impact to society of not implementing the proposed ELG or of industry not complying with the proposed rules post

- implementation. It ’s a process that merits review and scrutiny in terms of how the value is developed, whether or not the value make sense, and how the ranges around that value account for the uncertainty and variability of inputs to the model; expressing it as a single num ber automatically requires questioning its validity. In summary, developing an estimate of social cost is merely an attempt to put a dollar value on potential public health or environmental impacts going forward from continued use of the current ELG rule limitations. That is very different from calculating the cost to mitigate current discharges to meet the requirements of the proposed ELG rulemaking. The two costs are not comparable although EPA has suggested they are with the only difference being the

e xclusion of the tax discount afforded to the mitigation costs.

[...]

7. EPA fails to account for all employment impacts in its analysis of job creation.
EPA has misrepresented reasonably expected employment impacts associated with implementation of th e proposed ELG rule by projecting a net increase in employment based on its myopic position of only estimating national level employment changes in the directly regulated electric power industry sector. Ignored in the Agency’s analysis is the largest pote ntial employment impact

– i.e. any associated with other sectors of the economy, whereby the increased electric rates due to ELG compliance would make domestic manufacturers less competitive, leading to job losses from business shutdowns or moving of opera tions outside ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 119 the United States. The EPA attempts to sidestep this issue by generalizing that the net effect of an environmental regulation on regulated sectors and the overall economy as indeterminate. 50 Less discretionary income for all working Americans from higher electric rates due to ELG implementation would only compound employment losses due to lower demand for products and services. Put differently, EPA’s narrow consideration of only including potential job creation by implementation of the ELG rule neglects the deleterious effects of job destruction that would likely result in a net loss of domestic employment. Before finalizing this rule, EPA must examin e and identify the full impacts of the rule to domestic employment by including the impacts to all sectors of the economy in its modeling.

50 Id. at 6

- 1.
Comment Response:

The commenter raises three main issues addressed in turn below:

First, the comm enter raises concern about early retirements of steam electric generating capacity. Specifically, the commenter states that ELG rule “in combination of other regulations may push these units into an accelerated retirement. Many of the affected facilities w ill not have 20

- year lifespans or service lives, but will still have to shoulder the financial burden to comply with these rules in the short term.” EPA disagrees that it did not consider the “cumulative effect” of the final ELGs in light of other relevant rules because the Agency did consider the combined effects of environmental regulations in its analyses of the ELGs. See response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22, for a discussion of how EPA accounted for the impacts of the ELGs in the context of various other rules affecting the electric power sector. As discussed in the preamble, EPA also took into account announced plant retirements and fuel conversions, as well as changes in plants’ ash

- handling and wastewater

- trea tment practices, expected to occur by the implementation dates in the final rule. EPA recognizes that these plants will have much less than the assumed 20 years of service life, but notes that they are not expected to incur costs to meet the final limitati ons and standards. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1, Excerpt Number 67 (in section 28.b) for response to related concerns regarding the cost recovery period.
Second, the commenter states that the Agency’s social costs analysis failed to dist inguish between the concepts of mitigation costs and social costs. EPA disagrees with the commenter’s suggestion that its social cost analysis was flawed. EPA followed well

- accepted economic concepts for establishing the relevant costs from society’s persp ective, as described in EPA Guidelines for Preparing Economic Analyses (U.S. EPA, 2010).
Third, the commenter raises concerns regarding the Agency’s employment analysis, stating that the Agency failed “to account for all employment impacts.” In particular, the commenter states that higher electricity rates may have negative impacts on employment in other sectors such as manufacturing, which EPA failed to account for. EPA’s analysis of the potential electricity rate effects, discussed in Chapter 7 of the RIA , shows that the final rule is expected to have veryEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 120 small impacts on electricity rates; in the range of 0.11 to 0.21 percent, on average across the country, depending on the sector (Tables 7

- 2 and 7

- 3). Regarding estimates of how the electricity rates may potentially affect employment, EPA points out that there are myriad uncertainties in estimating employment effects and that estimated effects could range from positive to negative impacts overall, and with varying effects over time. Chapter 6 of the RIA d ocument for the final rule discusses the ways a regulation can affect employment in the directly affected and other industries and resulting uncertainties in employment effects assessment. RIA Chapter 6 also provides context for understanding potential emp loyment effects by looking at employment, production costs, and incremental costs in selected sectors directly or indirectly affected by the final rule. In EPA’s view, the development of a comprehensive and sufficient approach for quantitatively estimating employment effects remains an ongoing challenge, which EPA is addressing via a carefully structured review of methods for analyzing the economy

- wide effects of environmental regulations, including employment effects. Until completion of this effort, and

a ssociated development of improved methods for analyzing employment effects, EPA will not provide estimates that, in EPA’s view, are based on an inadequate or insufficiently validated methodology.
In summary, given the multiplicity of factors affecting empl oyment, the conflicting character of their effects, and the likelihood that effects will vary substantially by industry, EPA concluded that the steam electric ELG regulation could have a range of employment effects

– overall increases or decreases in emplo yment, and with varying effects over time. Ultimately, however, the EPA concluded that, in no event, would these employment effects be so substantial that they would change EPA’s decision about what limitations and standards it should adopt for the final

r ule. As stated above, in EPA’s view, in the absence of a robust quantitative employment effects methodology and adequate data, and in light of the very small increases in electricity rates expected to result from the rule, the qualitative employment effect s analysis undertaken for the final rule is appropriate to produce an informed regulatory result.

Commenter Name: Basil G. Constantelos Commenter Affiliation: Midwest Generation, LLC. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Midwest Gen encourages EPA to apply Executive Order 13563 calling for greater flexibility in regulatory implementation.

Comment Response:
The commenter asks for flexibility in regulatory implementation. See response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22, for a discussion of how the final steamEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 121 electric ELGs establish a flexible implementation period that provides steam electric power plants with sufficient time to consider their strategy to comply with the final requirements.

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Failing to quantify these important climate change indicators deprives the public of an opportunity to fully participate in the regulatory process because by excluding the information, EPA is not including relevant scientific and technical findings. This is specifically forbidden by President Obama’s Executive Order 13563.
Executive Order 13563 requires:

Sec. 2. Public Parti cipation. (a) Regulations shall be adopted through a process that involves public participation. To that end, regulations shall be based, to the extent feasible and consistent with law, on the open exchange of information and perspectives among State, loca l, and tribal officials, experts in relevant disciplines, affected stakeholders in the private sector, and the public as a whole.
(b) To promote that open exchange, each agency, consistent with Executive Order 12866 and other applicable legal requirements, shall endeavor to provide the public with an opportunity to participate in the regulatory process. To the extent feasible and permitted by law, each agency shall afford the public a meaningful opportunity to comment through the Internet on any proposed re gulation, with a comment period that should generally be at least 60 days. To the extent feasible and permitted by law, each agency shall also provide, for both proposed and final rules, timely online access to the rulemaking docket on regulations.gov, inc luding relevant scientific and technical findings, in an open format that can be easily searched and downloaded. For proposed rules, such access shall include, to the extent feasible and permitted by law, an opportunity for public comment on all pertinent parts of the rulemaking docket, including relevant scientific and technical findings. [emphasis added]
By failing to provide the public with this important information regarding projected impacts on climate change indicators such as temperature and sea lev el, EPA has not appropriately assessed the reductions in carbon dioxide emission from this regulation.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 122 See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 1 (in Section 29.h) regarding the commenter’s statement that EPA “fa il[ed] to quantify . . . important climate change indicators.”
Regarding the more general comment regarding public participation (which the commenter raises in the context of the impacts of changes in CO 2 emissions), EPA disagrees. For the CO2

- related bene fits, as for other analyses supporting the final ELG, EPA used appropriate and well

accepted approaches and data to develop as comprehensive an analysis of the benefits as possible given the available data, methods, and scope of the rule. EPA described its approach in detail in supporting documents (TDD, EA Report , RIA, BCA, and others) provided in the docket for the proposal and received numerous comments that indicated not only significant public interest in the process, but significant participation in a ddressing substantive analytic and policy issues. EPA extended the period for the public to comment on the proposed rule to give over 100 days for stakeholders to review the material and provide input for the rulemaking. As described in the preamble and el sewhere in the rulemaking record, EPA also engaged with the regulated community and the public in other ways, such as meetings and conference calls with stakeholders, throughout the development of this rule.

Commenter Name: Winslow Sargeant Commenter Af

filiation: U.S. Small Business Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 22 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Given that the record lacks the specific underlying data and analyses to facilitate informed comment on the RFA certification and the costs and benefits of this proposal, Advocacy believes that the agency has not complied fully with the transparency requir ements of Executive Order 13563. 7

7 January 18, 2011, Executive Order 13563.
Comment Response:
EPA disagrees with the commenter that the Agency has not adequately complied with the Office of Management and Budget’s Executive Order 13563 implementation guidance regarding transparency. EPA conducted the rulemaking process in accordance with the standa rd of transparency prescribed by Executive Order 13563. As such, EPA has established an official public docket for this action under Docket ID EPA

- HQ

- OW

- 2009

- 0819. The official public docket consists of the documents specifically referenced in today’s rule making action, any publicEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 123 comments received, and other information related to this action. Confidential business information and other information, the disclosure of which is restricted by law, are a part of the official record for the rule, though this in formation is not available in the public docket. The Agency made every effort possible to accommodate requests for confidential and copyrighted information used in this rulemaking consistent with law. EPA responded to information requests and has made ever y effort possible to provide assistance to the public to access and understand data used, to the extent allowed by the confidential business information requirements at 40 CFR Part 2. With respect to specifically to the information underlying EPA’s RFA ana lysis, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number No. 23 (in comment code 28.e).
Given the longstanding discussions of issues related to steam electric industry discharges over many years, EPA provided sufficient time for the regulated community and others to review and comment on these materials and their potential effects on EPA’s selection of regulatory options. EPA made substantial efforts to help explain the issues involved with the Steam Electric ELGs, and it has met with many sta keholders beginning very early in the rulemaking process and throughout. This outreach is documented elsewhere in the rulemaking record.

Commenter Name: Vicki Card Commenter Affiliation: Colorado Springs Utilities Document Control Number: EPA

- HQ

- OW

- 20 09

- 0819

- 4483

- A1 Comment Excerpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

COST BENEFIT ANALYSIS
EPA has proposed multiple rules in the last several years targeted at the electric power generating industry. The cumulative costs associated with complying with these rules, including the proposed ELG rule, are substantial. [...]
Colorado Springs Utilities therefore respectfully requests that EPA consider the benefit to human health, pu blic safety, the economy and national security that come with having reliable, affordable, redundant sources of electricity when conducting cost benefit analysis of rules affecting the electric power generating industry. These benefits are not typically included in EPA's regulatory analysis. The cumulative impact of multiple regulations on the affordability and reliability of the nation's electric power supply should also be considered each time a new rule is proposed or an existing rule is ame nded.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 124 7 Colorado Springs Gazette, 2013. The Road to a Longer Life by Laura Helmuth. Section D Page 1. Tuesday, September 17, 2013.
Comment Response:
With respect to the commenter’s statement about the “substantial” costs to industry of complying with multiple rules affecting the electric power generating industry, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22, regarding EPA’s consideration of other rules affecting the electric power industry in developing the final steam elect ric ELGs.
With respect to the commenter’s statement about having “affordable” and “reliable” sources of electricity, EPA determined that the final rule is economically achievable for the steam electric industry as a whole. In particular, the final rule is projected to result in a net reduction of 843 MW in steam electric generating capacity (0.2 percent of the baseline capacity) as of model year 2030, reflecting full compliance by all plants, which corresponds to a net effect of two generating unit (partial ) closures and one plant (full) closure. EPA assesses that these retirements are inconsequential relative to total national and regional generating capacity. Furthermore, these retirements are offset by increased capacity for other plants. As a result, the final rule will not significantly affect electric supply reliability

– either nationally or by NERC region. Furthermore, EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents, with c osts by NERC region ranging from 0.000 cents per kWh to 0.027 cents per kWh. This estimate is based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices and, to the extent that some plants are not able to pass compliance costs onto consumers, is an overstatement of the potential impact of the final rule.

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Exc erpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The cumulative impact of the multiple regulations facing the electric utility industry, if not the individual regulations themselves , already is forcing some plant closures and threatening to strand newly upgraded assets.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22, regarding EPA’s consideration of other environmental rules, in addition to the final steam electric ELGs, affecting the electric power sector.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 125 Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 117 External Revi ew Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
To ensure that electricity rates can remain reasonable and electricity supply and delivery can remain reliable, EPA needs to ensure that the steam electric ELGs are accurate, representative, sound, reasonable, and flexible, and comply with the APA, CWA section 304(b), Executive Order 13563, and other applicable requirements.
Comment Response:
The commenter expresses a concern that the final rule ensure that elec tricity rates “remain reasonable” and electricity supply and delivery “remain reliable.” EPA analyzed the impacts on electricity rates, and supply and delivery associated with the final steam electric ELGs, as detailed in the RIA, and found that the final rule would have minimal impacts. For example, see Chapter 7 which discusses electricity rate impacts and Section 10.6 which addresses Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

The c ommenter does not identify specific issues that would suggest that the ELGs are not “accurate, representative, sound, reasonable and flexible.” Nonetheless, regarding these topics, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number No. 126.

T he also commenter does not identify specific issues that would suggest that EPA did not comply with “APA, CWA section 304(b), Executive Order 13563, and other applicable requirements” in developing the ELGs. However, EPA notes that it has complied with all requirements specified in the CWA, other statutes, and Executive Order, as discussed in the preamble and detailed in the RIA for the final rule.

Commenter Name: Thomas H. Adams Commenter Affiliation: American Coal Ash Association (ACAA) Document Contr ol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2 Comment Excerpt Number: 13 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 126 Disregarding the impact of this rulemaking on beneficial use would be a significa nt violation of administrative policy.
Successive administrations have issued executive orders (12866 and 13563) that compel EPA to consider the impact of its proposed regulations on all sectors of society and the economy. Specifically, Executive Order 135 63, entitled “Improving Regulation and Regulatory Review” (Jan. 18, 2011), instructs federal agencies, including EPA, to assess benefits and costs of regulations in an effort to “impose the least burden on society, consistent with obtaining regulatory obje ctives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.” The order also directs consideration of alternative regulatory approaches and allowance for public participation in the rulemaking process

. As stated earlier, any decision by EPA to disregard information on CCR beneficial use would exclude from the cost

‐ benefit analysis consideration of the fate of more than 40 percent of the CCRs generated annually in the U.S. It would further disenfranchi se the participation of tens of thousands of individuals and entities who submitted testimony on beneficial use in public hearings and the public comment process surrounding the agency’s proposed rule. Both consequences would be direct and substantial viol ations of the executive orders.
Comment Response:
EPA does not agree with the commenter that the final rule “disenfranchise[s] the participation of tens of thousands of individuals and entities who submitted testimony on beneficial use in public hearings and the public comment process.” EPA did consider the comments and testimony of the public, submitted during the public comment period for this rule, on its analysis of the benefits associated with increased CCR marketability, as evidenced by EPA’s respon ses to public comments submitted. As noted in the Agency’s response to a related comment (DCN EPA

- HQ

OW

- 2009

- 0819

- 4511

- A2, Excerpt Number 7 (in comment code 29.a)), as part of the final rule analysis, EPA quantified the potential benefits associated with i ncreased CCR marketability. This analysis addresses the commenter’s concerns regarding the exclusion of these potential benefits, although EPA notes that EPA had analyzed the benefits qualitatively at proposal and did not disregard them, as claimed by the commenter.

Commenter Name: Floyd Gilzow Commenter Affiliation: Missouri Joint Municipal Electric Utility Commission (MJMEUC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4576

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In particular, Executive Order 13563 directs agencies to take into account “to the extent practicable, the costs of cumulative regulations.” A memorandum for the heads of executiveEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 127 departmen ts and agencies, issued March 20, 2012, by the Administrator of the Office of Regulation and Regulatory Affairs, directs that, so far as the law allows, “agencies should take active steps to take account of the cumulative effects of new and existing rules and to identify opportunities to harmonize and streamline multiple rules.” Where appropriate and feasible, agencies should consider cumulative effects and opportunities for regulatory harmonization as part of their analysis of particular rules, and should carefully assess the appropriate content and timing of rules in light of those effects and opportunities. Also, the memorandum reminds agencies that they should choose regulatory approaches that “maximize net benefits.”
The electric generation industry, i ncluding public power or community

‐ owned utilities, face a host of rigorous new requirements including several Clean Air Act (CAA) regulations, the Coal Combustion Residuals rule (CCR), and the Clean Water Act (CWA) § 316(b) intake aquatic protection fine structure rule (expected by November 2013) and the CO2 regulations for new and existing power plants. The Environmental Protection Agency (EPA) needs to evaluate the cumulative impact of these regulations as part of its assessment of the proposed effluent guidelines rule. The Office of Management and Budget (OMB) guidance and Executive Order 13563 require EPA to consider the cumulative effects of regulations and seek to reduce overlapping and inconsistent requirements.
Comment Response:
EPA disagrees with the commenter’s suggestion that the Agency did not consider the potential cumulative effects of certain other environmental regulations in its analyses or in developing the final ELG requirements. EPA’s response to a related comment (DCN EPA

- HQ

- OW

- 2009

- 08 19

- 4183

- A2, Excerpt Number 22) describes the multiple ways in which EPA accounted for the potential cumulative effects of environmental regulations on the electric power industry, as well as how the Agency coordinated among rulemakings affecting the electr ic power sector. EPA also carefully considered the substantive requirements of the final rule to ensure that they would not create inconsistent or duplicative requirements with other rules. For example, the final rule does not establish Best Management Pra ctice for surface impoundments, since the final CCR rule already establishes such BMPs.

Commenter Name: Kevin D. Frizzell Commenter Affiliation: Owensboro Municipal Utilities (OMU) Elmer Smith Station (ESS) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4683

- A2 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
OMU ESS supports responsible environmental regulation aimed at protecting public health and the environment in a cost

- effective manner that will also provide appropriate protection for the economic well

- being of the community we serve and the markets in wh ich we operate.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 128 Nonetheless, OMU ESS has increasing cost burdens with the Mercury and Air Toxic Standards Rule, 316(b) Cooling Water Intake Structure Rule, Coal Combustion Residuals Rule, and these ELG rules.
Comment Response:
As noted in responses to o ther comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22) and in the preamble for the final rule, EPA specifically considered the potential cumulative effects of multiple environmental regulations in its analyses for the final steam electric ELGs, and the Agency determined that the final rule is economically achievable for the industry as a whole, as required by the CWA.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4 686

- A1 Comment Excerpt Number: 31 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

As discussed in the next sub

‐ section, benefit

‐ cost analysis compares complete (and sometimes overestimated) costs of compliance with incomplete (and very often underestimated) social benefits. EPA’s qualitative analysis and

— where data exist

— empirical treatment of human health and environmental impacts is detailed and helpful to understanding the many important positiv e benefits of strengthening the steam electric ELGs. In contrast, EPA’s monetization of benefits that are never traded in a market and are, quite literally, priceless is incomplete, inaccurate, and

— to the extent that it distracts from the legitimate decis ion

‐ making process associated with the Clean Water Act

—unhelpful.

[...]
Uncertainty affects many aspects of EPA’s massive evaluation of costs and benefits of the proposed steam electric ELGs. As in many benefit

‐ cost analyses, the uncertainties are not symm etrical: costs of meeting a standard, commonly based on ex ante engineering estimates, are often overestimates of actual, ex post compliance costs, while health and environmental benefits of the same standard are surrounded by different types of uncertaint y. Standard practices in calculation of monetized benefits, particularly the high threshold requirements for including any nonzero value, tend to underestimate the true magnitude of benefits.
The result is a systematic imbalance in EPA’s benefit

‐ cost analy ses: Complete and sometimes overestimated costs of regulation are weighted against incomplete and often underestimated benefits of regulation. It can be no surprise that, using this highly biased methodology, costs exceed the measured benefits of the propo sed steam electric ELGs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 129 Comment Response:
EPA agrees with the commenter that there is almost an unavoidable asymmetry in the evaluation of the costs and benefits of effluent guidelines regulations, where there is a tendency for costs to be overstated an d benefits understated. The Agency specifically recognizes this asymmetry in its discussion of the analyses for the final rule, noting limitations of the benefits analysis where several potentially significant benefits are not fully quantified or monetized . It is well

documented that there are difficulties associated with measuring and monetizing all categories of benefits, which EPA cannot solve in their entirety through one rulemaking. Nevertheless, as detailed in the BCA, EPA used sound data and methodol ogies to quantify and monetize benefits associated with the ELGs where possible. EPA, therefore, disagrees that the monetization of benefits as presented in the BCA is “inaccurate” and “unhelpful.” Finally, while the Agency considers benefit

- cost analysis as informative in the ELG rulemaking process, and it is something that is done pursuant to Executive Order, EPA based the final rule on factors that the Clean Water Act (sections 301 and 304) expressly directs EPA to consider when establishing Best Availab le Technology Economically Achievable (see Section VIII.C. of the preamble). Regarding the role of cost

- benefit analysis in EPA’s decisions on the final steam electric ELGs, see response to DCN EPA

- HQ

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6. e).

Commenter Name: Kelly Jean Heffner Commenter Affiliation: Pennsylvania Department of Environmental Protection Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4811

- A1 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In recent years, industry has been the subject of significant rulemakings by EPA. While EPA considers this Proposal singularly, such a view is not useful. The cumulative effects of EPA's rules should be we ighed during the promulgation of rules. More importantly, as much flexibility as is reasonably possible must be provided to ensure compliance is timely, cost effective and fair on the National front.
Comment Response:
EPA disagrees that EPA considered th e ELG “singularly.” See response to DCN EPA

- HQ

- OW

2009

- 0819

- 4183

- A2, Excerpt Number 22, regarding EPA’s consideration of the other rules affecting the electric power sector in developing the final steam electric ELGs.

Commenter Name: Theresa Pugh Commenter Affiliation: American Public Power Association (APPA)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 130 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5140

- A2 Comment Excerpt Number: 1 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:

The steam electric industry, including public power or community

- owned utilities, face a host of rigorous new requirements including several Clean Air Act (CAA) regulations, the Coal Combustion Residuals rule (CCR), the Clean Water Act (CWA) § 316(b) intake aquatic protection structure rule (expected by November 2013), and the greenhouse gas emissions regulations for new and existing power plants. The Environmental Protection Agency (EPA) needs to evaluate the cumulative impact of these regulations as part of its ass essment of the proposed effluent guidelines rule. The Office of Management and Budget (OMB) guidance and Executive Order 13563 require EPA to consider the cumulative effects of regulations and seek to reduce overlapping and inconsistent requirements.

In pa rticular, Executive Order 13563 1 directs agencies to take into account “to the extent practicable, the costs of cumulative regulations.” A memorandum for the heads of executive departments and agencies, issued March 20, 2012, by the Administrator of the O ffice of Regulation and Regulatory Affairs, directs that, so far as the law allows, “agencies should take active steps to take account of the cumulative effects of new and existing rules and to identify opportunities to harmonize and streamline multiple ru les.” 2 Where appropriate and feasible, agencies should consider cumulative effects and opportunities for regulatory harmonization as part of their analysis of particular rules, and should carefully assess the appropriate content and timing of rules in li ght of those effects and opportunities. Also, the memorandum reminds agencies that they should choose regulatory approaches that “maximize net benefits.”
It is with these executive branch policy directives, in tandem with the CWA’s historical record on set ting Best Available Technology (BAT) 3 considering remaining life of plant and feasibility, that APPA asks EPA to consider APPA’s recommendations.

1 http:/ /www.whitehouse.gov/sites/default/files/omb/inforeg/eo12866/eo13563_01182011.pdf.

2 http://www.whitehouse.gov/sites/default/files/omb/assets/inf oreg/cumulative

- effects

guidance.pdf.

3 BAT is defined at Section 304(b)(2) of the CWA. In general, BAT represents the best available economically achievable performance of plants in the industrial subcategory or category. The factors considered in assessin g BAT include the cost of achieving BAT effluent reductions, the age of equipment and facilities involved, the process employed, potential process changes, and

non

- water quality environmental impacts, including energy requirements and other such factors

as the EPA Administrator deems appropriate. EPA retains considerable discretion in assigning the weight according to these factors. BAT limitations may be based on effluent reductions attainable through changes in a facility's processes and operations. Where existing performance is uniformly inadequate, BAT may reflect a higher level of performance than is currently beingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 131 achieved within a particular subcategory based on technology transferred from a different subcategory or category. BAT may be based upon pr ocess changes or internal controls, even when these technologies are not common industry practice. http://water.epa.gov/scitech/wastetech/guide/questions_index.cfm#ba t
Comment Response:
With respect to the commenter’s statement about evaluation of the potential cumulative impact of regulations in developing the final steam electric ELGs, see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4183

- A2, Excerpt Number 22. EPA also car efully considered the substantive requirements of the final ELGs to ensure that they would not create inconsistent or duplicative requirements with other rules. For example, the final rule does not establish Best Management Practice for surface impoundment s, since the final CCR rule already establishes such BMPs.
With respect to the commenter’s statement about “remaining life of plant and feasibility,” see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Number 151 (in comment code 5.b).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 132 28.l. Econ

– Other comments

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 19 External Review Flag: No External Review External Review Inco rporated into Response: No
Comment Excerpt:

 There will be a general tightening across the board on these emissions, but they affect a small part of the generating industry (just over 1000 plants in 2010).

 The EPA claims high benefits and low costs, but it has not carried out a complete benefit

cost analysis. Since benefits and costs may easily be higher or lower than the estimates, the EPA has not really calculated anything and cannot really claim anything other than an unquantified statement that the pr oposals are a good thing.

 The EPA has made many spurious, rule

- of

- thumb type assumptions in analyzing this proposal and gives the impression that it would have found a basis for proceeding with tighter regulation regardless of the underlying economics. The approach seems to reflect a common administra tive view that quantification, however spurious, is a valuable exercise.

 Poor analysis may be worse than useless, but that is not the impression given by this regulatory proposal and associated regulatory im pact assessment.

 Is there a systemic problem to be addressed in the steam electric industry? It seems as though the regulator is gaining information about possible improvements because they are happening in parts of the baseline existing development of the sector. It requires a major research project to explain why these practices appear to be growing without regulatory change. Likely expla nations are the need to avoid workplace hazards and the risk of being liable for damages in tort vis

- à

- vis the local c ommunity. The EPA does not consider baseline momentum apart from mak ing a claim that current effluent levels are simply too high.

 With admittedly poor quantification of benefits, the most that the EPA can claim is that it has assessed the costs of achievi ng certain technical changes in regulation that are motivated by command and con trol concerns. Better understanding of why best practices are improving and diffusing would help the EPA determine whether a new regulation is needed at all or which alternativ e approaches might better help reduce emissions at lower cost.
Comment Response:
The commenter raises several, sometimes interrelated points for consideration. These points are addressed below:
In the first bullet, the commenter notes that the general ti ghtening of the “emissions” (which the Agency took to be the same as discharges in the context of this rule) affects a small part of theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 133 generating industry. Whether this is raised as a concern is unclear. This statement, however, is consistent with EPA’s determination that the technology bases for the final rule (or other technologies or processes capable of meeting the final effluent limitations and standards) are currently employed by a significant number of plants (i.e., they are available and well

demo nstrated technologies). See preamble Section VIII.
In bullets 2 through 4, the commenter raises concerns about the quality and usefulness of the costs and benefits analyses. EPA addressed the general concerns in responses to related comments. For example, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1, Excerpt Numbers 8 and 11 (comment code 28.b). Regarding the basis for the decision to proceed with regulation, EPA described the extensive process it followed prior to initiating the rulemaking in the preamble for the p roposed rule and summarized the process in the preamble for the final rule. This process included a review of national effluent guidelines, in accordance with Section 304(m) of the CWA, a detailed study of the industry, as well as input from industry, envi ronmental groups, and other stakeholders. In deciding to proceed with a rulemaking, EPA considered the significant pollutant loadings attributable to this industry alone, as well as the fact that there had been significant changes in the industry since th e last time the ELGs were revised, and that there were available technologies for controlling pollutant discharges from the industry other than surface impoundments, upon which the previously established regulations were mostly based. EPA’s decision to ini tiate a rulemaking and its decisions as to the content of the fine rule were based on a consideration of “cost,” consistent with the statute, but not on a cost

- benefit analysis. EPA determined that the final rule is economically achievable (i.e., affordabl e) for the industry as a whole. See preamble section VIII and the RIA. For the role of benefit

- cost in EPA’s decisions for the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 in comment code 6.e.
Finally, the commenter appea rs to be concerned about EPA using current industry trends as the basis for the regulation and asking whether there is a systematic problem in the industry that requires a regulatory approach (bullets 5 and 6). EPA notes that section 304(m) of the CWA dire cts EPA to develop a plan for issuance of new regulations and revision of existing regulations for categories of industrial wastewater discharges. Part of this review involves evaluating advances in treatment technologies and changes in industry processes that may warrant ELG revisions. As mentioned above, EPA described in the detailed study and preambles for the proposed and file rule the “problem” that EPA is aiming to redress by revising the ELGs: The previously established regulations, which were last u pdated in 1982, do not adequately address the toxic pollutants discharged from the electric power industry, nor have they kept pace with process changes that have occurred over the last three decades. The development of new technologies for generating elec tric power (e.g., coal gasification) and the widespread implementation of air pollution controls (e.g., flue gas desulfurization (FGD), selective catalytic reduction (SCR), and flue gas mercury controls (FGMC)) have altered existing wastestreams or created new wastewater streams at many power plants. As a result, each year the pollutant discharges from this industry are increasing in volume and total mass, and currently account for approximately 30 percent of all toxic pollutants discharged into surface wat ers by all industrial categories currently regulated under the CWA. There are affordable technologies that are widely available, and already in place at some plants, which are capable of reducing or eliminatingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 134 steam electric power plant discharges. In the several decades since the steam electric ELGs were last revised, such technologies shave increasingly been used at plants.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 103 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The cost of zero discharge of bottom ash and fly ash can be very prohibitive for small units , and those units would be better off closing, which isn't as good an option for certain people, than having those costs, but that is something that needs to be considered under the Clean Water Act.
Comment Response:

The final rule includes a zero discha rge requirement for fly ash and bottom ash transport water and FGMC wastewater (based on dry handling and/or closed

- loop systems) for existing sources that are not oil

- fired generating units nor are less than or equal to 50 MW in nameplate capacity. For g enerating units that are 50 MW or less or that are oil

- fired, the final rules establishes BAT limitations and PSES for these wastestreams (and others) that are equal to previously established BPT limitations, based on use of a surface impoundment. As expla ined in the preamble to the final rule, the differentiated BAT/PSES requirements for oil

- fired generating units and units of 50 MW or less will alleviate some of the concerns raised by various commenters about possible comparatively higher costs faced by s mall units, as defined in this rule. As explained in the preamble, EPA concluded that the final limitations and standards are economically achievable (i.e., affordable) for the industry as a whole. EPA projects net capacity retirement of 843 MW (0.2 percen t), corresponding to a net closure of 2 units or one plant, as a result of the final rule. See Chapter 5 of the RIA for details.
For more about applicability thresholds for small units, see comment EPA

- HQ

- OW

- 2009

- 0819

- 4317

- A1, Excerpt Number 30 (in comment code 28.e) and responses to comments in comment code 5c.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 160 External Review Flag : No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 135 Comment Excerpt:
We also think the agency may have underestimated some pollutant removal cost per pound, and our preliminary calculations suggest that EPA's estimates of removing a toxic weighted pound equivalent are significantly underestimated for a number of waste streams, including bottom ash and fly ash. As a result, your cost effectiveness analysis will probably need to be revisited, we believe.
Comment Response:

EPA has revised the pollutant removals, costs, and cost

- effectiveness calculations and data as part for its analyses of the final ELG. The revised values are provided in the preamble, with details provided in the TDD and the RIA for the final rule. For the role of cost

- ef fectiveness in EPA’s decisions for the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in C omment C ode 6.h.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 200 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

The rule should also

-- and this is very important

-- minimize cost to customers and be consistent with the industry's ongoing investments to transition to a cleaner generating fleet with an enhanced electric grid.
Comment Response:
The final rule establishes limitations and standards applicable to the discharge of pollutants from the steam electric power generating industry based on the “best available technology economically achievable” and the “best available demonstrated control technology,” as those terms are used in sections 301, 304, and 306 of the Clean Water Act.

EPA determined that the technologies that form the basis for regulatory Option D and Option F represent Best Available Technology Economically Achievable (except for discharges from “small” or oil

- fired generating units) and Best Available Demonstrate Control Technology,

res pectively, because these technologies are available, demonstrated, and economically achievable (i.e., affordable) for the industry as a whole, and they have acceptable non

- water quality environmental impacts, as required by the Clean Water Act (see preambl e Section VIII).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 136 EPA's analyses show that the final rule achieves results consistent with the objectives sought by the commenter. As documented in the RIA, EPA’s analysis projected minimal impacts on electricity rates as a result of the final rule. As repo rted in Chapter 7 of the RIA, EPA estimated the potential increase in cost per unit of electricity sales for the U.S. under the final rule to be 0.013 cents per KWh, with costs by NERC region ranging from 0.000 cents per KWh to 0.027 cents per KWh (see Sec tion 7.2.2 in RIA). This estimate is based on a conservative assumption of 100 percent pass

- through of compliance costs to electricity prices and to the extent that some plants are not able to pass compliance costs onto consumers, is an overstatement of th e potential impact of the final rule.
In response to other comments EPA received on the proposed ELG, the Agency also looked at the distribution of the impacts of the final ELG across households and found that the incremental economic burden of the final r ule on households is small both relative to income and relative to the baseline energy burden of households in different income ranges (see Section 7.4.3 in RIA).
Regarding consistency with the objective of a cleaner generating fleet, EPA's analyses show l ower projected air pollutant emissions under the final ELGs than in the baseline, due to shift of electricity generation toward lower emitting electricity generating units. See Chapter 7 of the BCA for air

- related benefits of the final ELGs.

Commenter Na me: Jamie Rhodes Commenter Affiliation: Environment Council of Rhode Island Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4034

- A2 Comment Excerpt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excerpt:
When considering costs, the Clean Water Act allows EPA to evaluate whether costs can be reasonably borne by the industry as a whole. 13 EPA acknowledges in its proposal that Option 5 would by far remove the largest amount of pollutants from power plant discharges, resulting in the greatest benefit to public health and the environment. 14 And EPA has estimated that most utilities would only incur costs of less than 1% of annual revenue. 15 Yet the Agency claims it did not select Option 5 as a “prefer red” option because of concern that it is too expensive when compared with the other options. Clearly this industry can bear the comparatively small cost to comply with requirements mandated by the Clean Water Act to clean up their toxic discharges. Societ y has been unfairly forced to bear the cost of these discharges for decades.

13 See Waterkeeper Alliance v. U.S. EPA, 399 F.3d 486, 516 (2d Cir. 2005) and Rybachek v. U.S. EPA, 904 F. 2d 1276, 1290

- 91 (9th Cir. 1990)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 137 14 Id. at 34,473

15 Id. at 34,494 (Table XI

- 4); 34,493
Comment Response:
The commenter supports proposed Option 5, which is substantially similar to the Option F described in the final rule preamble (see preamble section VIII). Proposed Option 5 and Option F include evaporation as the technol ogy basis for control of FGD wastewater discharges. As discussed in the preamble, EPA did not select evaporation as the BAT basis for control of discharges of FGD wastewater from all existing steam electric generating units because of the high cost of poss ible regulatory requirements based on evaporation for discharges of FGD wastewater from existing facilities. The annual cost to the industry of limitations based on evaporation would be more than 2 and 1⁄2 times the cost to industry estimated for the final r ule (after tax) (approximately $570 million more expensive than the final rule, on an annual basis, after tax). Given the high costs associated with the technology, and the fact that the steam electric industry is facing costs associated with several other rules in addition to this rule, EPA decided not to establish BAT limitations for FGD wastewater based on evaporation for all steam electric power plants. Nevertheless, as described preamble section VIII.C.13, the final rule does establish a voluntary ince ntives program under which steam electric power plants can choose to be subject to more stringent BAT limitations for FGD wastewater based on evaporation. Also see responses to comments in comment code 28.b and comment code 6.iii.

Commenter Name: Cari Boyce Commenter Affiliation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The revised analysis should, at a minimum, include: Conducting the cost

- benefit analysis on the incremental treatment of a technology for FGD wastewater.
Comment Response:

EPA does not conduct cost

- benefit analysis for individual treatment technologies; instead EPA compares options that incorporate technology control options across all the waste streams being regulated. For the role of benefit

- cost in EPA’s decisions for the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 in comment code 6.e.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 138 Commenter Name: John McManus Commenter Affiliation: American Electric Power System (AEP) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4448

- A1 Comment Excerpt Number: 85 External Review Flag: No External Review External Review Incorp orated into Response: No
Comment Excerpt:

8. Cost

- Effectiveness Analysis

EPA’s use of the time

- value of money in 1981 dollars is inappropriate and a deliberate attempt to unfairly characterize the costs of compliance with the proposed rule as reason able. The reported cost effectiveness of other guidelines should be escalated to current (2010) dollars in the time

value of money construct to demonstrate the magnitude of the real incremental cost that will be incurred and borne by a utility’s customers, not masking these real costs in three decades old dollars.
Comment Response:
EPA disagrees with the commenter’s assertion that the reporting of cost

- effectiveness in 1981 dollars is “inappropriate and a deliberate attempt to unfairly characterize the co st of compliance with the final rule.” First, EPA evaluates cost

- effectiveness values for the regulatory options in 1981 dollars so that they are readily comparable with cost

- effectiveness values from previous ELGs. Second, EPA clearly presents the complia nce costs in 2014 dollars throughout the supporting documents, notably in the preamble and RIA document, and even in the detailed description of the cost

- effectiveness analysis prior to restating the costs to the conventional 1981 dollars (see Appendix F i n final rule RIA).

For the role of cost

- effectiveness in EPA’s decisions for the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 27 in Comment Code 6.h.

Commenter Name: Winslow Sargeant Commenter Affiliation: U.S. Small Busines s Administration, Office of Advocacy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

B. Small Entity Costs Appear Hi gh, But the Record is Insufficient to Permit AnalysisEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 139 Advocacy is concerned about the EPA finding in Table 4

- 1 of the RIA that approximately half of all the municipally

- owned and rural electric cooperative plants have cost

- to

- revenue ratios in excess of 3% . Under EPA’s own RFA guidance, if these reflect small entity costs, such large impacts preclude the presumption of a certification. 12 Also, such a finding suggests that many of these plants would not be financially viable, particularly since the 3% figu re is a lower bound for these plants. It is reasonable to expect that several plants would experience cost/revenue ratios exceeding 10% or 20%. Evidence of the degree of serious impact on individual plants is, therefore, lacking in the record. This analy sis suggests that the certification may not be correct, but without the underlying data, we can only speculate as to its validity.
Second, this high rate of economic impact on plants generally is not consistent with EPA’s historic interpretation over three decades of “best available technology economically achieveable” (BAT) determinations, where average cost/revenue impact ratios are generally in the range of 1 percent or less.
Comment Response:
Regarding the first part of the Excerpt Number (first parag raph), see response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 23 (section 28.e). Also, EPA disagrees that it has not followed its own RFA guidance or that its certification of no SISNOSE is incorrect. As explained in response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4477

- A1, Excerpt Number 5 in comment code 28.a, and as described in Chapter 8 of the RIA, most of the 110 to 191 small entities owning plants to which the ELGs apply incur no costs under the final rule. EPA estimated that six small entities incur cos ts at or above the 1 percent cost

- to

- revenue threshold (i.e., 3 to 5 percent of small entities to which the ELGs apply), and for one of these small entities (less than 1 percent of small entities) the costs are at or above 3 percent (see Table 8

- 4 in the R IA). These findings support EPA’s determination of no SISNOSE based on both the small absolute number of small entities estimated to incur a potentially significant impact, and the small fraction of small entities the significantly impacted facilities repr esent.
The commenter does not provide data to support the assertion that the economic impact is not consistent with EPA’s historic interpretation of BAT determinations. EPA typically estimates the costs of compliance with ELGs and determines whether they a re affordable to the industry as a whole, or whether the costs can be “reasonably borne” by the industry. Chem. Mfrs. Ass’n v. EPA , 870 F.2d 177, 262 (5th 1989); BP Exploration & Oil, Inc. v. EPA , 66 F.3d 66 F.3d 784, 799

- 800 (6th Cir. 1996). See also Nat ’l Wildlife Fed’n v. EPA , 286 F.3d 554, 570 (D.C. Cir. 2002); CPC Int’l Inc. v. Train , 540 F.2d 1329, 1341

- 42 (8th Cir. 1976), cert. denied, 430 U.S. 966 (1977). EPA has generally looked at the affordability of the costs on the industry as a whole (or for a subcategory of the industry, as appropriate) by analyzing the effect of the regulation on plant closures and, to a more limited degree, firm failures. See Nat’l Wildlife Fed’n , 286 F.3d at 562

- 65; Nat’l Ass’n of Metal Finishers v. EPA , 719 F.2d 660, 666 (3d Cir. 1983); Am. Iron & Steel Inst. , 526 F.2d at 1054; Ass’n of Pac. Fisheries , 615 F.2d at 808. The preamble to the final rule lays out the criteria for BAT generally (e.g., see Section IV), and EPA’s rationale for the BAT determina tions for this final rule specifically (e.g., see Section VIII). As noted in preamble section VIII, EPA determined that the final rule’s costs are economically achievable for the industry as a whole, as their projected impact on steam electric generating c apacity in terms ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 140 retirements is expected to be minimal. While not a factor in EPA’s BAT determination, EPA notes that the average plant

- level cost

- to

- revenue ratios for the final ELGs is well below the 1 percent level noted by the commenter.

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 127 External Review Flag: No External Review External Review Incorporated into Response: No

C omment Excerpt:
The industry is investing billions of dollars to effect the current transition. But there is a tipping point at which additional investment becomes unaffordable. It would be bad environmental and economic policy to squander resources on unnecessary or excessive regulation in one area, limiting the ability of the industry to complete investments to meet other more beneficial environmental, economic, and energy regulations and goals.
The proposed steam electric ELG rule is a case in point. As discussed below, EPA has adopted very conservative assumptions and extrapolated from limited data to propose a rule that will have limited environmental benefits and significant costs. This action is not compelled by the CWA, which requires that contr ols on existing sources be available and economically achievable. If EPA nonetheless issues a final rule that consumes limited capital to install controls that are not cost

- effective to pursue negligible environmental benefits, the funds expended will not be available to meet future EPA regulations or for other more beneficial uses. 1 The cumulative impact of the multiple regulations facing the electric utility industry, if not the individual regulations themselves, already is forcing some plant closures a nd threatening to strand newly upgraded assets.
To avoid and minimize such adverse consequences, any final steam electric ELG rule needs to meet three objectives: (1) it should be based on accurate, representative data and sound analyses; (2) it should in clude only cost

- effective requirements; and (3) it should provide for flexible implementation and reasonable compliance deadlines. Such objectives will help to ensure net benefits, minimize unnecessary costs, and allow plant owners to make rational decisi ons taking into account all the new air, water, and solid waste regulations. Meeting these objectives will help to ensure that electricity rates remain reasonable and electricity supply and delivery remains reliable as the electric power industry transitio ns to a more modern, lower emissions fleet. Unfortunately, the proposed rule does not meet these objectives

1 Utilities are still assessing how they will comply with various final and proposed EPA rules, such as the Mercury and Air Toxics Standards Rule , Cross State Air Pollution Rule, CoolingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 141 Water Intake Structures Proposal, and Coal Combustion Residuals (CCR) Proposal. In addition, EPA has just today proposed a rule to control greenhouse gas emissions from electric utilities.
Comment Response:

EPA d isagrees that the final rule provides “negligible environmental benefits” as claimed by the commenter. The preamble, EA Report, and BCA describe the environmental improvements and benefits of the rule. For example, EPA estimated monetized benefits ranging between $450.6 million to $565.6 million per year (using a 3 percent discount rate). In accordance with the Clean Water Act, EPA determined that the final rule is technologically available, economically achievable, and has acceptable non

- water quality envi ronmental impacts (see preamble section VIII). For the role of cost

- benefit analysis in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

- 2009

- 0819

- 4464

- A1, Excerpt Number Number 3 (in comment code 6.e).
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2, Excerpt Number 22, regarding EPA’s consideration of the cumulative impacts of multiple regulations facing the electric utility industry.
See response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 126 (comment code 28.f) for a discussion of the three objectives listed by the commenter.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 75 External Review Flag: No External Rev iew External Review Incorporated into Response: No
Comment Excerpt:
2. Chemical precipitation plus biological treatment is economically achievable.
EPA has estimated that the total capital cost for the 116 plants that would need to retrofit with biologic al treatment is $2.5 billion, and that total O&M costs across these same plants would be $257 million. The data show that, considering the size and revenues of this industry, it can reasonably bear these costs.
Option 3 would increase annual costs by appr oximately 0.6% and increase variable production costs by 0.5%, and would result in no change in generating capacity. 301 Option 4 would increase annual costs by 1.4%, variable production costs by 1%, would cause a 0.1% increase in unit retirements. 302 Eve n if all of the costs of either Option 3 or Option 4 were attributed to biological treatment of FGD wastewater

– which they are not, making it a highly conservative assumption

– the costs could still be reasonably borne by industry.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 142 Although EPA did not di rectly evaluate the cost

- to

- revenue ratios for biological treatment standing alone, it did so for the options including a biological treatment component

— Options 2, 3, and 4

— and the results confirm that this technology is affordable. Even the most expensiv e of these options, Option 4, would impose annualized compliance costs of more than 3 percent of revenue for only 48 out of 1,079 plants. 303 Nearly 800 plants would experience no costs, 111 plants would experience costs of less than 1 percent of annual re venues, and 117 plants would experiences costs of between 1 and 3 percent of annual revenues. 304

The baseline cost

- to

- revenue analysis assumes

—unrealistically

— that utilities would pass on none of the costs to their customers. EPA did conduct a sensitivity analysis to account for the likelihood that 50% of these costs could be passed through to consumers; that sensitivity analysis illustrates the affordability even more starkly. For Option 3, assuming that plants could pass through 50 percent of their cost s to consumers, only three plants would see a cost

- to

- revenue impact that is greater than 3 percent. For Option 4, that number increases to only ten plants. 305 As biological treatment is a part of each of these options, it follows that it too, is economi cally achievable for the industry as a whole.

301 78 Fed. Reg. at 34,498.

302 Id.

303 RIA at Table 4

- 1.

304 Id.

305 RIA, Appendix B, at Table B

- 2.
Comment Response:
See response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 217 in comment code 28b.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 154 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 143 Using a 3% discount rate, the total social costs of Options 4 and 5 are $1.38 billion and $2.32 billion per year, respectively. 654 Using a 7% discount rate, the total social costs are $1.32 billion and $2.2 billion annually for Options 4 and 5. 655 EPA never discloses the annual revenues of the plants subject to this rule, and we were unable to make the calculation ourselves because of revenue information redacted as CBI from the responses to the survey questionnaire. Noneth eless, as context for the total annual compliance costs, it is worth noting that 2011 revenues for retail sales of electricity were $371 billion. 656

The costs of both options can be reasonably borne by the industry as a whole based on the cost

to

- revenue ratios EPA estimated. Under Option 5, nearly three quarters of the entire industry will have no compliance costs, and an additional 8% of plants will have costs that are less than 1% of revenues. 657 Under Option 5, 82% of plants have costs less than 1% o f revenues, and EPA claims that “[e]ntities incurring costs save below 1% of revenues are unlikely to face economic impacts.” 658 According to EPA's own data and benchmarks, 82% of the industry is “unlikely to face economic impacts” from Option 5, which di rectly contradicts EPA's assertion that Option 5 has a “high total industry cost” and “may not be economically achievable.” 659 Indeed, EPA states in the RIA that its entity

- level cost

- to

- revenue analysis indicates that for all options, “the entity

- level c ompliance costs are low in comparison to the entity

- level revenues; very few entities are likely to face economic impacts at any level.” 660

Moreover, by EPA’s own admission, the “screening level” cost

- to

- revenue analysis overstates the economic impacts of Options 4 and 5. EPA’s cost

- to

- revenue ratios are biased toward overestimating costs, because EPA made the “counterfactual, conservative assumption of zero cost pass

- through” of compliance costs from utilities to ratepayers. 661 In other words, EPA

assume d that utility companies themselves would bear 100% of the compliance costs of the rule, despite the fact that utilities in a majority of states are regulated by public utility commissions pursuant to state laws that authorize utilities to incorporate envi ronmental compliance costs into their rates. 662 EPA conducted only one sensitivity analysis to correct this obvious bias by assuming that 50% of costs would be passed on to customers through higher rates. Unfortunately, EPA conducted the sensitivity for O ption 4 but not for Option 5, because EPA eliminated Option 5 from further consideration after screening level analyses

-

- that is, the cost to revenue ratio analysis erroneously assuming that the company bears 100% of the compliance costs. Nonetheless, E PA’s sensitivity analysis for Option 4 shows that an assumption of zero pass

- through costs significantly biases the results of EPA’s cost

- to

- revenue analysis by showing a greater economic impact than is likely to occur, as the following table demonstrates.

Table 7Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 144 Under a 50

- 50% split between the company and customers, Option 4 would cause 92% of plants to incur compliance costs less than 1% of revenues, which EPA claims is a level at which a plant “is unlikely to face economic impacts.” As a result, the evidence in the record does not support EPA's rejection of Option 4 because of compliance costs. 665

Just as the 50

- 50 sensitivity analysis showed that the economic impacts from Option 4 would be far lower than EPA initially estimated, the sensitivity anal ysis would likely show that the economic impacts from Option 5 would be dramatically lower than EPA calculated. In particular, the number of plants and parent companies incurring compliance costs less than 1% of revenues would be far greater in a scenario where companies can pass on some of the compliance costs to customers. This undermines EPA's rationale for rejecting Option 5, since the sensitivity analysis shows that changing EPA's counterfactual, conservative assumption that companies will bear 100% of the compliance costs changes the results significantly.
Moreover, EPA has presented no basis for the cost

- to

- revenue thresholds it has selected. EPA has presented no analysis of the electric power industry to indicate that 1% or 3% of revenues is a meaningful number for the industry. Nor has EPA substantiated its assertions that costs greater than 1%, or greater than 3%, the revenues indicates economic stress. EPA has set the bar for economic stress much higher in other rulemakings, claiming that co sts equal to 5% of revenue are a “moderate” impact. 666 Nonetheless, even under these unsubstantiated thresholds, the cost

- to

- revenue ratios for Options 4 and 5 are comparable to the cost

- to

- revenue ratios of other final effluent guidelines. 667

EPA modeli ng of early plant retirements caused by the rule demonstrates that the costs of Options 4 and 5 can be reasonably borne by the industry as a whole. EPA unjustifiably eliminated Option 5 at an early stage and thus did not model the impact of Option 5 on pl ant retirements. According to EPA's modeling of Option 4, however, that option would cause a net decrease of only .1% of total industry capacity, equivalent to 317 MW. 668 This represents nine units expected to close early as a result of Option 4, id. at 34,472, out of over 2000 units in the industry. 669 The percentage of plants expected to close early as a result of Option 4 are far lower than the projected closures for many other final effluent limitations guidelines. 670 Courts have consistently upheld final effluent limitations guidelines that EPA projected would cause some plants to shut down. 671 Having approved final rules determining that the Clean Water Act’s stringent BAT mandate required effluent limitations to be set at a level that would cause a far greater percentage of the affected industry to retire early, EPA has no basis for rejecting Option 4 or 5 on the grounds that they would lead to excessive plant closures.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 145 Even judged by cost

- effectiveness, 672 which is not the appropriate test, 673 bo th Options 4 and 5 can be reasonably borne by the industry. Options 4 and 5 would cost $70 and $111 per TWPE. 674 The cost

- effectiveness of Option 4 is below the cost of four other final effluent limitations guidelines, and close to the cost of two additi onal final guidelines. 675 The cost

effectiveness of Option 5 is lower than the cost of two final effluent limitations guidelines, and is roughly 4 times less expensive than the most expensive guidelines EPA has promulgated. 676

Even under this test

– whic h is not the appropriate standard for EPA to use when determining BAT

– both Options 4 and 5 pass, and are reasonable.
Every form of cost analysis that EPA has conducted indicates that the costs of both Options 4 and 5 can be reasonably borne by the indust ry as a whole. Whether the agency considers total costs relative to total industry revenues, the cost

- to

- revenue ratio at the plant or parent

- company level, plant closures, or even the unlawful cost

- effectiveness metric, the costs of Options 4 and 5 can be reasonably borne by the electric power industry. Accordingly, both Options 4 and 5 are economically achievable and there is no support in the record for rejecting them on economic grounds.

654 78 Fed. Reg. at 34,493.

655 Id.

656 EIA, Table 2.3, Revenue from Retail Sales of Electricity to Ultimate Customers, available
at http://www.eia.gov/electricity/annual/html/epa_02_03.html.

657 78 Fed. Reg. at 34,494.

658 Id. at 34,495.

659 Id

. at 34,473.

660 RIA at 4

- 9. EPA's parent

- company level analysis showed that of 507 parent companies, only 20 would have costs between 1% and 3% of revenues and only 15 would have costs greater than 3% of revenues. Id. 442 parent companies would have com pliance costs less than 1% of

revenues. Id.

661 Id. at 34,494.

662 RIA at 2

- 18 to 2

- 19; see also M.J. Bradley & Associates LLC, Public Utility Commission Study (Mar. 31, 2011) (prepared for EPA's mercury and air toxics rule), available
at http://www.epa.gov/airtoxics/utility/puc_study_march2011.pdf. Moreover, in many traditionally regulated states, the costs of environmental compliance are added to rate base and companies are not only reimbursed for their compliance costs but earn a rate of return on capital investments.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 146 663 All figures in this role come from 78 Fed. Reg. at 34,494.

664 All figures in this row come from RIA at B

- 2.

665 See 78 Fed. Reg. at 34,473.

666 See 69 Fed. Reg. 51,892, 51,916 (Aug. 23, 2004) (“facilities show additional moderate impacts if they are not projected to close but incur compliance costs in excess of 5 percent of facility revenue”).

667 50 Fed. Reg. 45,212, 45,233 (Oct. 30, 1985) (compliance costs less than 1% of revenues for most firms in the metal molding and casting industry); 69 Fed. Reg. 51,892, 51,917

- 18 (Aug. 23, 2004) (5.8% of commercial facilities in the concentrated aquatic animal production industry would have costs greater than 3% of rev enues under the final rule).

668 78 Fed. Reg. at 34,498.

669 Id. at 34,447.

670 65 Fed. Reg. 81,242 (Dec. 22, 2000) (11.7% of centralized waste treatment plants expected to close); 52 Fed. Reg. 42,522 (Nov. 5, 1987) (4% of chemicals manufacturing facilitie s expected to close); 48 Fed. Reg. 49,126 (Oct. 24, 1983) (3.8% of aluminum forming plants expected to close); 69 Fed. Reg. 51,892 (Aug. 23, 2004) (2.9% of concentrated aquatic animal production plants expected to close); 47 Fed. Reg. 52,848 (Nov. 23, 198 2) (2.5% of leather tanning plants expected to close); 63 Fed. Reg. 18,504 (Apr. 15, 1998) (2.3% of pulp and paper mills expected to close).

671 See, e.g.
, Am. Paper Inst. v. Train , 543 F.2d 328 (D.C. Cir. 1976) (upholding BPT guidelines that EPA projected would cause 7

- 10 out of 188 paper mills to shut down); Ass’n of Pac. Fisheries , 615 F.2d at 808

- 09 (upholding BPT limits that EPA estimated would cause 33% of

non

- remote Alaskan salmon canning facilities to close and would cause 57% of non

- remote Alaskan fresh and frozen salmon facilities to close); Weyerhaeuser , 590 F.2d at 1047 (rejecting challenges to effluent guidelines that EPA estimated would cause 8 plants to close); Chem. Mfrs. Ass'n, 870 F.2d at 250

- 51 (upholding as reasonable effluent guidelines that EPA stated might cause 14% of indirect dischargers to close).

672 In the attached report, Appendix E, Dr. Phyllis Fox notes that the cost

- effectiveness for bottom ash conversions is inflated because EPA has overestimated the cost of converting to zero discharge systems. See Fox Report, Appendix E, at 17. For example, EPA has calculated cost

effectiveness at the unit level and ignored the cost savings from retrofitting multiple units at the same plant or multiple plants in the same fleet, thereby driv ing up the cost

- effectiveness numbers. Id.

673 Cost

- effectiveness measures cost as a function of pollutant removals at the plant level, whereas the proper legal test is whether the industry as a whole can reasonably bear the costs of a control technology. At least one circuit has held that EPA is not required to conduct a cost

-Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 147 effectiveness analysis for BAT guidelines. Responding to the argument that “EPA is under a duty to make a reasonable determination with regard to cost effectiveness,” the Fifth Circu it held that “EPA is not required to show a direct cost/benefit correlation, but only that a beneficial substitution is ‘technologically and economically achievable.’” API v. EPA , 858 F.2d 261, 264 n.4 (5th Cir. 1988).

674 See 78 Fed. Reg. at 34,504.

675 R IA at D

- 7 to D

- 8 ($84, $96, $121, and $404 per TWPE for the metal molding and casting, pharmaceutical manufacturing B/D, aluminum forming, and electrical and electrical components industries, respectively, and $65 and $69 per TWPE for waste combustors and nonferrous metals forming and metal powders industries).

676 Id. ($121 and $404 per TWPE for the aluminum forming and electrical and electronic components industries).
Comment Response:
The commenter points to results of the screening

- level cost

- to

- reve nue analyses to make the case that proposed options 4 and 5 are economically achievable. First, regarding the thresholds used by the Agency as screening

- level indicators of relative impacts (i.e., 1 percent and 3 percent), EPA selected these thresholds mor e as a convention based on values also used in the RFA/SBREFA analyses, than based on an industry

- specific analysis of the levels above which plant closures may be expected. The ratios indicate the potential for economic stress only to the extent that high er ratios are more likely to indicate such stress than the lower ratio. The use of general threshold is appropriate for a screening

- level analysis where a key purpose is to compare regulatory options or to provide context for the magnitude of compliance co sts relative to revenue. In determining that the final rule is economically achievable, EPA did not rely on its cost

- to

- revenue analyses, but considered the more detailed analysis conducted using the IPM model, which takes into account the electricity mark et where the plants operate to project electricity generation and plant closures.
The final rule establishes limitations and standards for existing sources based on Option D, which is similar to proposed Option 4, but unlike proposed Option 4, it does not contain limitations and standards applicable to the discharge of combustion residual leachate based on chemical precipitation, nor does it contain BAT limitations and PSES applicable to the discharge of non

- chemical metal cleaning wastes. Section VIII of t he preamble explains the basis for EPA’s decision to select Option D for existing sources, including why EPA did not identify chemical precipitation as the technology basis for control of pollutants in discharges of combustion residual leachate and its dec ision regarding non

- chemical metal cleaning wastes. As explained in the preamble, EPA determined that Option D is economically achievable for the steam electric industry as a whole, based on its expected impacts on steam electric generating capacity as ref

lected in EPA’s IPM analysis detailed in Chapter 5 of the RIA document.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 148 Regarding EPA’s rejection of Option F (substantially similar to proposed Option 5) as the basis for BAT, see Section VIII of the preamble and EPA’s response to related comment DCN EPA

HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 216 in comment code 28.b.

For the role of cost

- effectiveness in EPA's decisions for the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerp t Number 27 in Comment Code 6.h.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 219 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

2. Reliance on BPJ de terminations will disproportionately affect environmental justice communities.
As noted above, it is challenging and rare for environmental organizations such as the undersigned commenters to marshal the resources to comprehensively evaluate a BAT determin ation for a particular plant. Clearly, most impacted local communities lack these kinds of resources. Thus, a critical flaw with relying on case

- by

- case BPJ determinations is that BAT determinations will vary by jurisdiction and, even within a single jur isdiction, may vary depending on whether a local community or environmental organization is able to participate in the administrative process and has the resources to advocate for protective permit limits. Communities without resources to engage in the per mitting process in this way are much less likely to be able to compel the permitting authority to issue a permit containing strong BAT

based limits. EPA should have evaluated the environmental justice implications of two of its preferred options

— 3a and 3b

— which would fail to provide the same protection to under

resourced communities as a uniform national standard. EPA’s environmental justice analysis fails to acknowledge the implications of reliance on BPJ for these groups. 358

358 See 78 Fed. Reg. at 3 4,532; RIA at 10

- 2 to 10

- 5.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 218 in comment code 28.b.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 149 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 220 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

B. THE ELECTRIC POWER INDUSTRY CAN AFFORD THE TECHNOLOGIES THAT WOULD ELIMINATE THE D ISCHARGE OF FLY ASH TRANSPORT WATER.
As explained above in Section II, the relevant test for economic achievability is whether the costs can be reasonably borne by the industry as a whole. 394 The technologies for dry fly ash handling meet this test.

The e conomic impact of requiring dry handling of fly ash is relatively small given that the overwhelming majority of plants that generate fly ash already use dry handling technology. EPA projects that basing the BAT limits on dry handling would cause 66 plants 395 to incur compliance costs. 396 This amounts to only 12

- 13 percent of all coal, coke, and oil plants. 397 Put differently, 87

- 88 percent of all coal and oil plants would have zero compliance costs to comply with a BAT standard based on dry handling of f ly ash.
Even if EPA focuses on the 481 coal, coke, and oil plants that generate fly ash, 398 only 14 percent of plants would face compliance costs. And even if the agency zeroes in on coal and coke plants, which generate the greatest amount of fly ash, onl y 19% of coal and coke plants would face compliance costs. 399 81% of coal and coke plants would face zero compliance costs because they already have dry handling systems in place. A rule that would lead 81% of the most affected plants to incur no complia nce costs is economically achievable.
The total, industry

- wide cost of a zero discharge standard can be reasonably borne by the industry. EPA calculates that the 66 plants that would have to convert to dry handling would spend $398 million on capital costs , $177 million on operating and maintenance costs per year, and an additional $20.7 million per year on 10

- year recurring costs. 400 We are unable to comment on the compliance costs for specific plants, since the plant

- level data has been redacted by EPA. 4 01 As a rough guide to the plant

- level costs, we divided these costs by 66, the number of affected plants. Based on this calculation, the average plant would incur $6 million in capital costs and approximately $3 million in O&M costs per year. 402

Whatever cost metric one uses, these costs are achievable for the electric sector as a whole. Since EPA has analyzed the cost of regulatory options rather than the component costs of treating different waste streams, we can examine the economic impact of t he various options that include dry handling of fly ash as BAT. EPA conducted the full suite of cost analyses for only two options, Options 3 and 4. Option 4 includes dry handling for fly ash, and the recordEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 150 demonstrates that Option 4 is economically ac hievable, which means that each of the component parts of Option 4

— including dry fly ash handling

— is economically achievable. 403

For Options 3 and 4, EPA presented a cost

- to

- revenue screening analysis. Option 4 would

cause 798 plants to devote 0% of their revenues to compliance costs; 117 plants would spend 1

- 3% of the revenues on costs, and only 48 plants would have a cost

- to

- revenue ratio greater than 3%. 404 EPA asserts that “entities incurring cost below 1% of revenue are unlikely to face economic impac ts,” 405 and 84% of plants will have costs at or below 1% of revenues. This suggests that the industry as a whole can easily bear the cost of dry fly ash handling that is part of the cost of Option 4.
Option 4 would increase variable production cost by onl y 1% on a per megawatt hour basis. 406 EPA modeling indicates that Option 4 would result in only a .1% increase in retirements (relative to the baseline capacity of the industry). 407 Even if all of the costs of Option 4 were attributable to dry fly ash han dling

– which they obviously are not

– the costs are so small that only .1% of total industry capacity would retire early.
Finally, the cost effectiveness of requiring dry handling of fly ash is $27 per TWPE, 408 which is well within the range of cost effec tiveness values EPA has found reasonable in other ELGs. 409

In short, whether one determines economic achievability based on the total cost to industry, cost to revenue ratios, plant closures, or cost

- effectiveness, dry handling of fly ash is economically

a chievable. As explained infra Section IX, it is unlawful for EPA to base its BAT determination on cost metrics other than the standard for economic achievability articulated by the courts, namely, whether the costs can be reasonably borne by the industry a s a whole. But even assuming, for the sake of argument, that all of the cost metrics EPA has evaluated in this rulemaking are appropriate potential bases for a BAT determination, dry fly ash handling is economically achievable under any of them. Therefor e, there can be no dispute that the cost of dry fly ash handling can be reasonably borne by the industry as a whole and therefore is economically achievable.

394 Waterkeeper Alliance v. EPA , 399 F.3d 486, 516 (2d Cir. 2005); Rybachek v. EPA , 904 F.2d 127 6, 1290

- 91 (9th Cir. 1990); Am. Iron & Steel Inst. v. EPA , 526 F.2d 1027 (3d. Cir. 1975).

395 This excludes certain small (<50MW) and oil

- fired units. If those plants are included, 76 plants would incur costs to convert from wet

- sluicing to dry vacuum hand ling of fly ash. Incremental Costs and Pollutant Removals at 7

- 4.

396 Id. at 7

- 4 n.43.

397 See TDD at 4

- 16 (calculating that there are 527 to 552 coal, coal, and oil plants).

398 Id. at 7

- 22.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 151 399 Id. at 7

- 23.

400 Id. at 9

- 40.

401 See Appendices to Increme ntal Costs and Pollutant Removals.

402 TDD at 9

- 40.

403 Like Option 4, Option 3 is economically achievable. However, in the technologies proposed as BAT for waste streams other than fly ash transport water fall, Option 3 falls far short of what the Clean W ater Act requires.

404 78 Fed. Reg. at 34,494.

405 78 Fed. Reg. at 34,495.

406 78 Fed. Reg. at 34,498.

407 Id.

408 TDD at 8

- 34.

409 RIA at D

- 8 (11 final effluent limitations guidelines have cost

- effectiveness values greater than or equal to $27 for direct dischargers).
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 100 in comment code 28.b.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 221 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA's analyses of Option 4, which would require zero discharge of bottom ash transport water for all units greater than 50 MW, show that the economic impact of requiring zero discharge of bottom ash can be reasonably borne by the industry as a whole. Option 4 would increase annual costs by approximately 1.4% and increase variable production costs by 1%. 437 Option 4 would cause a 0.1% increase in unit retirements. 438 Even if all of the costs of Option 4 were attributedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 152 to zero discharge of bottom ash transport water

– which they are not, making it

a highly conservative assumption

– the costs could still be reasonably borne by industry, since they would increase annual costs by roughly 1% and cause a less than 1% increase in unit retirements.
The impacts of Option 4 are also reasonable when viewed through the lens of cost

- to

- revenue ratios. Under a zero discharge standard f or plants greater than 50 MW, 85 percent of plants would incur costs that are less than 1 percent of revenues, 439 which EPA claims means that they “are unlikely to face economic impacts.” 440 Under Option 4, only 48 plants

– 4 percent of the industry

– wou ld incur compliance costs greater than 3 percent of revenues. And those costs include the cost to treat all waste streams (FGD wastewater, fly ash transport water, etc.). Given that the costs of Option 4 as a whole are achievable, the component cost to c onvert all units greater than 50 MW to zero discharge systems is also achievable.
Zero discharge of bottom ash is economically achievable if cost

- effectiveness is considered as well. Requiring all units greater than 50 MW to meet a zero discharge standard for bottom ash transport water would cost $107 per TWPE. 441 This is well within the cost

- effectiveness values that EPA has approved in other effluent limitations guidelines; $107 per TWPE is lower than the cost

- effectiveness of the final ELGs for seven s eparate industries. 442 EPA has issued final effluent limitations guidelines with cost

- effectiveness values nearly four times as high as the cost

- effectiveness of bottom ash retrofits. 443

437 78 Fed. Reg. at 34,498.

438 Id.

439 78 Fed. Reg. at 34,494.

44 0 Id. at 34,495.

441 TDD at 8

- 34.

442 RIA at D

- 8 ($404 per TWPE for direct dischargers in the electrical and electronic components industry; $155, $175, $111, $116, $127, and $380 per TWPE for indirect dischargers in the aluminum forming, centralized waste treatment, leather tanning, metal molding and castings, metal products and machinery, and transportation equipment cleaning industries, respectively).

443 See id.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 105 in c omment code 28.b.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 153 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 223 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
As discussed in greater detail elsewhere, EPA’s screening

- level analysis does not support EPA’s dismissal of Options 4 and 5 for existing plants. 633 EPA states that this “analysis, while helpful to understand potential cost impact, does not generally indicate whether profitability is jeopardized, cash flow is affected, or risk of financial distress is increased.” 634 Furthermore, even incorrectly assuming that all compliance costs will be borne by utilities without at least some part passed on to consumers in the form of higher utility rates, 635 the results of the “screening

- level analysis shows that the entity

- level compliance costs are low in comparison to the entity

- level revenues; very few entities are likely to face econ omic impacts at any level.” 636

[...]
There is no basis in the record for EPA’s rejection of Option 5 as BADCT based on the increase in total annualized costs in relation to total costs for the new unit. 643 Thus, EPA’s record does not demonstrate that th e costs of Option 5 cannot be reasonably borne by industry, and Option 5 is BADCT for new sources.

633 See infra Section IX; see also attached Synapse Report, Appendix A.

634 RIA at 4

- 2.

635 RIA at 4

- 2.

636 RIA at 4

- 13.

643 EPA may have overestimated the capital costs for a new 1,300 MW coal plant. For example, EPA estimates costs of approximately $2,982/kW, but a Black & Veatch calculator last updated in 2011 estimates costs for this type of unit between $3,000/kW to $4,000/kW. Ryan Pletka PE, Black & Veatch’s (RETI’S) Cost of Generation Calculator (May 16, 2011), available
at http://www.energy.ca.gov/2011_energypolicy/documents/2011

- 05

- 16_workshop/presentations/Ryan_Pletka_B& V.pdf.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 154 Regarding existing sources, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 25, in comment code 28.b.
Regarding cost estimates for new sources, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 150, in comment c ode 26.d

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Table 5 presents the benefit

‐ to

‐ cost ratios calculated by EPA for the proposed steam electric ELGs in relation to ratios for other categories. With one exception, ELGs have been approved either with no benefit

‐ cost analysis or with costs that exceed measured benefits. The benefit

‐ cost ratios of all eight proposed steam electric regulatory options are well within the range of those of approved ELGs.
Table 5. Clean Water Act ELGs and proposed steam electric ELGs: Benefit

‐ cost ratiosEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 155 a EPA infers benefits for Options 3a, 3b, and 4a from analysis for Options 3 and 4. See 78 Fed. Reg. at 34,519, Table XIV

‐ 9.

b EPA omitted air

‐

related benefits for Options 1 and 2. See 78 Fed. Reg .at 34,519, Table XIV

‐ 9.

c EPA omitted air

‐

related benefits for Option 5. Here, we have added Option 4's air

‐ related benefits to Option 5's non

‐ air

‐ related benefits to provide a lower bound for Option 5 benefits. See 78 Fed. Reg. at 34,519

‐ 34,518, Tables XIV

‐

8 and XIV

‐

9.
Comment Response:
EPA agrees with the com menter that ELGs have been promulgated in the past that have benefit

cost ratios that are lower than those of the various ELGs options EPA considered in this rulemaking. The criteria for BAT and EPA’s rationale for its BAT determination in this final rule are described in the preamble (see preamble sections IV and VIII). See response to DCN EPA

HQ

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e) regarding the role of cost

benefit analysis in EPA’s decisions on the final steam electric ELGs.

Comm enter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 156 Comment Excerpt:
In a more recent study, Frank Ackerman examines the debate surrounding regulatory cost impacts, and reviews reports by the Office of Management and Budget and by consultants to the Small Business Administration, which claim to find substantial regulatory compliance costs. 46 He finds a series of errors and misrepresentations, which tend to exaggerate the widely reported bottom

‐ line estimates of regulatory costs. The Small Business Administration, in particular, has sponsored an annual series of s tudies estimating ever

‐ more ‐ alarming total costs of regulation; careful examination shows that these costs are based on fanciful extrapolation at best, combined with misuse of statistical evidence. The 2010 study, for example, reports an alarming $1.75 tri llion annual cost of regulations. Two

‐ thirds of that putative cost, however, is based on a single regression estimate linking per capita income to a World Bank index of regulatory quality. That regression analysis suffers from multiple fundamental flaws, i ncluding misunderstanding and misrepresenting the World Bank index, boosting significance levels by padding the database with 7 years of near

‐ identical data, and failing to distinguish between correlation and causation. (Additional serious problems affect the remaining one

‐ third of the estimated cost ofregulations.) 47

Another recent study examines predicted and actual price impacts of Department of Energy (DOE) appliance and equipment energy efficiency standards. Across nine rulemakings, DOE estimated an av erage increase in the manufacturers’ selling prices of $148; the actual average change was a decrease of $12. 48

46 Ackerman, F. "The unbearable lightness of regulatory costs." Fordham Urban Law Journal 33 (2005): 1071

‐ 1095.

47 Heinzerling, L., and F. Ack erman, “The $1.75 trillion lie,” Michigan Journal of Environmental and Administrative Law 1 (2012): 127

‐ 158.

48 Steven Nadel and Andrew deLaski, “Appliance Standards: Comparing Predicted and Observed Prices,” American Council for an Energy

‐ Efficient Econom y, 2013, http://www.aceee.org/research

‐ report/e13d.
Comment Response:
The commenter does not identify any specific errors that it believes are presen t in EPA’s analysis of the costs of the ELGs. In analyzing the costs of the ELGs, EPA used the best available and representative data, including with respect to relevant technologies and the plants to which the final rule applies. Although EPA’s estimates are subject to uncertainty, as detailed and discussed in the supporting documents for the final rule, they are reasonable in light of available and relevant data, and they meet the requirements of the Clean Water Act to take into account “costs.” See, e.g.
, CMA v. EPA , 870 F.2d 177, 237

- 38 (5th Cir. 1989) (“The Act requires the EPA to ‘take into account’ the costs of BAT; it does not require a precise calculation. The EPA ‘need make only a reasonable cost estimate in setting BAT’; it is sufficient if the EP A developsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 157 ‘a rough idea of the costs the industry would incur’” (citation omitted).); Kennecott Copper v. EPA, 612 F.2d 1232, 1238 (10th Cir. 1979) (EPA has “wide leeway in its analysis of costs”); BASF Wyandotte Corp. v. Costle , 598 F.2d 637, 662 (1st Ci r. 1979) (upholds using averages in estimating costs); BP Exploration & Oil Inc. v. EPA , 66 F.3d 784, 799

- 800 (6th Cir. 1995) (“The CWA does not require a precise calculation of BAT and NSPS costs” (citation omitted).); NRDC v. EPA , 863 F.2d 1420, 1426 (9th Cir. 1988) (“[T]he Act does not require a precise calculation of BAT costs.”); W eyerhaeuser v. Costle , 590 F.2d 1011, 1045 (D.C. Cir. 1978) (“[Congress] left EPA with discretion to decide how to account for the consideration factors, and how much weig ht to give each factor.”).

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 33 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Surely, a screening measure that “does not generally indicate whether profitability is jeopardized, cash flow is affected, or risk of financial distress is increased” cannot be a reliable measure of the economic achieva bility of ELGs.

 Plant closures: EPA used IPM analysis to estimate plant closures from Options 3 and 4 only. Modeling of Option 4 resulted in a net increase in capacity of 317 MW (less than 0.1 percent of baseline U.S. capacity), which included small net de creases in the NPCC and SPP regions: 159 “As a result, for Option 4, the IPM analysis projects total net closure of nine generating units...The results support EPA’s conclusion that Option 4 is economically achievable.” 160 EPA uses the analysis of plant closu res as evidence of the economic achievability of Option 4 and fails to complete plant closure analysis for Option 5.

 Costs to U.S. households: Using the worst

‐ case assumption (from rate

‐ payers perspective) of 100

‐ percent cost pass

‐ through to customers, ave rage annual costs to U.S. households are far from onerous: $3.89 for Option 4 and $6.46 for Option 5. The highest regional costs were found for the ECAR region: $10.08 and $16.86 per year respectively. The average U.S. household spends about $2,000 each ye ar on electricity, heating and cooking fuels combined. 161

 Job effects: EPA estimates average annual employment increases from all eight regulatory options. Employment increases from Options 4 and 5 are 1,253 and 2,112 job

‐ years, respectively.

EPA fails to make a case that Options 4 and 5 are not economically achievable. Indeed, EPA states outright that Option 4 is economically achievable. Similarly, EPA notes that its analysis of Option 5 “shows that the entity

‐ level compliance costs are low in comparison t o the entity

‐ levelEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 158 revenues; very few entities are likely to face economic impacts at any level.”162 Given reasonable assumptions regarding cost pass

‐ through in the steam

‐ electric industry, it seems likely that economic screening measures for Options 4 and 5 would fall within the bounds of those presented in approved ELGs. Plant closures

— EPA’s ostensible reason for not selecting Option 4

— and costs to households are negligible. Jobs are expected to increase as a result of all of the proposed steam electric r egulatory options, including Options 4 and 5.

159 78 Fed. Reg. at 34,498, Table XI

‐ 6.

160 78 Fed. Reg. at 34,472.

161 EIA, 2009 Residential Energy Consumption Survey, Table CE1.1, http://www.eia.gov/consumption/residential/data/2009/index.cfm?view=consumptio

n.

162 RIA at 4

‐ 9
Comment Response:
The commenter states that EPA “fails to make the case that Options 4 and 5 are not economically achievable.” EPA agrees that Option 4 is economically achievable, as the Agency stated in the proposed rule documentation. For the final rule analysis, EPA updated its economic impact analyses to incorporate additional, more recent information and looked again at the resul ts of these analyses to inform its assessment that the final ELGs are economically achievable. The final rule establishes limitations and standards for existing sources based on Option D, which is similar to proposed Option 4, but unlike proposed Option 4, it does not contain limitations and standards applicable to the discharge of combustion residual leachate based on chemical precipitation, nor does it contain BAT limitations and PSES applicable to the discharge of non

chemical metal cleaning wastes. Sec tion VIII of the preamble explains the basis for EPA’s decision to select Option D for existing sources, including EPA’s decision regarding the control of pollutants in discharges of combustion residual leachate and with respect to non

- chemical metal clean ing wastes. As explained in the preamble, EPA determined that Option D is economically achievable for the steam electric industry as a whole, based on its expected impacts on steam electric generating capacity as reflected in EPA’s IPM analysis detailed in Chapter 5 of the RIA document.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 159 29.a. Benefits

– Analysis scope and benefit categories

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 18 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 With admittedly poor quantification of benefits, the most that the EPA can claim is that it has assessed the costs of achieving certain technical changes in regulation that are motivated by command and con trol concerns.
Comment Response:
EPA disagrees. The Agency used methodologies recommended in EPA’s guidelines for conducting economic analysis (U.S. EPA, 2014) and OMB’s circular A

- 4 t o estimate the benefits anticipated to result from implementation of the ELGs, within the constraints of the available data.
For more on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerp t Number 3 (in Comment Code 6.e).

References:
U.S. EPA, 2014. Guidelines for Preparing Economic Analyses (updated May 2014).

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 23 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Florida generates the third most energy in the U.S. Our economy is largely tourism based wit h a record breaking 89.3 million visits last year and relies on an abundance of fresh clean water that is currently threatened by toxic power plant pollution.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 160 EPA appreciates that nationally

- applicable ELGs have impacts at the local lev el. As noted in the TDD for the final rule, the final technology

- based effluent standards are estimated to reduce loadings of toxic pollutants to waters by nearly 1.5 million toxic

- weighted pounds, nation

- wide, including Florida receiving waters specifical ly. The Agency estimated that the rule will provide a wide range of benefits to population living in proximity to affected receiving waters and to others who use or enjoy these waters. See the BCA for the final rule for details on the benefits.

Commenter Name: Jamie Rhodes Commenter Affiliation: Environment Council of Rhode Island Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4034

- A2 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: No

Comme nt Excerpt:
Our organizations urge EPA to monetize the benefit of reduced costs for drinking water treatment, reduced non

- cancer health impacts and other benefits mentioned in its analysis but not monetized in order to provide a more accurate assessment of the benefits of the proposed rule. Though not required by the Clean Water Act and not allowed to be used to determine best available technology to achieve effluent reductions, 16 . EPA conducted a cost

benefit analysis to accompany this proposal. 17 Our or ganizations are concerned that the Agency chose not to monetize certain benefits, particularly the reduced cost of drinking water treatment for pollutants with drinking water criteria. By EPA’s own estimate, nearly 400 water bodies that are sources of drin king water have been degraded by power plant water pollution. The agency also did not monetize non

- cancer health benefits (other than IQ benefits from reduced childhood exposure to lead and in

- utero exposure to mercury), or benefits to tourism.

16 http://www.cleanwateraction.org/files/publications/OMB%20Letter_4_15_filed2

- 1.pdf

17 Id. at 34,503
Comment Response:
For the final rule, EPA quantified and monetiz ed additional non

- cancer health benefits; specifically, the Agency estimated the benefits to adults of reduced cardiovascular mortality from exposure to lead and arsenic via fish consumption. These analyses are described in greater detail in Sections 3.4 a nd 3.7, respectively, of the BCA for the final rule.
EPA evaluated potential drinking water treatment benefits, such as those resulting from reducing bromide discharges and pollutants for which EPA has established drinking water criteria, and determined th at a quantitative analysis of these benefits was not warranted as they would likelyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 161 be small. EPA reached this conclusion after reviewing baseline and post

- compliance pollutant concentrations in streams where public drinking water intakes are located to de termine whether the ELGs may contribute to reducing treatment costs. EPA instead provides a qualitative discussion of the benefits, including the results of the Agency’s evaluation of potentially affected drinking water intakes and ambient pollutant concen trations in source waters. Chapter 2 of the BCA for the final rule provides detail of this analysis. The discussion also includes a qualitative review of the magnitude and extent of bromide discharges and their potential impacts on drinking water systems a nd public health.

Commenter Name: Lynn Thorp Commenter Affiliation: Clean Water Action (CWA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4451

- A1 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Res ponse: No
Comment Excerpt:

EPA’s Proposed Rule and supporting documents confirm that power plant pollution is directly responsible for toxic discharges which cause contamination in drinking water supplies. In the Benefits and Costs Analysis document for the Proposed Rule , EPA did not monetize benefits of improved surface water quality in terms of drinking water consumption because Public Water Systems are required to meet federal standards and thus are eliminating most of the health risks posed by any SD WA

- regulated contaminant present in power plant discharges. 22 This is a powerful fact. It indicates that in terms of regulated contaminants, PWS and their consumers are essentially footing the bill to reduce the public health risks from power plant water d ischarges. While this benefits public health and is a testament to modern drinking water treatment, it is not an efficient way to control industrial pollution. Eliminating contaminants at their source is vastly more appropriate than relying on our nation’s Public Water Systems to clean up the toxic waste stream from a polluting sector of the economy.

22 EPA, Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Categor y , 2

- 4, (April 2013)
Comment Response:
EPA agrees with the commenter that reduction at the source is preferable to relying on later treatment to remove toxic pollutants from drinking water, and the final rule will accomplish this by having plants reduce their discharges of toxic, bioaccumulativ e, and other pollutants. As discussed in Chapter 2 of the final BCA, EPA acknowledges that source water quality improvement may affect drinking water treatment, but EPA is not able to attribute reductions of drinking water treatment costs to these improvem ents given the presence of other contaminants,Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 162 nature of the treatment process, and other factors that contribute to treatment costs beyond concentrations of individual pollutants discharged by steam electric power plants. As a result, the Agency discusses this benefit category qualitatively.

Commenter Name: S. Fischer Commenter Affiliation: Appalachian Voices Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4479 Comment Excerpt Number: 3 External Review Flag: No External Review External Review Incorporat ed into Response: No
Comment Excerpt:
Clean water is an economic boost for us in Northwest North Carolina in particular. The French Broad River brings in a lot of income to our area, with lots of boaters and kayakers who love the river. We have worked ha rd to clean the river up. Are we going to waste taxpayer dollars that have already been spent on the river, and are we going to made to spend more money to clean up after Duke Energy? They should be required to use the best technology to keep their waste o ut of water.
Comment Response:
EPA appreciates that nationally

- applicable ELGs have impacts at the local level. As noted in the TDD for the final rule, the final technology

- based effluent standards are estimated to reduce loadings of toxic pollutants to waters by nearly 1.4 million toxic

- weighted pounds nationwide. The Agency estimated that the rule will provide a wide range of benefits to population living in proximity to affected receiving waters and to others who use or enjoy these waters. See the BCA for the final rule for details on the benefits.

Commenter Name: Vicki Card Commenter Affiliation: Colorado Springs Utilities Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4483

- A1 Comment Excerpt Number: 14 External Review Flag: No External Review Exte rnal Review Incorporated into Response: No
Comment Excerpt:
Having affordable power and money available to invest in reliable, redundant electric transmission is critical to the protection of human health, the economy and safety. This was vividly illustr ated by 2012’s Hurricane Sandy. Without electrical power, businesses could not operate, thus impacting the local economy; nursing homes and hospitals had to be evacuated;Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 163 heating systems could not operate, impacting human health; communications were hamper ed; and streets went dark putting public safety in jeopardy. A recent study showing that air conditioning has reduced the death rate on hot days by 80% since 1960 7 further illustrates the importance of having affordable electricity to the protection of hum an health.
Colorado Springs Utilities therefore respectfully requests that EPA consider the benefit to human health, public safety, the economy and national security that come with having reliable, affordable, redundant sources of electricity when cond ucting cost benefit analysis of rules affecting the electric power generating industry. These benefits are not typically included in EPA's regulatory analysis.

7 Colorado Springs Gazette, 2013. The Road to a Longer Life by Laura Helmuth. Secti on D Page 1. Tuesday, September 17, 2013.
Comment Response:
EPA agrees that reliable, affordable, redundant electricity supply is important to human health, public safety, the economy and national security. Accordingly, the Agency analyzed the impacts

o f the ELG on the electricity market, on rates paid by households, businesses and other electricity consumers, and on electricity supply reliability. As described in details in the RIA document, these analyses show that the final rule will have a minimal im pact across all metrics EPA evaluated. Impacts on electricity generation are very small, with only 0.2 percent change in the quantity generated by plants to which the final rule applies, which will be offset by increased generations from other plants. Impa cts on generating capacity and production costs are similarly very small (less than 1 percent), as are impacts on electricity rates. Further, EPA also analyzed the effects of the regulation with respect to human health, ecological, and economic productivit y benefits that will result from reducing toxic pollutant discharges to surface waters. These analyses are detailed in the BCA for the final rule.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Cont rol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 29 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
By using dry ash handling, the quality of the fly ash and bottom ash is improved. High

- quality ash, when mixed with cement and water, increases the strength of concrete 26 , thereby making it a sought

- after product by the construction materials industry. As the market for usable ash product increases, the economic incentive for plants to convert to dry ash handling methods is alsoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 164 heightened. 27 Thus, converting to a dry handling method will not only reduce a power plant’s water demand, but it may also provide additional revenues from the sale of fly ash and bottom ash. 28

26 Hea dwater Resources, Fly Ash for Structural Concrete, available at http://www.flyash.com/data/upimages/press/TB.10%20Fly%20Ash%20for%20Structural%20Co ncrete.pdf.

27 Power Engineering, Ash Handling Options for Coal

- fired Power Plants (Feb. 1, 2011).

28 POWER, The Better Environmental Option: Dry Ash Conversion Technology (July 2011).
Comment Response:
EPA notes that the final steam electric ELGs do not require the use of “dry handling.” Rather, the final rule establishes limitations and standards applicable t o the discharge of pollutants from steam electric generating units. Nonetheless, EPA agrees with the general comment about potential increase in beneficial use of coal combustion ash resulting from plants’ decision to convert to dry ash handling and has co nsidered these potential impacts as part of the analyses of the final steam electric ELGs. The analyses are described in Chapter 10 of the BCA and provide information about the potential magnitude of benefits to steam electric power plants and to society m ore generally from enhancing beneficial reuse of the CCR.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 30 External Review Flag : No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA must take into account other benefits associated with reduced surface water withdrawals, including but not limited to, healthier aquatic ecosystems, higher recreatio nal value, agricultural benefits, and increase in property values. EPA’s failure to quantify/monetize the one type of benefit it identified in relation to reduced surface water withdrawals, along with its undercounting of other associated benefits, results in an unfair balancing act where the agency weighs complete costs against incomplete benefits. This biased cost

- benefit analysis is especially troublesome for the most stringent regulatory options (e.g. Options 4 and 5) where EPA overestimated compliance costs and blatantly underestimated the benefits.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 165 For discussion of the benefits from surface water withdrawals specifically, see Section 29.i (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1, Excerpt Number 28).
EPA disagrees that it has not incl uded monetized benefits estimates for healthier aquatic ecosystems and higher recreational value; both are included in the “Ecological Conditions and Recreational Use Benefits from Surface Water Quality Improvements” category. On the more general implicati ons of excluding certain categories of benefits from the monetized estimates, EPA agrees that the monetized values do not reflect all benefits of the regulation. The Agency used the best methods and available data to identify, quantify, and wherever possib le monetize, the benefits of the rule. For the final rule, EPA expanded its benefit analyses in response to comments received on the proposal, including accounting for additional benefit categories (e.g.,

non

- cancer health benefits and reduced maintenance dredging of reservoirs and navigational waterways). As described in Chapter 2 of the final BCA, the Agency was unable to quantify the benefits from improved quality of source water used for public water supply, reduced surface water withdrawals, property v alues, and other categories due to data limitations. The Agency describes these benefits in qualitative terms in the document and, if feasible, presents screening level assessment of potential benefits. In addition, if the Agency had been able to fully mon etize these categories, it would also be important to make sure that benefits weren’t double counted. Overall, EPA considers that its benefit analysis provides a reasonable understanding of the magnitude of the major benefits expected to result from the fi nal rule. The Agency acknowledges that exclusion of some benefit categories is likely to understate the total benefits of the final rule, particularly when compared to costs which are more readily quantifiable.

For more on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number Number 3 (in Comment Code 6.e).

Commenter Name: David Pringle Commenter Affiliation: New Jersey Environmental Federation/Clean Water Action et al. Document C ontrol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4509

- A2 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition to monetizing benefits to drinking water, our organizations urge E PA to monetize (1) the benefits of improved water and sediment quality, healthy natural resources, and reduced costs from pollution impacts and (2) the benefits in improved sediment quality in reducing dredge material management costs. Both nationally and in New Jersey, on top of human health impacts, a high price is paid due to pollution in impacts to aquatic life and efforts to clean up contaminated waters. Moreover, the costs on managing contaminated dredged material is multiple times the cost of managin g clean sediments which have more beneficial uses.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 166 Comment Response:
EPA agrees that the monetized values do not reflect all benefits of the regulation and has recognized this in providing an overview of benefits in Chapter 2 of the BCA. The Agency estim ated, and monetized, several benefit categories associated with improved quality of surface water and ancillary benefits stemming from reduced air emissions. The monetized benefit categories include: reduced incidence of cancer and non

- cancer human health outcomes, improved total value of water resources (including use and nonuse), and improved habitats for endangered and threatened species, among others. In response to comments, the Agency revised its analysis to quantify and monetize additional categories of benefits, including reduced incidence of cardiovascular diseases from exposure to lead and arsenic and avoided cost of maintenance dredging resulting from reduction in sediment discharges. These revisions provide a more comprehensive understanding of t he benefits of the final rule, but EPA recognizes that even these improvements don’t capture all benefits of the final rule. The monetized benefit estimates need to be understood within the broader discussion of the benefits, which also highlights several benefit categories that EPA could analyze qualitatively only, or could quantify but not monetize, such as reductions in the cost of disposing of contaminated dredged material. EPA discusses these other benefits qualitatively in the BCA (see Chapter 2).

C ommenter Name: Thomas H. Adams Commenter Affiliation: American Coal Ash Association (ACAA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Disregarding the impact of this rulemaking on beneficial use would be a significant violation of administrative policy.
Successive administrations have issued executive orders (12866 and 13563) that compel EPA to consider th e impact of its proposed regulations on all sectors of society and the economy. Specifically, Executive Order 13563, entitled “Improving Regulation and Regulatory Review” (Jan. 18, 2011), instructs federal agencies, including EPA, to assess benefits and co sts of regulations in an effort to “impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations.” The order also directs co nsideration of alternative regulatory approaches and allowance for public participation in the rulemaking process.
As stated earlier, any decision by EPA to disregard information on CCR beneficial use would exclude from the cost

‐ benefit analysis considera tion of the fate of more than 40 percent of the CCRs generated annually in the U.S. It would further disenfranchise the participation of tens of thousands of individuals and entities who submitted testimony on beneficial use in publicEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 167 hearings and the publ ic comment process surrounding the agency’s proposed rule. Both consequences would be direct and substantial violations of the executive orders.
In addition to executive orders, EPA is compelled to consider information it has received about beneficial use under the Administrative Procedure Act (“APA”). The APA allows reviewing courts to set aside agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” EPA has received voluminous public comments on its proposed CCR rule that are both relevant and significant pertaining to beneficial use. EPA is not entitled to simply set this information aside without providing analysis and response.
Comment Response:
EPA disagrees with the commenter that it has not fo llowed the Administrative Procedure Act because, as stated by the commenter, “EPA received voluminous public comments on its proposed CCR rule that are both relevant and significant pertaining to beneficial re

use.” Comments specific to the proposed CCR ru le are outside the scope of the ELG rulemaking. EPA addressed public comments on the CCR rule in the context of that rulemaking (See Docket EPA

- HQ

- RCRA

- 2009

- 0640

- 11970).
EPA agrees with the commenter that changes in coal combustion residuals (CCR) manageme nt prompted by the final rule will allow plants to more readily market CCR for beneficial uses. For the final rule, the Agency estimated the benefits associated with the increased CCR marketability. In its analysis of the CCR market value, EPA relied on th e methodologies used in the analysis of beneficial uses of CCRs in the final CCR rule. As documented in Chapter 10 of the final BCA, EPA estimated that CCR beneficial uses under the final rule will yield a net social value of approximately $31 million annu ally.
See response EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2, Excerpt Number 9, for a discussion of analyses EPA conducted for the final rule to account for enhanced marketability of CCR for beneficial uses.

Commenter Name: Thomas H. Adams Commenter Affiliation: Ame rican Coal Ash Association (ACAA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2 Comment Excerpt Number: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In both rulemakings the impacts of regulations on the beneficial use of CCR has either been minimized or disregarded. The ACAA again calls attention to the significance of beneficial use to the desired outcome of these and all rulemakings

– protection of human health and the environment.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 168 C omment Response:
The commenter is concerned about the impact of the final rule on the “beneficial use of CCR.” First, EPA notes that the final steam electric ELGs do not regulate the beneficial use of CCR. Rather the final rule establishes limitations an d standards applicable to the discharge of pollutants from steam electric power plants. Nonetheless, EPA recognizes that the rule has the potential to increase the beneficial use of coal combustion ash as a result of plants’ decisions to convert to dry ash handling. The Agency accounted for these potential impacts as part of its analyses of the final steam electric ELGs. The analyses are described in Chapter 10 of the BCA and provide information about the potential magnitude of benefits to steam electric po wer plants and to society more generally from enhancing beneficial reuse of the CCR.
Comments specifically pertaining to EPA’s analysis of the CCR rule are outside the scope of this rulemaking. EPA addressed comments on the CCR rule in the context of that rulemaking (see Docket EPA

- HQ

- RCRA

- 2009

- 0640

- 11970).

Commenter Name: Thomas H. Adams Commenter Affiliation: American Coal Ash Association (ACAA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4511

- A2 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
However in an effort to create regulations for the disposal of CCR and process water management, the EPA has created major obstacles to maintaining and increasing beneficial use. Therefore the ACAA must again speak up on behalf of those dedicated to recycling CCP and call attention to the beneficial use impacts of EPA’s regulatory decisions in these and other matters. We strongly advise the agency to take great care to avoid f urther damage to the beneficial use of CCP by overly burdensome and unnecessary regulations.
Comment Response:
EPA disagrees with the commenter that the EPA has created “major obstacles to maintaining and increasing beneficial use.” First, EPA notes that the final steam electric ELGs do not regulate the beneficial use of CCR. Rather the final rule establishes limitations and standards applicable to the discharge of pollutants from steam electric generating units. Moreover, the ELGs do not directly affect the potential for beneficial use of CCR, and in fact may increase the amount of CCR that is available for beneficiation by promoting changes to plant processes (e.g., conversions to dry handling) that should enhance CCR marketability. EPA estimated the pot ential magnitude of benefits to steam electric power plants and to society more generally from enhancing beneficial reuse of the CCR in the BCA for the final rule (see Chapter 10).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 169 Comments specifically pertaining to EPA’s analysis of the CCR rule are outs ide the scope of this rulemaking. EPA addressed comments on the CCR rule in the context of that rulemaking (see Docket EPA

- HQ

- RCRA

- 2009

- 0640

- 11970).

Commenter Name: Becky Smith Commenter Affiliation: Clean Water Action et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4548

- A1 Comment Excerpt Number: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Our organizations urge EPA to monetize the benefit of reduced costs for drinking water treatme nt, reduced non

- cancer health impacts and other benefits mentioned in its analysis but not monetized in order to provide a more accurate assessment of the benefits of the proposed rule. Though not required by the Clean Water Act and not allowed to be used to determine best available technology to achieve effluent reductions, 16 EPA conducted a cost

- benefit analysis to accompany this proposal. 17 Our organizations are concerned that the Agency chose not to monetize certain benefits, particularly the reduced c ost of drinking water treatment for pollutants with drinking water criteria. By EPA’s own estimate, nearly 400 water bodies that are sources of drinking water have been degraded by power plant water pollution. The agency also did not monetize non

- cancer h ealth benefits (other than IQ benefits from reduced childhood exposure to lead and in

- utero exposure to mercury), or benefits to tourism.

16 http://www.clea nwateraction.org/files/publications/OMB%20Letter_4_15_filed2

- 1.pdf

17 Id. at 34,503
Comment Response:
See response to related EPA

- HQ

- OW

- 2009

- 0819

- 4034

- A2, Excerpt Number 11 (comment code 29.a)

Commenter Name: Pamela Ritger Commenter Affiliation: Clea n Wisconsin Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4632

- A1 Comment Excerpt Number: 13 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 170 Comment Excerpt:
As noted in the rulemaking materials, there are a numbe r of benefits that have not been quantified in the net social benefits calculation for these guidelines. Instead, their impacts have been discussed qualitatively. These benefits include the benefits of improved tourism, increased commercial fishery yields, reduced need for water treatment and enhanced property values. 39

The EPA did not quantify the benefits of improved tourism because their overall societal benefits are likely to be small. 40 However, the impact of higher revenues from tourism can have a si gnificant impact at a local level, especially for states like Wisconsin, with its strong tourism sector. Therefore, the social benefits that result from increased tourism are likely underestimated in the EPA benefit

- cost analysis, especially for states lik e Wisconsin. Similarly, the EPA did not quantify the social benefits of increased property values due to lower levels of contamination from combustion wastewater, due to data limitations. 41 Although these benefits would accrue to the property owner, the n et impact represents an overall increase in societal wealth. 42 Accordingly, total social benefits that will result from increased property values have similarly been undercounted in the EPA’s benefit

- cost analysis.

39 United States Environmental Protecti on Agency (U.S. EPA). 2013a. Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (40 CFR 423). EPA

- 821

- R

- 13

- 004, p. 2

- 2. 40 Id . at 2

- 10. 41 United States Env ironmental Protection Agency (U.S. EPA). 2013a. Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (40 CFR 423). EPA

- 821

- R

- 13

- 004, p. 2

- 10. 42 Id.

Comment Response:
EPA agrees with the commenter that the increase in revenues from tourism can have a significant local impact, as discussed in the BCA for the final rule (see Chapter 2). As described in the BCA, tourism may increase in the vicinity of steam ele ctric power plants, while possibly decreasing in other locations, transferring tourism revenues from one area to another. The Agency recognizes that excluding benefits from tourism is likely to understate benefits to some communities (including areas of Wi sconsin), as discussed in Chapter 2 of the BCA for the final rule. However, the Agency also notes that because of transfers, the benefits derived from tourism are likely to be small at the national level. It is therefore not unreasonable to exclude such be nefits from the national level estimates presented in the BCA and discuss them qualitatively as the Agency has done.
EPA also agrees with the commenter that reduced surface water contamination resulting from implementation of the ELGs will likely result in increased property values in the vicinity of affected waters, and that this will yield an overall net benefit to society (see Section 2.4 of the final BCA for detail). EPA notes that the increase in use values associated with water qualityEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 171 improvements on property values is reflected in the total willingness

- to

- pay for surface water quality improvements, which the Agency did quantify and monetize (see Chapter 4 of the final BCA). Therefore, estimates of changes in property values and willingness to pay for water quality improvements are not additive.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 211 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition, EPA has not performed a thorough benefit and cost analysis for three of its preferred options: Options 3a, 3b, and 4a. As EPA explains:
...EPA used its understanding of the was testreams and treatment technologies for these options, along with projections of pollutant reductions for all eight options, to infer total monetized benefits for Options 3a, 3b, and 4a. This is because the five options EPA analyzed can serve as upper an d lower bounds for the benefits of Options 3a, 3b, and 4a. . . . However, EPA is less confident that the approach used to infer benefits for Options 3a, 3b, and 4a based on the results of the other five options would yield reasonable estimates if applied t o the individual categories of benefits (e.g., water quality, air emissions, avoided impoundment failure cleanup costs) and therefore the Agency did not infer values for individual benefit categories but presents category

specific estimates only for Option s 1, 2, 3, 4, and 5.
BCA, p. 1

- 2.
It seems the analysis for three of the four preferred options was rushed and did not adequately analyze all facets of the analysis that EPA thought proper to apply to the other options. While UWAG appreciates EPA’s willingness to consider other options, the Agency still must perform an appropriate level of analysis for those options. To do otherwise deprives the public of an adequate opportunity to review and comment on the analysis.
Comment Response:

For informat ion about benefits in the development of the final ELGs, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).
EPA disagrees that its analysis for the three options referenced by the commenter was rushed. The Agency used a reasonable approach to estimate the potential magnitude of the benefits of three of the eight proposed options, based on information from detailed analysis of the other fiveEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 172 options. This approach provided an appropriate level of analysis by allowing co mparison across the options.
For the final rule, EPA analyzed the five options for existing sources (A through E) described in the supporting documents using the same rigorous approaches for all but one category of benefits; EPA estimated the air

- related b enefits resulting from changes in the electricity generation profile for two of the five options based on outputs from the Integrated Planning Model for these two options. The BCA for the final rule details these analyses.

Commenter Name: James D. Taft Commenter Affiliation: Association of State Drinking Water Administration (ASDWA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4668

- A2 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No

Comm ent Excerpt:
We also believe that the final rule will be on firmer ground and more defensible if it accounts for benefits (both qualitative and quantitative) of avoided drinking water treatment costs and improved health outcomes as a result of this efflu ent guideline being promulgated. The Agency’s current analysis may be under

- representing the potential benefits of the risk management options presented.
Comment Response:
EPA agrees with the commenter that exclusion of avoided drinking water treatment c osts may result in an underestimate of the benefits of ELG revisions, but notes that these benefits are expected to be small in relation to other benefits of the final rule.
EPA agrees that the final rule could result in reduced treatment costs for utiliti es by reducing pollutant concentrations in source waters. As described in Chapter 2 of the BCA, EPA conducted a screening

- level assessment to identify the number of public drinking water sources that may be affected by steam electric power plant discharges in the baseline and may benefit from higher quality source water. This assessment suggested that changes in drinking water treatment costs would be small.
Additionally, EPA does not expect the final regulation to yield significant health benefits from red uced drinking water pollutant concentrations, since public drinking water systems are already required to meet strict treatment levels for pollutants that pose human health risks. There may be some benefits associated with pollutants for which the allowabl e contaminant concentration is higher than the lowest threshold for potential health impacts; however, EPA’s analysis indicated that these benefits would be minimal given the number of affected public water intakes and the population served. Chapter 2 of t he BCA for the final rule provides detail of this assessment.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 173 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 66 External Review Flag: Envr Assess Ex ternal Review Incorporated into Response: No
Comment Excerpt:

4. The public health and economic benefits of mechanical evaporation are much larger than EPA has estimated
Disinfection by

- products are extremely difficult and costly to remove from the public water supply. 252 A study of the water supply for 23 million Californians estimated costs of up to $90 million to treat disinfection by

- products based on current water quality and drinking water standards. 253 As those drinking water standards a re updated to reflect mounting evidence about the harms of brominated disinfection byproducts, and as source water quality continues to decline, it is estimated that those costs could rise to $1 billion. 254

As discussed in the attached report by Synapse En ergy Economics, Inc., Appendix A, because EPA did not attempt to quantify how reduced bromide discharges would reduce water treatment costs for often cash

- strapped water supply systems, this key societal and public health benefit was essentially ignored in EPA’s decision

- making process about BAT for FGD wastewater. 255

Thus, EPA has underestimated both the public health and public financial implications of failing to control bromide levels in FGD wastewater. EPA’s benefit

- cost analysis for Option 5 is theref ore skewed. Moreover, because EPA does not account for brominated disinfection byproducts as part of the toxic

- weighted pound equivalent value that is critical to the cost

effectiveness analysis, the true cost

- effectiveness of mechanical evaporation is s eriously understated.
Drinking water utilities are concerned about escalating levels of bromide in the water supply, as those elevated levels has made it increasingly difficult for them to meet Safe Drinking Water Act requirements for trihalomethanes. 256 Indeed, even at Belews Creek, which operates a biological treatment system, the permitting authority is concerned about bromides in the FGD wastewater. The plant’s 2012 NPDES permit requires, for the first time, monthly monitoring for bromides at the outfa ll from an ash settling pond that receives the effluent from the FGD treatment system. 257 The permit contains a separate requirement to evaluate bromide reduction technologies for these discharges and to coordinate with downstream water systems. 258 If EPA does not select mechanical evaporation as BAT, it will simply be shifting the cost of addressing the bromides problem from the well

- funded electric generating sector onto resource

- limited public water systems.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 174 252 Id. at 20

- 22.

253 Id. at 21.

254 Id.

2 55 Instead, EPA “recommends that permitting authorities consider the potential for bromide discharges to adversely impact drinking water intakes when determining whether additional water quality

- based effluent limits may be warranted.” 78 Fed. Reg. at 34,4 73, 34,477. But EPA may not defer to the WQBEL process its responsibility to regulate, under Section 1311(b)(2)(A), pollutants found in these waste streams.

256 EA at 3

- 11.

257 2012 NPDES Permit for Belews Creek Steam Station, NC0024406, at p.4.

258 Id. at Condition A.(14), p.9.
Comment Response:
EPA shares the concern expressed by the commenter about disinfection byproducts and the potential for steam electric power plant discharges to increase the incidence of these products in treated drinking water. T hus, in the final rule analysis, the Agency evaluated information about the connection between bromide levels and drinking water treatment. The data suggest that concerns may exist on a site

- specific basis. Section 2 of the BCA characterizes the potential impacts to drinking water treatment and human health in the baseline, and describes in qualitative terms the benefits that could accrue from reducing bromide discharges from stream electric plants.

EPA notes that the final rule does not set effluent limits for bromide for the steam electric industry, based on the performance of the best available technology (BAT) for FGD wastewater treatment (chemical precipitation and biological treatment).As discussed further in Section 2.4 of the BCA, EPA encourages perm it writers to consider potential impacts on drinking water intakes, where applicable, when developing permits for steam electric power plants. As noted by the commenter, some permit writers are already including these considerations and requiring that the plant monitor for bromide. In addition, EPA did establish controls on TDS (as an indicator) of bromide for new sources and also included a voluntary incentives program that would address bromide discharges from units at existing steam electric power plants

. See Section VIII of the preamble to the final rule.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 158Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 175 External Review Flag: No External Review Ex ternal Review Incorporated into Response: No
Comment Excerpt:

3. EPA underestimated benefits.
On one side EPA has placed well

- defined, but overestimated, costs, while on the other side of the ledger has placed benefits that the agency itself ackn owledges are incomplete and underestimated. Yet EPA presents tables of costs and benefits as if the two sets of data are equally well

- defined and can be meaningfully compared. 694 Nothing could be farther from the truth, as EPA's own costs and benefits document explains, and as additional materials suggest.
EPA did not monetize whole categories of benefits. Some of these benefits were not discussed at all; some were discussed qua litatively but not quantified or monetized; others were quantified but not monetized. But for all of the following categories, EPA did not assign a monetary value to include in the benefits calculations.

Table 8

– Benefits not Monetized by EPA 695Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 176 The be nefits not monetized by EPA are discussed in the attached Synapse Report.

[...]
For each category of benefits mentioned above, EPA set the value equal to zero. 705 In other words, EPA notes that there is a category of benefits from the rule, but in the f ace of uncertainty surrounding the monetary value of those benefits, treats the value as zero. This systematically biases the cost

- benefit analysis toward prioritizing costs. There are other ways to deal with uncertainty besides setting the value of the u ncertain variable to zero. For example, EPA could develop ranges for each of the categories of benefits. Alternatively, EPA could apply different multipliers to the total monetized benefits to arrive at a series of low, mid, and high cases to account for uncertainty surrounding the un

- monetized benefits. Regardless of how exactly EPA deals with the un

- monetized benefits, one thing is clear: their value is not zero. Treating these categories of benefits as if they have no monetary value is inconsistent w ith EPA's own claim that these are actual benefits from the rule. 706Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 177 694 E.g. , 78 Fed. Reg. at 34,526.

695 Synapse Report, Appendix A, at 22. Benefits containing a * indicate that EPA did not discuss the category in the Benefits and Costs document but did discuss the benefits qualitatively in other documents in the record.

705 Id. at 19

- 35.

706 Id. at 19

- 20.
Comment Response:
EPA recognizes the limitations of the total benefits estimates, but the Agency has been as comprehensive as possible in its an alysis given the available data and tools for estimating benefits. To address commenters’ concerns about excluding a number of benefit categories, EPA revised its benefits analysis for the final rule to include additional categories not monetized in the pr oposed rule, including reduced incidence of cardiovascular disease from exposure to lead and arsenic, avoided cost of maintenance dredging of reservoirs and navigational waterways, and increased marketing of coal combustion residuals for beneficial reuse ( see Chapters 3, 9 and 10 in the BCA). In addition, EPA expanded the qualitative discussion of non

- monetized benefit categories in Chapter 2 of the final BCA. If feasible, the Agency has included information indicating the relative magnitude of the excluded benefits.
Regarding the commenter's suggestion that EPA develop ranges, the Agency notes that it uses ranges to indicate uncertainty in benefit estimates, when such ranges can be reasonably estimated. For example, for the final rule analysis, EPA presents ranges for several categories of benefits, including human health benefits, benefits from avoided impoundment failures, and benefits from water quality improvements.
EPA disagrees that the Agency is treating non

- monetized benefits as equivalent to zero wh en conducting benefit cost analysis. EPA provided quantitative estimates of benefits where possible, and presented the results together with the Agency’s estimate of costs consistent with requirements of Executive Order 12866 (Regulatory Planning and Revie w) and Executive Order 13563 (Improving Regulation and Regulatory Review). As described in the preamble to the final rule, EPA considered both monetized and nonmonetized benefits in support of the regulation.

For more on consideration of benefits in the de velopment of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 178 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA omits numerous critical benefits in its valuation of the proposed ELGs including: reduced adverse health effects due to less exposure to pollutants from recreational water uses; reduced deposition of arsenic, selenium, and other pollutants in sediment on stream and lake beds; improved fisheries yield and harvest quality due to aquatic habitat improvement for commercial f isheries; benefits to the tourism industry from increased participation in water

‐ based recreation; increased property values from water quality improvements; fewer fish trapped and killed by water intake systems (i.e., reduced impingement and entrainment mortality); reduced costs to processing drinking water; reduced health effects from limiting exposure to pollutants in drinking water; eliminated attractive nuisances; reduction of bromide pollution; additional recycling of coal combustion residuals; valu e of land for impoundments for redevelopment; reduced air emissions from impoundments’ parasitic load; reduced air emissions from true dry handling of ash; avoided costs of BPJ determinations; avoided costs of TMDLs; reduced surface water withdrawals and c onsumptive use; and avoided costs of litigation.
Comment Response:
The commenter noted a variety of expected benefits that may result from revising the steam electric ELGs. EPA agrees with the commenter that the listed benefits are real and of critical ecological, social, and economic importance. In the final rule, EPA describes these categories of benefits, although data limitations preclude the Agency from quantifying and monetizing many of them (see Chapter 2 in BCA). Where possible, EPA also provided information about the potential magnitude of these benefits, relative to other benefits the Agency was able to monetize. EPA disagrees that a qualitative discussions of benefits that cannot be quantified or monetized constitute omissions of these benefits , as suggested by the commenter.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 13 External Review Flag: No External Review External Review Incorpor ated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 179 The environmental controls discussed in the proposed steam electric ELGs will prevent the discharge of billions of pounds of pollutants each year and result in important benefits to society. 55 EPA correctly identif ies most of the benefits of the proposed rule (see Table 6 and Table 7 below), but many of these benefits, either in whole or in part, were not included in EPA’s calculations of the total monetary benefit of the regulatory options, and, therefore, were not included in the benefit

‐ cost ratio. The monetary value of benefits is either omitted or undervalued for improvements to human health, the environment and ecosystems, and economic productivity. When EPA is unable to quantify or monetize an ELG impact with sufficient certainty, it effectively values the benefit at zero dollars.

This sub

‐ section first reviews three types of benefits for which monetary values are omitted from the proposed steam electric ELGs:

 Benefits discussed in EPA’s Benefit

‐ Cost Analysis but not given a monetary value: In EPA’s Benefit

‐

Cost Analysis , some benefits that are discussed qualitatively but never given a monetary value. These benefits are effectively valued at zero dollars.

 Benefits discussed in EPA other documentation but not i ncluded in the Benefit

‐ Cost Analysis: EPA discusses several benefits in other supporting documents to the steam electric ELGs but does not include any discussion or monetization of these values in the Benefit

‐ Cost Analysis . These benefits are effectively v alued at zero dollars.

 Benefits not discussed by EPA: Several additional benefits are not discussed in any of the steam electric ELG supporting documents. These benefits are effectively valued at zero dollars.
and then provides an overview of the benefits the EPA did monetize:

 Benefits assigned monetary values by EPA. Fifteen benefits of the ELGs are monetized by EPA; 13 of these are, as acknowledged by EPA, underestimated.

The omitted benefits are summarized in Table 6; monetized benefits are summarized in Table 7 below.
Table 6. Benefits omitted from EPA analysis of proposed steam electric ELGs

Benefit Inclusion Quantification Monetization

Reduced other adverse health effects (cancer and non

‐ cancer) from reduce d exposure to other pollutants (arsenic, lead, etc.) via fish consumption Discussed in BCA but not given monetary value Quantified

(Low) Not MonetizedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 180 Improved fisheries yield and ha rvest quality due to aquatic habitat improvement of commercial fisheries Discussed in BCA but not given monetary value Not Quantified Not Monetized

Benefits to tourism industries from increased participation in water based recreation Discussed in BCA but not given monetary value Not Quantified Not Monetized

Increased property values from water quality improvements Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced impingement and entrainment mortality from reduced surface water withdrawals Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced deposition of toxic pollutants to sediment Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced adverse health effects from reduced exposure to pollutants from drinking water

uses Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced water treatment costs for drinking water and irrigation water from improved quality source water used for drinking and irrigation Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced adverse health effects from reduced exposure to pollutants from recreational water

uses Discussed in BCA but not given monetary value Not Quantified Not Monetized

Reduced bromide pollution in drinking water Discussed in EPA documentation but not included in BCA Not Quantified Not Monetized

Attractive nuisance: Reduced direct exposure to wildlife from surface impoundments Discussed in EPA documentation bu t not included in BCA Not Quantified Not Monetized

Recycling coal combustion residuals Discussed in EPA documentation but not included in BCA Not Quantified Not Monetized

Reduced air emissions from impoundments’ parasitic load Completely omitted benefits Not Quantified Not Monetized

Reduced air emissions from true dry handling of ash Completely omitted benefits Not Quantified Not Monetized

Value of land used for impoundments for redevelopment Completely omitted benefits Not Quantified Not MonetizedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 181 Avo ided costs of BPJ determinations Completely omitted benefits Not Quantified Not Monetized

Avoided costs of TMDLs Completely omitted benefits Not Quantified Not Monetized

Reduced withdrawals and consumptive use of surface water Completely omitted benefits Not Quantified Not Monetized

Avoided costs of litigation Completely omitted benefits Not Quantified Not Monetized

55 78 Fed. Reg. at 34,504

‐ 34,522; and Benefit

‐ Cost Analysis.
Comment Response:
The commenter noted a variety of expected benefits that may result from revising the steam electric ELGs. EPA agrees with the commenter that the listed benefits are real and of critical ecological, social, and economic importance. To address commenters’ concerns, EPA revised its benefits analysis for the final rule to include additional categories not monetized in the proposed rule, including reduced incidence of cardiovascular disease from exposure to lead and arsenic, avoided cost of maintenance dredging of reservoirs and navigational waterways, and increased marketing of coal combustion residuals for beneficial reuse (see Chapters 3, 9 and 10 in the BCA). In addition, EPA provides detailed description of all applicable categories of benefits, although data limitations preclude the Agency from quantifying and monetizing many of them (see Chapter 2 in BCA). Where possible, EPA also provided information about the potential magnitude of these benefits, relative to other benefits the Agency was able to monetize. EPA disagrees that a qualitative discussions of benef its that cannot be quantified or monetized constitute omissions of these benefits, or treating these benefit categories as generating $0 benefits, as suggested by the commenter. As described in the preamble to the final rule, EPA considered both monetized and nonmonetized benefits in support of the regulation.
For a more detailed discussion on some of the specific benefit categories listed, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 14.

Commenter Name: Thomas Cmar Commenter Affiliati on: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 14 External Review Flag: Envr Assess External Review Incorporated into Response: No
Comment Excerpt:

Discussed in EPA’s Benefit

‐ Cost Analysis but not given a monetary valueEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 182 EPA discusses many benefits to which it fails to assign a monetary value, stating that it could not find adequate information to appropriately quantify a dollar impact to society. The benefits discussed qualitatively in EPA’s Benefi t

‐ Cost Analysis but omitted from the total monetary value of the steam electric ELGs include:

 Reduced adverse health effects due to less exposure to pollutants from recreational water

uses

 Reduced deposition of arsenic, selenium, and other pollutants in se diment on stream and lake beds

 Improved fisheries yield and harvest quality due to aquatic habitat improvement for commercial fisheries

 Benefits to the tourism industry from increased participation in water

‐ based recreation

 Increased property values from water quality improvements

 Fewer fish trapped and killed by water intake systems (i.e., reduced impingement and entrainment mortality)
There are also two benefits of the proposed ELGs that are mentioned in the Benefit

‐ Cost Analysis , but for which EPA does not provide any qualitative assessment:

Reduced costs to processing drinking water: EPA includes reduced costs to treat drinking water as a benefit and mentions in a footnote that, “There may also be market benefits associated with the decreased need for drinking water treatment, but EPA did not estimate these benefits as part of its analysis of the proposed ELG.” 56 Consequently, this benefit is not quantified or monetized. 57

Reduced health effects from limiting exposure to pollutants in drinking water: E PA’s Benefit

‐ Cost Analysis omits the reduction in negative health effects caused by improved drinking water quality: “The analysis of human health benefits focuses on the fish consumption pathway only, since EPA assumed that drinking water is treated to r educe pollutant concentrations below [maximum contaminant levels].” 58 EPA acknowledges, however, that there are “documented exceedances of drinking water maximum contaminant levels (MCLs) downstream of steam electric power plants.” 59 The benefits of reduce d cancer exposure from pollutants other than arsenic are omitted because, according to EPA, “[a]mong steam electric pollutants analyzed in the [ Environmental Assessment ], arsenic is the only confirmed carcinogen with a published dose response function.” 60 As such, any potential reduction in cancer rates from exposure to other carcinogens is omitted.
By default, EPA assigns these benefits a zero dollar value in the total monetized benefit of the regulatory options. These values of these omitted benefits ar e not reflected in the final number EPA uses to estimate the social value of the proposed ELG rules.

Discussed in EPA’s other documentation but not included in the Benefit

‐ Cost Analysis
Several other benefits are discussed in background documentation to t he steam electric ELGs, but not in the Benefit

‐ Cost Analysis itself. These benefits, too, are effectively valued at zero dollars in the total monetary benefits of the regulatory options.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 183 Eliminated attractive nuisances: According to EPA’s Environmental As sessment the proposed steam electric ELGs will reduce the exposure of wildlife to pollutants at surface impoundments and constructed wetlands:
Documented case studies demonstrate that wildlife living near steam electric surface impoundments exhibit elevat ed levels of arsenic, cadmium, chromium, lead, mercury, selenium, strontium, and vanadium... Multiple studies have linked attractive nuisance areas at steam electric power plants to diminished reproductive success... EPA estimates that the pollutant loadings associated with the preferred options will decrease the exposure of wildlife populations to toxic pollutants and reduce the threat combustion residuals surface impoundments pose to surrounding wildlife. 61

While EPA makes note of this important benefit of the proposed ELGs and cites several published reports to support their claims, this benefit does not appear in the Benefit

‐ Cost Analysis

. Reduction of bromide pollution: Regulatory Option 5 (discussed in detail in Section 5 below) includes the only contro l technology in the proposed steam electric ELGs that would address pollutants from FGD wastewater that are particularly dangerous in drinking water: boron, bromides, and total dissolved solids. EPA explains that:
[B]romide in wastewater discharges from s team electric power plants located upstream from a drinking water intake has been associated with the formation of trihalomethanes, also known as THMs, when it is exposed to disinfectant processes in water treatment plants. Bromate, a disinfection byproduc t (DBP) associated with drinking water treatment plants that employ ozonation may also increase under the influence of increased bromide in the source water. Human exposure to THMs and DBPs in chlorinated drinking water is associated with bladder

cancer. 62

EPA’s Benefit

‐ Cost Analysis does not discuss or monetize benefits of reduced bromide pollution in drinking water.

Additional recycling of coal combustion residuals: EPA does not discuss or monetize the benefits of the additional recycling of coal combustion residuals that would occur if FGD and other wet handling systems were converted to dry handling systems. Approximately 15 to 18 percent of coal combustion residuals stored in wet surface impoundment are recycled, as compared to 22 to 27 percent of these residuals when subjected to dry handling. If the wet

‐ stored residuals from 2009 through 2011 had instead been recycling at the same rate as dry residuals, annual recycled materials would have increased by 1.6 million tons.63 Using a dollars per t on value of $99

— which includes social benefits and the cost of avoided disposal

— the annual benefit of this additional recycling would be $154 million. 64

56 Benefit

‐ Cost Analysis, p.2

‐ 5.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 184 57 Benefit

‐ Cost Analysis, p.2

‐ 13.

58 Benefit

‐ Cost Analysis, p.3

‐ 1.

59 Environmental Assessment, p. 3

‐ 1.

60 Benefit

‐ Cost Analysis, p.3

‐ 2.

61 Environmental Assessment, p. 6

‐ 48.

62 78 Fed. Reg. at 34,477.

63 Troy Sanders, Environmental Integrity Project, “Coal Combustion Waste Recycling Analysis,” September 17, 2013.

64 See Frank Ackerman and Elizabeth A. Stanton comments on Docket ID EPA

‐ HQ

‐ RCRA

‐ 2009

‐ 6040 on behalf of Earthjustice.
Comment Response:
EPA agrees with the commenter that the proposed rule analysis did not sufficiently address some benefit categories. To address issues raised by public commenters (including issues raised in this comment), EPA expanded the benefit

- cost analysis of the final rule to include the following benefit categories:

Reduced costs to processing drinking water: EPA conducted a screening

- level analysis to evaluate the potential reduction in drinking water treatment needs and determined that these benefits are unlikely to be significant (see Section 2.4 of the BCA document). Base d on this evaluation, EPA did not estimate changes in drinking water treatment costs but instead discussed potential benefits to drinking water utilities qualitatively.

Eliminated attractive nuisances: EPA acknowledges that changes in CCR handling may

con tribute to reducing wildlife exposure to pollutants at surface impoundments. EPA revised the BCA for the final rule to discuss this benefit category qualitatively (see Chapter 2), but was unable to quantify or monetize those benefits due to data limitation s.
Reduced health effects from limiting exposure to pollutants in drinking water : EPA conducted a screening

- level analysis of the potential for reduced health impacts from exposure to pollutants in drinking water. As detailed in the BCA for the final rule( see Section 2.1), since few drinking water intakes are affected by steam electric power plant discharges at levels that exceed safe drinking water levels, and since drinking water supplies must already be treated for pollutants that pose human health risks , EPA determined that this benefit category is unlikely to be significant.
Reduction of bromide pollution : EPA agrees that bromide is a potential issue for drinking water treatment plants. For the final rule, EPA expanded discussion of the benefits of redu cing bromideEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 185 pollution from the steam electric industry in drinking water sources (see BCA Section 2.4). See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 66.

Additional recycling of coal combustion residuals: EPA revised its analysis of this benefit category to estimate avoided disposal costs to steam electric power plants and avoided life cycle costs of virgin materials, following the same approach the Agency had used to estimate the benefits of the final CCR rule. See Chapter 10 of the fina l BCA document for details.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 15 External Review Flag: Engineering, Envr Assess External Review Incorpo rated into Response: No
Comment Excerpt:
Finally, there is no discussion whatsoever of several benefits of the steam electric ELGs.
Value of land for impoundments for redevelopment: The reduction in wastewater storage should result in less land used to b uild new impoundments, and more land available for redevelopment. This land has a value, either to the power plant itself for multiple potential purposes, or for sale to another prospective user. EPA neither discusses nor monetizes this benefit.

Reduced ai r emissions from impoundments’ parasitic load: EPA’s calculation of reduced air emissions appears to omit several sources of reductions. Surface impoundments require electricity to operate (a type of so

‐ called “parasitic load”). Fewer impoundments would re sult in air emission benefits from reduced parasitic load. These reduced air emissions are neither discussed nor monetized by EPA.

Reduced air emissions from true dry handling of ash: Similarly, the costs the EPA associates with bottom

‐ ash handling are no t based on true dry handling (as called for by the proposed ELGs), but rather on wet handling with zero discharge. 65 True dry handling would greatly improve total unit efficiency and thereby producing more energy with less air emissions. These benefits a re neither discussed nor monetized by EPA.
Avoided costs of BPJ determinations: Options 3a and 3b (for plants with less than 2,000 MW wet

‐ scrubbed capacity) would leave effluent limitations for FGD wastewater to be set on a case

‐ by

‐ case basis by permitting authorities. 66 This is not only inconsistent with EPA’s mandate under the Clean Water Act to set effluent limitations, but it also creates additional costs for permitting authorities, permitees, and interested third parties to develop, implement, and some times litigate BAT limitations for individual plants instead of having those limitations established by a national rule. The other options proposed by EPA avoid those costs, but EPA did not describe, let alone attempt to quantify or monetize, these benefit s.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 186 Avoided costs of TMDLs: EPA estimates that 78 power plants discharge a pollutant into a water body that is listed under the Clean Water Act as “impaired” for that pollutant under Section 303(d) of the Clean Water Act. 67 Pursuant to that section of the Act, states are required to established total maximum daily loads (“TMDLs”) in those waters for pollutants that are contributing to water quality impairments. 68 EPA last published a comprehensive study of the costs of developing and implementing TMDLs in 2001. 69 According to that study, the average TMDL costs $52,000 in administrative costs to develop, 70 and the study estimates that, nationwide, a total of 36,000 TMDLs are needed that will cost between $900 million and $3.2 billion per year to implement

. 71 With respect to the 78 power plants governed by the ELG rule that are contributing to water quality impairments, EPA found that both Options 4 and 5 would eliminate close to 100% of the pollution that those plants are contributing to those impairments, whereas other options proposed in the rule would reduce that pollution by lesser amounts. 72 Thus, the ELG rule would produce benefits by avoiding some or all of the costs of the TMDLs needed for the impaired water bodies into which those 78 power plants discharge. These benefits were neither discussed nor monetized by EPA.

[...]
Avoided costs of litigation: EPA also failed to quantify and monetize benefits from avoided litigation and related costs associated with illegal discharges, and ground and surface water pollution. Litigation costs can be substantial. There has been a wave of recent lawsuits filed against utilities for ground and surface water pollution in recent years, many of which have or will impose damages, penalties, monitoring and reporting r equirements, corrective action to clean up ground and/or surface waters, installation of liner and leachate collection systems, replacement of drinking water, and/or closure.

65 Incremental Costs and Pollutant Removals at 8

‐ 1.

66 78 Fed. Reg. at 34,458, Table VIII

‐ 1.

67 Environmental Assessment at 6

‐ 36 to 6

‐ 37.

68 33 U.S.C. § 1313(d)(1)(C).

69 EPA, Office of Water, “The National Costs of the Total Maximum Daily Load Program (Draft Report)” (2001), available at http://nepis.epa.gov/Exe/ZyNET.exe/901K0800.TXT.

70 Id. at 18.

71 Id. at i

‐ ii.

72 Environmental Assessment at 6

‐ 37.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 187 EPA agrees that the list of avoided costs and environmental effects presented by the commenter are po tentially applicable benefit categories. The Agency used the best methods and available data to identify, quantify, and wherever possible monetize, the benefits of the rule. The BCA for the final rule describes the wide range of benefits EPA expects to res ult from the ELGs, including the benefits highlighted by the commenters. Many of these benefits are unquantifiable; they are discussed qualitatively in Chapter 2 of the BCA. EPA notes that the analysis of benefits fulfills the Agency’s requirements under E xecutive Order 12866 and supports informed policy decision, but is not a statutory factor for determining effluent limitations and standards.
Regarding the role of cost

- benefit analysis in EPA’s decisions on the final steam electric ELGs, see response to D CN EPA

- HQ

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).
Regarding the avoided burden of BPJ determinations, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1, Excerpt Number 218 (in comment code 28.b).
Regarding the avoided cost of developing and implementing TMDLs, EPA recognizes that, to the extent that steam electric power generating plants discharges contribute to waterbody impairments, reducing the steam electric power plant discharges of pollutants of concern could reduce the need to deve lop TMDLs to address these impairments. EPA expects such benefits to be marginal. There is considerable uncertainty involved in estimating the benefits attributable to the ELGs from avoiding TMDLs, however, because steam electric power plants are often not the only cause of impairment within a watershed, and reducing their discharges may not obviate the need for a TMDL.
Regarding the avoided cost of litigation, generally, EPA agrees with the commenter that litigation costs associated with groundwater and su rface water contamination, and the benefits of avoiding these costs, may be substantial. EPA included avoided cleanup costs and transactional costs of litigation in its avoided impoundment failure benefits analysis (see Chapter 6 in BCA) for cases that may result in surface water contamination. Regarding litigation costs associated with groundwater contamination specifically, in December 2014, EPA promulgated the CCR rule, which specifically addresses risks to groundwater quality from leaking impoundments. The CCR rule is included in the baseline for the ELG analysis, and as such, benefits derived from the CCR rule implementation have been accounted for and are not attributable to the final ELG.
Regarding reduced air emissions from impoundments’ parasitic lo ad, EPA notes that the reduced air emissions from impoundments’ parasitic load are accounted for in EPA’s benefit analysis. Specifically, EPA netted out electricity savings associated with changes in impoundment operations when calculating changes in auxil iary power for the air

- related benefits. This analysis is discussed in Section 12 of the TDD.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 17Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 188 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Methodological and ethical issues with monetizing benefits
In the monetization of the benefits from the proposed ELGs EPA employs several controvers ial valuation techniques, discussed below: restricting willingness

‐ to

‐ pay to local impacts; the use of diverging state income in valuing a statistical life; and including lower educational expenses as a value to society. Variations on these tools are commo nly used in EPA benefit

‐ cost analyses, but are subject to well

‐ known critiques for undervaluing ecosystems, and human health and well

‐ being. 91

91 Ackerman, F and L Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing (New Yo rk: New Press, 2004).
Comment Response:
EPA disagrees that it has employed monetization approaches that raise methodological and ethical issues, but acknowledges shortcomings in the description that lead to the commenter’s concerns about methodologies em ployed in the analysis of benefits of the steam electric ELGs. For complete responses to more specific concerns, see responses to comments EPA

- HQ

OW

- 2009

- 0819

- 4686

- A1 excerpt 43 (regarding the use of local willingness

- to

- pay for water quality improvements ) and EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 excerpt 44 (regarding the use of income in adjusting the value of a statistical life and the cost of education as a component of IQ valuation).
EPA agrees with the commenter that some of the methodologies may result in und erestimates of benefits to ecosystems and human health and well

- being, but notes that the final rule analysis, as detailed in the BCA, reflects the up

- to

- date methods available for benefits analysis and valuation and appropriately notes the associated unce rtainties.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
I.EPA failed to monetize health benefits arising from cleaner drinking water as a result of the ELGs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 189 EPA did not monetize health benefits arising from the removal of power plant pollution from source waters for drinking water. 9 EPA’s rationale for not including these important benefits in its analysis is that “public drinking water supplies are already treated for pollutants that pose human health risks.” 10 EPA’s rationale is flawed for several reasons. First, not all MCLs are set at a level that eliminates the risk of adverse health effects. 11 Second, power plants discharge some pollutants that pose health risks, but are not currently regulated in drinking water. 12 Third, some water systems do exceed MCLs. 13 Finally, monitorin g for dangerous pollution in drinking water can be infrequent (i.e. every 9 years). 14 Thus, EPA should account for benefits arising from the removal of power plant pollution from source waters in this rulemaking.

9 U.S. Envtl. Prot. Agency, Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EPA

821

- R

- 13

- 004) 2

- 4 to 2

- 5 (Apr. 2013) [hereinafter BCA].

10 Id. at 2

- 4. At the same time, EPA acknowledges t hat “treatment may not remove all contaminants from the drinking water supplies and there may be some incremental health

- related benefits associated with reduced concentrations arising from the proposed ELGs.” Id. at 2

- 4 to 2

- 5.

11 U.S. Envtl. Prot. Agenc y, Drinking Water Standards & Health Effects (EPA

- 816

- F

- 04

- 037) (June 2004) [hereinafter Drinking Water Standards], available at http://water.epa. gov/lawsregs/guidance/sdwa/upload/2009_08_28_sdwa_fs_30ann_standards_we b.pdf.

12 Power plants discharge 158,000 pounds of vanadium annually. EA at 3

- 13 tbl. 3

- 2. Although there is no MCL for vanadium at this time, this pollutant is on the Contaminant Cand idate List. U.S. Envtl. Prot. Agency, Contaminant Candidate List 3

– CCL, http://water.epa.gov/scitech/drinkingwater/dws/ccl/ccl3.cfm#chemical (last visited Sept. 15, 2013).

13 See, e.g. , U.S. Envtl. Prot. Agency, Office of Water, Fiscal Year 2011 Drinking Water and Ground Water Statistics (EPA

- 816

- R

- 13

- 003) (Mar. 2013), available at http://water.epa.gov/scitech/datait/databases/drink/sdwisfed/upload/epa816r13003.pdf.

14 40 C.F.R. § 141.23(c)(4).
Comment Response:
EPA agrees with the commenter that revised ELGs for the steam electric industry are likely to provide be nefits arising from cleaner drinking water supplies and understands the commenter’s concerns that the analysis of the proposed rule did not quantitatively analyze such benefits.
For the final rule, EPA conducted a screening

- level analysis to determine the potential magnitude of these benefits. This analysis, which is described in Section 2.1 of the BCA, suggests that theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 190 benefits are unlikely to be substantial based on the number of drinking water intakes located on reaches where estimated concentrations ex ceed maximum contaminant levels (MCLs) in the baseline. Based on this assessment, EPA did not monetize the benefits in this category, but instead provided a more detailed qualitative discussion of health benefits arising from cleaner drinking water sources

.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 Comment Excerpt Number: 7 External Review Flag: Envr Assess External Review Incorporated into Response: No
Comment Excerpt:
EPA should have accounted for benefits arising from reduced exposure to these pollutants in drinking water as a result of the ELGs.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 excerpt 2.

Commenter Name: Thomas Cmar Commenter A ffiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 Comment Excerpt Number: 8 External Review Flag: Envr Assess External Review Incorporated into Response: No
Comment Excerpt:
C.EPA acknowledges violations of MCLs at some water treatment systems.
EPA’s rationale for not quantifying benefits arising from cleaner drinking water as a result of the ELGs is also flawed because it assumes that all water treatment systems are in compliance with all MCLs at all times. Yet this is not the case. 46 In its most recent drinking water report, EPA notes that the overall national average for compliance with health

- based drinking water standards is approximately 93%, with some regions as low as 84%. 47 In 2011, there were 8,522 v iolations of MCLs at 4,010 community water systems alone. 48 The population potentially impacted by these violations was nearly 15 million people. 49 That same year, EPA reports over 76,000 monitoring and reporting violations at 17,519 systems, affecting over 60 million people. 50Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 191 EPA’s report also identifies MCL violations of DBP standards. 51 For all water treatment systems subject to the rule, there were 2,599 MCL violations of the Stage 1 DBP rule at 1,026 systems serving over 3 million people. 52 In fact, in the supporting documents for this rulemaking, EPA states that drinking water utilities have “not[ed] that . . . bromide concentrations have made it increasingly difficult for them to meet Safe Drinking Water Act requirements for TTHMs.” 53 A rec ent report by several drinking water utilities in Pittsburgh, PA notes that “[a] number of US drinking water utilities have struggled to comply” with EPA’s Stage 1 DBP rule and “even more utilities anticipate difficulty meeting the more stringent requireme nts” of the Stage 2 DBP rule that recently took effect. 54 Thus, for the purposes of the analysis for the ELGs, EPA should not assume that all systems are in compliance with all MCLs at all times.
D.In some cases, water treatment system monitoring for pol lutants discharged from power plants is infrequent.
EPA’s assumption also ignores the potential for violations of drinking water standards to remain undetected under infrequent Federal and State monitoring requirements. For example, federal regulations req uire public drinking water systems to monitor for inorganic chemicals (including antimony, arsenic, barium, beryllium, cadmium, chromium, cyanide, mercury, nickel, selenium, and thallium) once during an initial period of one year for surface water systems or three years for groundwater systems. 55 However, States can reduce the monitoring requirement to only once every nine years if three consecutive samples from initial monitoring produce results below the applicable MCL. 56 Infrequent monitoring over se veral years is not sufficient to identify whether a drinking water system is consistently complying with MCLs. Because many systems may monitor infrequently for pollutants in power plant discharges, EPA should not assume that all systems are in compliance at all times for the purposes of determining whether the ELGs will result in health benefits from cleaner source waters.

46 U.S. Envtl. Prot. Agency, Office of Water, Fiscal Year 2011 Drinking Water and Ground Water Statistics (EPA

- 816

- R

- 13

- 003) (Mar . 2013), available at http://water.epa.gov/scitech/datait/databases/drink/sdwisfed/upload/epa816r13003.pdf.

47 Id. at 17.

48 Id. at 18

- 19. A “community water system” is “a public water system that supplies water to the same population year

- round.” Id. at 5.

49 Id. at 19.

50 Id. at 18

- 19.

51 Id. at 25, 28.

52 Id. at 25.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 192 53 EA at 3

- 11.

54 Stanley States et al., Marcellus Shale Drilling and Brominate d THMs in Pittsburgh, PA, Drinking Water, 105 Journal American Water Works Association E432, E432, E448 (Aug. 2013) (noting that Marcellus Shale drilling activities and coal plants account for increases in bromide concentrations in Allegheny River Systems)

.
55 40 C.F.R. § 141.23(c)(1).

56 40 C.F.R. § 141.23(c)(4). In addition, reduced monitoring for cyanide requires the State to determine that the system is not vulnerable due to lack of any industrial source of cyanide. 40 C.F.R. § 141.23(c)(2).

Comment R esponse:
EPA acknowledges the commenter’s concerns that drinking water sources may not be in compliance with MCLs at all times, and thanks the commenter for providing data on occurrences of exceedances.

EPA notes, however, that its Guidelines for Preparing Economic Analyses (U.S. EPA, 2014) describe how to treat compliance with existing regulations in the baseline for analyzing a rule. “As a general rule, when preparing analyses of regulations analysts should develop baseline and policy scenarios that assume full compliance with existing and newly enacted (but not yet implemented) regulations. Assuming full compliance with existing regulations enables the analysis to focus on the incremental economic effects of the new rule or policy without double counting benefits and costs captured by analyses performed for other rules.” (U.S. EPA, 2014, p. 5

- 9).
For the final rule, EPA conducted a screening

- level analysis to determine the potential magnitude of benefits to public drinking water systems. This analysis, which is described in Section 2.1 of the BCA, looked at the number of drinking water intakes located on reaches where estimated concentrations exceed maximum contaminant levels (MCLs) in the baseline and suggested that expected benefits to public drinking water systems would be small. Based on this assessment, EPA did not monetize the benefits in this category, but instead provided a more detailed qualitative discussion of health benefits arising from cleaner drinking water sources, including

reco gnizing that monitoring of drinking water systems is imperfect. Also, based on this analysis, EPA determined that an alternative baseline assuming less than full compliance with SDWA regulations would not result in an important sensitivity analysis.

Comm enter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 Comment Excerpt Number: 9Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 193 External Review Flag: Envr Assess External Review Incorporated into Response: No
Comment Excerpt:

II.EP A did not quantify or monetize benefits from reduced drinking water treatment costs.
EPA also failed to monetize benefits from reduced drinking water treatment costs arising from cleaner source waters as a result of the ELGs. EPA states that
[t]he propose d ELGs are expected to reduce costs of drinking water treatment (e.g., filtration and chemical treatment) by reducing metal concentrations and eutrophication in source waters. Eutrophication is one of the main causes of taste and odor impairment in drink ing water, which has a major negative impact on public perceptions of drinking water safety. Additional treatment to address foul tastes and odors can significantly increase the cost of public water supply. Further, public drinking water sources do not alw ays effectively remove bromides (a steam electric pollutant) from raw surface waters. Elevated bromide concentrations in source waters result in increased trihalomethanes (THMs) in drinking water. Drinking water utilities downstream of bromide sources are increasingly finding it difficult to meet drinking water standards for THMs. If water treatment is not sufficient, an alternate water source needs to be substituted (if available). Longterm solutions might require the development of new raw water supplies, which would involve costs for the acquisition of land (if available), regulatory review and permitting, development of infrastructure (dams, pumps, pipes), and watershed protection. 57

EPA did not quantify or monetize these important benefits because of “d ata limitations.” 58 Yet the EPA Office of Ground Water and Drinking Water routinely estimates incremental costs associated with drinking water treatment during the SDWA regulatory process. 59 In addition, the Office of Water has quantified and monetized the benefits from reduced drinking water treatment costs as a result of improved surface water quality from an ELG in the past. 60 EPA should do the same here.
In 2008, EPA estimated avoided costs of drinking water treatment from reduced sediment loading s from construction sites as a result of the proposed ELG. 61 EPA estimated “[s]ediment concentrations and drinking water influent volumes . . . for each surface drinking water intake in the United States.” 62 “EPA [then] calculated the costs of treatmen t chemicals and sludge disposal by surface drinking water intake . . .” and compared the baseline and post

- compliance costs to estimate the cost savings arising from the requirements of the ELG. 63 EPA also conducted a sensitivity analysis to address unce rtainty. 64 EPA has provided no reason why they cannot do the same analysis here.
Furthermore, during the regulatory processes to set MCLs, the Office of Ground Water and Drinking Water estimates the incremental capital, operating and maintenance, and was te disposal costs associated with drinking water treatment for the purposes of compliance with a potential MCL. 65 For example, in the rulemaking to revise the arsenic MCL, EPA evaluated the following costs for various treatment systems to meet the MCL of 0.010 mg/l where source waters were 0.011 mg/l and 0.050 mg/l: capital, operating and maintenance, waste disposal,Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 194 waste disposal operating and maintenance, and annual. 66 In other words, EPA is able to estimate incremental operating and maintenance cost s to clean up water contaminated at various levels. Thus, monetizing benefits arising from reductions in source waters pollution as a result of the proposed Steam Electric ELGs is possible.
As EPA notes in the Benefit and Cost Analysis for the Proposed Eff luent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, these costs can be significant. 67 Increased pollution in source waters means increased costs associated with additional chemicals, more frequent rep lacement of filters and adsorptive media, waste disposal, and additional training, 68 all of which EPA must quantify and monetize in order to better represent the benefits associated with the ELGs. “Bromide is particularly difficult and expensive to remove and its associated brominated DBPs are among the most harmful.” 69 In some cases, systems must switch disinfectants, “which carries increased costs as well as a need for additional training of operators. For example, the switch to chloramine requires ad dition of phosphate to control lead releases that can be caused by the transition . . . ." 70 Water treatment systems may also be forced to find an alternative drinking water supply, which can carry substantial costs. 71 One system in California estimated th ese additional costs at approximately $20 to $60 per square

acre

- foot, resulting in increased costs of $30 to $90 million dollars each year. 72

In conclusion, Steam Electric ELGs that eliminate or significantly reduce discharges of toxic pollution from powe r plants will have a significant and positive impact on the quality of drinking water and the cost of treatment. Finalizing Option 5 provides EPA with a unique opportunity to advance the goals of both the Clean Water Act and SDWA and ensure the public has access to safe drinking water. Thus, EPA should quantify and monetize these important benefits.

57 BCA at 2

- 9.

58 Id. at 2

- 10.

59 U.S. Envtl. Prot. Agency, Arsenic in Drinking Water Rule Economic Analysis (EPA

- 815

- R

00

- 0026) (Dec. 2000).

60 U.S. Envtl. Prot. Agency, Environmental Impact and Benefits Assessment for Proposed Effluent Guidelines and Standards for the Construction and Development Category (EPA

- 821

- R

08

- 009) (Nov. 2008).

61 Id. at 9

- 1 to 9

- 14.

62 Id. at 9

- 2.

63 Id.

64 Id.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 195 65 U.S. Envtl. Prot. Agency, Arsenic in Drinking Water Rule Economic Analysis (EPA

- 815

- R

00

- 0026) (Dec. 2000).

66 Id. at Exhibit 6

- 2a and 6

- 2b.

67 BCA at 2

- 9.

68 See, e.g. , EA at 3

- 32; Memo from Lydia Lambert & Kristi Bubb, ERG, to Bill Swietlik, EPA, R e Drinking Water Treatment Technologies that Can Reduce Metal and Selenium Concentrations Associated with Discharges from Steam Electric Power Plants (DCN SE02154) (Sept. 2, 2010).

69 Wei

- Hsiang Chen et al., Delta Drinking Water Quality and Treatment Cos ts Technical Appendix H iv (Sept. 2008), available at http://www.ppic.org/content/pubs/other/708EHR_appendixH.pdf.

70 Jeanne M. VanBriesen, Potential Drinking Water Effects of Br omide Discharges from Coal

Fired Electric Power Plants (2013).

71 Wei

- Hsiang Chen et al., Delta Drinking Water Quality and Treatment Costs Technical Appendix H iii (Sept. 2008), available at http://www.ppic.org/content/pubs/other/708EHR_appendixH.pdf.

72 Id. at iv.
Comment Response:
EPA agrees with the commenter that the final rule will improve water quality in recei ving reaches, including reaches used as drinking water sources. EPA did not quantify drinking water benefits of the ELGs revisions because public drinking water supplies are already treated for most steam electric pollutants that pose human health risks. Additionally, while EPA recognizes that it is possible to estimate changes in treatment costs due to improved water quality, and that the Agency has calculated these costs for several rules, the discussion in Chapter 2 addresses why the Agency did not quan tify the changes in treatment costs for the final ELGs.
Specifically, EPA’s screening

- level analysis (see Section 2.1 in BCA) identified few reaches with drinking water intakes where the estimated pollutant concentrations exceed MCLs in the baseline, which suggests that benefits associated with improvements in source water quality would be relatively small. During the first step in the assessment, EPA determined that water utilities may see reduced costs for the removal of arsenic, cadmium, copper, lead, me rcury, selenium, thallium, nitrogen, and total suspended solids. During the second step in the assessment, EPA determined that few drinking water systems are currently drawing water at levels that exceed one or more MCLs and would improve under the policy options. And similarly, few reaches with elevated total nitrogen levels will see those levels decline significantly under the regulatory options to result in substantive cost savings. When EPA looked at the potential for reduced drinking water treatment co sts arising from reduced suspended solidsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 196 concentrations using the same methodology it previously used for the Construction and Development ELG rule analysis, the Agency found de minimis changes in treatment costs due to the very few intakes located downst ream from steam electric power plant discharges.
For the final rule, EPA revised its analysis to include additional drinking water treatment literature (including studies provided by the commenter), and to provide a more detailed discussion of other steam electric pollutants, such as bromide. The Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) summarizes the relationships between bromide le vels and drinking water treatment practices, and health effects of disinfection byproducts. The BCA describes why EPA did not quantify or monetize the particular benefits of bromide reductions. Specifically, EPA’s final rule does not set effluent limits fo r bromide for the steam electric industry, based on the performance of the best available technology (BAT) for FGD wastewater treatment (chemical precipitation and biological treatment). Because the final ELG does not set technology

- based limits on bromide discharge, EPA did not estimate the bromide reduction benefits of the rule. EPA notes, however, that the rule allows permit writers to set bromide discharge limits on a plant

- by

- plant basis based on site

- specific considerations that include the potential to affect public drinking water sources. Benefits of any plant

- specific limits in terms of avoided treatment costs or human health risk would need to be determined based on more detailed information about the receiving waters and drinking water system.

Commenter Name: J. Duggan Commenter Affiliation: Environmental Integrity Project (EIP) et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 5488

- A2 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Resp onse: No
Comment Excerpt:
The comments we submitted on September 20, 2013 identified EPA’s failure to quantify and monetize benefits from avoided litigation and related costs associated with illegal discharges and ground and surface water pollution. 1 L itigation costs can be substantial. For example, Constellation Energy Group paid $54 million to settle a lawsuit brought by Maryland residents for groundwater contamination at a coal ash disposal site. 2 Landowners in Montana settled a coal ash contaminat ion lawsuit for $25 million. 3 There has been a wave of recent lawsuits filed against utilities for ground and surface water pollution in recent years, many of which have, or will, impose damages, penalties, monitoring and reporting requirements, correcti ve action to clean up ground and/or surface waters, installation of liner and leachate collection systems, replacement of drinking water, and/or closure. Exhibit No. 32 of our comments 4 is a survey of just a few of recent proposed and final consent orders and other agreements. All of the requirements imposed by these agreements carry significant costs. Yet EPA has failed to account for them in its analysis.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 197 1 See Comments submitted by Earthjustice et al. to Water Docket, U.S. Envtl. Prot. Agency, on proposed rule to revise Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (Sept. 20, 2013) (Document ID EPA

- HQ

- OW

- 2009

- 0819

- 4684).
2 S. Schultz, Constellation Reaches $54 Million Settlement of Fly A sh Lawsuit,” Baltimore Business Journal (Dec. 31, 2008).
3 N. Goldman, Federal Regulation Needed for Coal Fly Ash, The Missoulian (2010).

4 See Document IDs EPA

- HQ

- OW

- 2009

- 0819

- 4724,

- 4725,

- 4726.
Comment Response:
EPA agrees with the commenter that liti gation costs associated with groundwater and surface water contamination may be substantial (but notes that settlement amounts do not constitute costs to society but rather transfers). To the extent that such costs result from accidental releases that woul d be prevented or reduced by actions the plants may take to meet their permitted limits (e.g., convert to dry handling of ash), avoiding the costs are a relevant benefit of the rule. In December 2014, EPA promulgated the CCR rule, which specifically addres ses risks to groundwater quality from leaking impoundments. The CCR rule establishes technical requirements for CCR surface impoundments, including composite liners, groundwater monitoring, corrective action, and closure/post closure care, among others. Th e CCR rule is included in the baseline for the ELG analysis, and as such, benefits derived from the CCR rule implementation have already been accounted for (i.e., they are not attributable to the final ELG). Including them in the final ELG analysis would b e double

- counting.
EPA included avoided cleanup costs and transactional costs of litigation in its avoided impoundment failure benefits analysis (see Chapter 6 in the BCA). EPA agrees that these costs, and the benefits of avoiding these costs, may be subst antial as reflected by the benefit estimates presented in the BCA.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 198 29.b. Benefits

– Benefit analyses assumptions

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 5 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA FAILS TO FOLLOW OMB’S CIRCULAR A

- 4 ON THE PRESENTATION OF COST/BENEFIT ANALYSES

OMB Circular A

- 47 (relying in turn on Circular A

- 94) states that “a real discount rate of 7 percent should be used as a base

- case for regulatory analysis,” as this is the average before

- tax rate of return to private capital investment. However, Circular A

- 4 acknowledges that in some cases, the displacement of consumption is more relevant, in which case a real discount rate of 3 percent should be used. Thus it states: “For regulatory analysis, you should provide estimates of net benefits using both 3 percent and 7 percent.” Note that Circular A

- 4 does not say that a discount rate should be chosen based on the impacts; instead it says quite clearly that estimates should be made using both rates.
In the economics of climate change academic literature, there are disputes over the proper discount rat e, with some economists arguing that very low rates should be used in order to place future generations on a nearly equal footing with the present generation in policy analysis. Circular A

- 4 and the White House’s primer on Circular A

- 4, 8 explicitly cited t he work of Martin Weitzman, one of the leading scholars in the field on this issue, who argues for a low discount rate in climate change analysis. 9 Nonetheless, after this discussion the 2011 primer still concluded:
If the regulatory action will have impor tant intergenerational benefits or costs, the agency might consider a sensitivity analysis using a lower but positive discount rate, ranging from 1 to 3 percent, in addition to calculating net benefits using discount rates of 3 percent and 7 percent. [“Reg ulatory Impact Analysis: A Primer,” p. 12, bold added.]
But instead of following OMB’s guidance and calculating the social cost of carbon at a 7 percent discount rate, EPA refuses and only uses a 5 percent discount rate. EPA states:

Because SCC values are not available for the 7 percent discount rate, EPA used the SCC based on a 5 percent discount rate to estimate values presented for the 7 percent discount rate. EPA uses 5 percent to discount CO2

- related benefits and 7 percent to discount benefits from cha nges in NOX and SO2 emissions. 10Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 199 This is an arbitrary and capricious deviation from OMB’s guidance on the use of discount rates. EPA could have run the social cost of carbon models at a 7 percent discount rate, but it failed to do so.
It certainly is possible to run social costs of carbon models at a 7 percent discount rate. Recently, the Heritage Foundation ran the DICE model, 11 one of the three models that the administration used to estimate the social cost of carbon. Here are the results from the DI CE mode at a 2.5 percent, 3 percent, 5 percent, and 7 percent discount rate, according to the Heritage Foundation analysis.

It is easy to see why EPA would be reticent to include the 7 percent discount rate as required by OMB

— the SCC at the 7 percent discount rate is substantially lower, at roughly only 50 percent of the 5 percent discount rate. This demonstrates why EPA’s exclusion of the SCC at the 7 percent discount rate is arbitrary and capricious. Furthermore, although the Heritage Foundation only tested the effect of including a 7 percent discount rate using the DICE model, the results would presumably be even more striking had they done the same procedure with the FUND model. This is because the DICE projects immediate (and rising) net damages fr om global warming. In contrast, the FUND model projects decades of global benefits from global warming, which only switches over to net damages after the year 2050. 12 Therefore, applying a 7 percent discount rate (rather than the highest rate of 5 percent as the Working Group chose to do) to the stream of benefits and damages in the FUND model, would yield a present

- value SCC very close to $0/ton, if not negative.

7 OMB Circular A

- 4 available at: http://www.whitehouse.gov/omb/circulars_a004_a

- 4.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 200 8 “Regulatory Impact Analysis: A Primer,” available at: http://www.w hitehouse.gov/sites/default/files/omb/inforeg/regpol/circular

- a

4_regulatory

- impact

- analysis

- a

- primer.pdf.

9 See: http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/circular

- a

- 4_regulatory

impact

- analysis

- a

- primer.pdf.

10 Environmental Protection Agency, Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Sourc e Category , 78 Fed. Reg. 34432, 34517, June 7, 2013.

11 Kevin Dayaratna & David Kreutzer, Re: Social Cost of Carbon
, http://www.scribd.com/doc/168715712/Comment

- to

- EPA

- on

- the

- Social

- Cost

- of

Carbon

- Sept

- 16

- 2013.

12 See Figure 1B (page 10) from the 2010 report of the Working Group on Social Cost of Carb on.
Comment Response:
EPA disagrees with the commenter’s assertion that the Agency’s CO 2 valuation approach arbitrarily and capriciously deviates from OMB regulatory impact analysis guidance in Circular A

- 4. EPA valued CO 2 emissions reductions using the United States Government Interagency Working Group on Social Cost of Carbon’s (“Working Group”) social cost of carbon (SCC) estimates (IWGSCC, 2013) and recommended discount rates. This is consistent with the approach EPA used in other analyses that value reductions in CO 2 emissions. GAO addressed the apparent inconsistencies between OMB Circular A

- 4 and the Working Group’s 2013 guidance directly in its review of regulatory impact analyses and concluded that the “discount rates [2.5, 3, and 5 percent] are consistent with the latitude provided in Circular A

- 4 and span a plausible range to account for disagreement in the literature on the appropriate rate to use in this context and various uncertainties.” (GAO, 2014; p. 25). Using a SCC estimate based on 7 pe rcent discount rate, as the commenter suggests would be feasible , but is inconsistent with explicit recommendations of the Working Group’s panel of economic experts and federal agencies.

For the final rule, EPA used the full suite of SCC estimates developed by IWGSCC to estimate the value of CO 2 emission reductions (2.5, 3, and 5 percent). EPA acknowledges that using SCC estimates based on these discount rates differs from estimates of other benefits in the BCA (which EPA valued at 3 percent and 7 p ercent discount rates). As recognized by OMB (cited in GAO, 2014; p.25), however, the difference in discount rates is “unavoidable due to the intergenerational nature of the benefits associated with reducing carbon dioxide emissions.”

EPA maintains that it s approach to valuing CO 2 emissions reductions for the final rule, as presented in Chapter 7 of the BCA for the final rule, is not arbitrary and capricious but rather reflects best practices and follows recommendation of IWGSCC and GAO.

For the role of cos t

- benefit in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 201 References
Government Accounting Office. 2014. “Environmental Regulation: EPA Should Improve Adherence to Guidance for Selected Elements of Regulatory Impact Analyses” http://www.gao.gov/assets/670/664872.pdf

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Contr ol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 97 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In the background documents for the proposed rule, EPA calculates the monetized b enefits and assesses associated regulatory impacts for the various proposed regulatory options discussed above. EPA’s benefits calculation is mainly based on "avoided" adverse effects on human health and the environment related to water and air quality, a nd on market and productivity benefits, including avoided costs related to impoundment guidelines. In the Environmental Assessment prepared in support of the proposed rule, EPA also presented water quality evaluations that were not quantified as part of t he benefits evaluation, but were apparently used to justify the need for the proposed rule. As further detailed below and in UWAG Comments, EPA’s Benefit and Cost Analysis (EPA

- HQ

- OW

- 2009

- 0819

- 2238) and Regulatory Impact Analysis (EPA

- HQ

- OW

2009

- 0819

- 2239) , which build on other faulty EPA analyses such as the Environmental Assessment and Technical Development Document, are flawed.
Comment Response:

The comment characterizes the cost

- benefit and regulatory impact analyses as “flawed” and based on “faulty” analyses. EPA disagrees with this characterization.
As noted in responses to other comments (e.g., see DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 107), EPA acknowledges that it was not able to bring the same depth of analysis to all categories of ben efits because of imperfect understanding of the link between discharge reductions or other environmental effects of the ELGs and benefit categories, and how society values some of the benefits. Nonetheless, EPA determined that its methods provide the best possible estimates of benefits from the final rule, given challenges posed by limitations in data, modeling tools, and the available scientific literature. EPA’s benefit analysis for the final rule clearly highlights ecological and other benefits of improv ed ambient water quality in receiving reaches, benefits from avoided adverse health effects and from avoided costs of impoundment failures (see the BCA for details).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 202 EPA addressed the commenter’s concerns about the analyses described in the EA Report and T DD in separate answers (for example, see answers to comment EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number Numbers 14, 22, 37, etc.). EPA incorporated changes made in response to comments, where applicable, when analyzing the benefits of the final rule. For e xample, the final rule benefits analysis is based on EPA’s revised loading estimates, which were updated as a result of public comments. These changes, which are detailed in the rulemaking record for the final rule, result in loading estimates that are low er than those EPA calculated for the proposed rule.

For the role of cost

- benefit in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 107 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA Assumptions Ove restimate Benefits
Building upon the exaggerated power plant environmental impacts described by EPA, the Agency then employs assumptions resulting in flawed and systematic overestimation of benefits associated with the proposed rule. It is not clear from the fundamentally flawed benefits analysis that any of the proposed ELG regulatory options will provide a measurable benefit to human health or the environment.
As discussed above, EPA failed to sufficiently justify many of the assumptions used to estimate surface water quality and in turn the potential effects on human health and the environment. Also, in many cases, the assumptions underlying EPA’s benefits analysis fail to acknowledge previously identified uncertainties (as documented in other EPA repor ts). The use of uncertain assumptions with known limitations makes the benefit

- cost analysis an unreliable tool for rulemaking.

[...]
Finally, as discussed above, many of the analyses associated with the proposed rule are interconnected, which means flaws in one analysis are compounded by use in subsequent analyses. For example, the flawed cost

- effectiveness analyses discussed above feed into the various background support analyses, including the regulatory impacts assessment. This effect extends to EPA’s benefits calculations where overly conservative assumptions in primary analyses (i.e., surface water contaminant modeling) are propagat ed through the assessment andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 203 compounded in the final output (i.e., the benefit calculation). [In another example, EPA’s estimate of benefits attributable to reduced impoundment failure, which make up 37

- 58% of the total benefits attributed to the propose d ELG (for options 3 and 4 where air benefits estimates are provided), is likely overestimated as a result of compounded flaws on EPA’s unit cost and failure probabilities. Gradient Report at 35.] These compounded flaws throughout the interconnected anal ysis feeding into EPA’s benefits analysis manifest as benefits estimates that are over

- inflated and overstate the effectiveness of the proposed control options such that it is not clear that any of the proposed ELG regulatory options will provide a measura ble benefit to human health or the environment.
Comment Response:
This comment relays four general assessments of EPA’s cost benefit analyses, all of which EPA disagrees with: (1) that benefit environmental assessment and benefit estimation models are “f undamentally flawed,” (2) that benefit

- cost analyses do not sufficiently justify assumptions used in estimating surface water quality improvements and associated benefits, (3) that documentation does not acknowledge previously

- identified uncertainties, and (4), a concern that uncertainties in analyses “compound” when used in subsequent analyses.
EPA details reasons for disagreement with assertions about individual benefit analyses in its responses to other comments (e.g., for response to air

- related benefit s analyses, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 129; for comments about the impoundment analysis, see responses EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 190). Regarding outputs from the environmental assessment or engineering an alysis that are used as inputs for the benefits analyses, EPA addressed the commenter’s concerns in separate answers (for example, see answers to comment EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number Numbers 14, 22, 37, etc.). EPA incorporated changes made i n response to comments, where applicable, when analyzing the benefits of the final rule. For example, the final rule benefits analysis is based on EPA’s revised loading estimates, which incorporate revisions made to the engineering analysis and environment al assessment in response to comments, and additional data received or published since the proposed rule analysis. EPA also updated its estimates to account for the impacts of other federal rules on pollutant loads and plant characteristics. These changes, which are detailed in the rulemaking record for the final rule resulted in loading estimates that are lower than those EPA calculated for the proposed rule.
In documents supporting the final rule, EPA articulates methods, documents data sources, and discu sses underlying assumptions crucial to the scope of the analysis, including discussions and quantifications of the implications of uncertainty for benefit estimates. The BCA outlines the analytic framework uniting all analyses, demonstrates analytic steps used to link expected pollutant load reductions with changes in environmental endpoints and economic values (e.g., dose

- response functions, value of statistical life, etc.), and describes methods and results of its uncertainty and sensitivity analyses.

Not e that EPA determines ELGs based on factors specified in the Clean Water Act (including economic achievability), rather than strict comparison of benefits and costs. Nonetheless, as Executive Order 12866 acknowledges, the existence of limitations, assumpti ons, and/orEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 204 uncertainties does not make any given benefit

- cost analysis “an unreliable tool” as claimed by the commenter. That uncertainties in one stage of the analysis may propagate to secondary stages is unavoidable, but EPA maintains that its analyses of the final rule provide well

- supported information on the expected benefits of the ELGs.

Commenter Name: Cathy S. Woollums Commenter Affiliation: MidAmerican Energy Holdings Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4495

- A1 Comment Excerp t Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA's more detailed report on the benefits of the ELG proposal relied on census data and other studies that were conducted 10 or more ye ars ago, and had some questionable assumptions that are questionable, at best, and potentially inaccurate. For example:

 EPA assumed that a plant would generate approximately the same quantity of electricity in 2014 as it did from 2007 through 2009. However , recent data and announced plant shutdowns associated with compliance with the Mercury and Air Toxics Standards, depressed market conditions, and low natural gas prices point to flaws in this assumption. Electricity generation between 2007

- 2009 was, likew ise, depressed with reduced load corresponding with the national economic recession, during which utilities nationwide experienced reduced demand.
Comment Response:
In conducting benefit and other analyses for the ELGs, EPA used studies and datasets whi ch the Agency determined most accurately estimated, described, or could be used to model environmental and economic conditions. EPA updated some of these data for the final rule analysis to reflect more recent information not available at the time of the p roposed rule; see the BCA (Appendix A) for a description of updates and other changes since the proposed rule analysis.
Regarding the specific example the commenter provides of EPA’s use of EIA data, EPA acknowledges that historical trends reflected in EIA data may over

- or under

- estimate impacts of the ELGs if actual conditions differ materially from the trends. EPA updated the data to include more recent information from EIA for 2012, as well as used the most recent version of the Integrated Planning Mode l (IPM v5.13) which includes updated electricity demand projections, generating capacity, environmental regulations, etc. For details, see the RIA document for the final rule. EPA maintains that the data and methods used for both benefit and cost analyses are appropriate for their intended use.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 205 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 197 External Review Flag: No External Review Extern al Review Incorporated into Response: No
Comment Excerpt:
UWAG asked Gradient to review the methodologies and assumptions that EPA used to calculate baseline pollutant loadings, as well as the underlying models, toxicity, benchmarks and assumptions used to quantify the reduced risks ( i.e. , the benefits) under the different regulatory options. Gradient’s focus was to understand and evaluate the scientific validity of EPA’s methodology and uncertainty associated with specific assumptions. Gradient found t hat substantial portions of both the monetized and non

- monetized benefits asserted by EPA are overstated or not adequately detailed, calling into question whether the proposed rule is adequately supported.
Comment Response:
EPA disagrees with the comment er’s characterization of the results that “substantial portions” of the benefits are overstated or insufficiently documented to support the rule.
EPA acknowledges that some benefits may be over

- or under

- stated due to limitations and uncertainties of available data and environmental or economic models, and discusses these limitations as well as the direction of the uncertainty where known in the BCA. EPA determined that its approach to estimating benefits in the face of limitations has been rational an d provided reasoned support for policy decisions. For more on the role of cost

- benefit in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).
For more detailed responses to specific as pects of the benefit analysis, see response to related comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 207 in comment code 29.c for discussion of the human health benefit analyses related to mercury exposure). For more detailed response on EPA ’s estimate of baseline pollutant loadings, see DCN EPA

- HQ

- OW

2009

- 0819

- 4487

- A1, Excerpt Number 97.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 205Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 206 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Based on the assumptions and methodology EPA has used to calculate pollutant loads and benefits under the regulatory options, Gradient developed the following overall conclusions:
EPA has not sufficiently justified many of the assumptions used to estimate surface water quality and the potential effects on human health and the environment. In many cases, the assumptions fail to acknowledg e uncertainties that EPA has identified in previous reports. The use of uncertain assumptions with known limitations makes the benefit/cost analysis an unreliable tool for rule

- making.
Comment Response:
EPA disagrees with the commenter that it has not p rovided sufficient justification for assumptions used to estimate the benefits of the ELGs. See response to other comments addressing specific assumptions of the benefit analysis for details (e.g., DCN EPA

- HQ

- OW

2009

- 0819

- 4487

- A1, Excerpt Number 97).

Addit ionally, the existence of limitations, assumptions, and/or uncertainties does not make any given benefit

- cost analysis “an unreliable tool for rule

- making.” EPA maintains that its analyses of the final rule provide well

- supported information on the expecte d benefits of the ELGs. For the role of cost

- benefit in EPA’s decisions on the final rule, see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number Number 3 (in comment code 6.e).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 206 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Because many of the analyses used to calculate be nefits are interconnected, overly conservative assumptions in primary analyses ( i.e. , surface water contaminant modeling) will be propagated through the assessment. As a result, the uncertainty is compounded in the final output ( i.e. , the benefit calculat ion). This manifests as benefits estimates that are over

- inflated and overstate the effectiveness of the proposed control options.
Uncertainties associated with selected assumptions and the impact of alternative assumptions are not quantified. Given the large impact of some of the selected assumptions and its approach toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 207 the analysis, EPA should have explored a range of possible results in a sensitivity analysis. For example, considering reasonable parameter adjustments for the impoundment failure analys is would reduce the estimated benefits by nearly a factor of 2. Because Gradient’s analysis indicates that EPA made several assumptions that overestimate risk, it is likely that plausible benefits of the various options, or even the basic support for the need for additional regulation, could be significantly lower and would be insufficient to support particular regulatory options.
Overall, because of the profound uncertainty in the assessment, the failure to quantify that uncertainty, and the substantial p otential overestimation of benefits, it is not clear that any of the proposed ELG regulatory options will provide a measurable benefit to human health or the environment.
Comment Response:

For the role of cost

- benefit in EPA’s decisions on the final rule , see response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).
EPA estimated benefits using data and methods that provide a reasoned basis for demonstrating the benefits of the ELGs, and for comparing the relative benefits achie ved under different regulatory options. While EPA acknowledges that even the best

- available empirical estimation methods inherently include some scientific uncertainty, the Agency disagrees with the commenter that resulting estimates are “insufficient to s upport particular regulatory options.”
EPA also disagrees that the Agency has neither documented uncertainty in assessments nor quantified that uncertainty where possible, and with the commenter's implication that the Agency systematically overestimated ri sk to the degree that plausible benefits would be significantly lower. The record shows the opposite. For example, in estimating willingness to pay for water quality improvements (Chapter 4 in BCA) EPA used

– and documented

— assumptions and specifications t o minimize the risk of over

- stating the benefits. For each benefit associated with the final rule, EPA qualitatively discusses the impact of assumptions on all benefit calculations and conducts quantitative sensitivity analyses on parameters used in severa l analyses (see Appendices in the BCA).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 9 External Review Flag: No External Review Exter nal Review Incorporated into Response: No
Comment Excerpt:

 Because many of the analyses used to calculate benefits are

- interconnected, overly conservative assumptions in primary analyses (i.e., surface water contaminant modeling)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 208 will be propagated throu gh the assessment. As a result, the uncertainty is compounded in the final output (i.e., the benefit calculation). This manifests as benefits estimates that are

over

- inflated and overstate the effectiveness of the proposed control options.

 Uncertainties as sociated with selected assumptions and the impact of alternative assumptions are not quantified. Given the large impact of the some of the selected assumptions and approach to the analysis, US EPA should have explored a range of possible results in a sensi tivity analysis. For example, considering reasonable parameter adjustments for the impoundment failure analysis would reduce the estimated benefits by nearly a factor of 2. Because our analysis indicates that US EPA made several assumptions that overestima te risk, it is likely that plausible benefits of the various options, or even the basic support for the need for additional regulation, could be significantly lower and would be insufficient to support particular regulatory options.

 Overall, because of the profound uncertainty in the assessment, the failure to quantify that uncertainty, and the substantial potential overestimation of benefits, it is not clear that any of the proposed ELG regulatory options will provide a measurable benefit to human health o r the environment.

Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 206 for the response to the general statements about uncertainty.
Regarding the impoundment analysis, EPA does not agree that its analysis has overestimated risk, but the commenter does not provide sufficient detail for EPA to respond directly to the assertion that “reasonable parameter adjustments” would reduce the benefits by nearly a factor of 2. The information provided in other parts of thei r submittal describes the commenter’s concerns with specific parameters used in the calculations, noting that uncertainty in individual components of the analysis result in EPA overstating benefits by factors ranging from 4 to 10. See response to DCN EPA

- H Q

- OW

- 2009

- 0819

- 4655, Excerpt Number Numbers 38, 41, 190, and 230 (Section 29.g) for EPA's more detailed response to concerns about individual parameters.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Cont rol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 13 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Our analysis indicates that US EPA substantially overstated the magnitude of the expected cost reductions associated with the proposed ELG. Additionally, the US EPA does not explain theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 209 basis for some aspects of their analysis well enough to be able to tra ce the development of the parameters used in the analysis.
Comment Response:
The commenter generally claim

– without supported this claim with evidence

— that EPA has substantially overstated expected cost reductions associated with ELG revisions (referri ng specifically to the reduction in cleanup and other costs resulting from impoundment failures).The information provided in other parts of their submittal describes the commenter’s concern with specific parameters used in the calculations, noting that unc ertainty in individual components of the analysis result in EPA overstating benefits by factors ranging from 4 to 10. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 38, 41, 190, and 230 (Section 29.g) for a more detailed response regarding i ndividual parameters.
EPA responded to the concern that EPA did not explain the analysis well enough in comments that address specific assumptions of the cost and benefit analyses (e.g., DCN EPA

- HQ

- OW

2009

- 0819

- 4655, Excerpt 205). The BCA for the final rul e describes the data, methods, and limitations of EPA’s benefit analysis.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 224 External Review Flag: N o External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition to benefits that were not monetized at all, there are many categories of benefits for which EPA likely underestimated the monetary value. The following table, from the Synapse report, lists the benefits that, with one exception, were underestimated. 707Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 210 EPA has compounded the problem by using conservative, counterfactual assumptions that drive up the costs and economic impacts, such as by assuming that 100% of compliance costs will be borne by utilities and 0% will be passed on to consumers. Ultimately, EPA's cost

- benefit analysis compares well

- defined but nonetheless overestimated compliance costs with incomplete and underestimated benefits. For reasons of co herent and logical policy, this cost

- benefit analysis should not drive the rule. And for legal reasons, the cost

- benefit analysis cannot be a factor in deciding the BAT limitations.

707 Id. at 26.
Comment Response:
EPA acknowledges that some benefits are underestimated due to limitations in available methodology, data, or both. In its final rule analyses, the Agency specifically recognizes the potential for over

- estimated costs and under

- estimated benefits, given several potentially significant benefi ts that the Agency cannot quantify and/or monetize. EPA discusses such benefits qualitatively in Chapter 2 of the BCA. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 12 (Section 29(j)) for further details. Regarding the role of cost

-Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 211 benef it analysis in EPA’s decisions on the final steam electric rule, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number Number 3.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 32 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition, EPA underestimated numerous benefits including: reduced risk of impoundment failures due to c hanges in the use of impoundments; reduced mortality from exposure to NOx, SO2 and particulate matter and reduced CO2 emissions resulting in avoided climate change impacts; improved aquatic and wildlife habitat from improved ambient water quality in receiv ing reaches; enhanced swimming, fishing, boating, and near

‐ water activities from improved water quality; increased aesthetics from improved water clarity, color, odor, including nearby site amenities (residing, working, traveling); enhanced existence, option, and bequest values from improved ecosystem health; reduced risks to aquatic life from exposure to steam electric pollutants; improved threatened and endangered habitat and thus potential increase in threatened and endangered population; reduced inc idence of cancer due to less exposure to arsenic from fish consumption; reduced IQ losses to infants due to less in

‐ utero mercury exposure from maternal fish consumption; reduced IQ losses to children ages 0 to 7 due to less childhood exposure to lead from fish consumption; reduced need for specialized education due to less childhood exposure to lead from fish consumption; and reduced other adverse health effects (cancer and

non ‐ cancer) due to less exposure to other pollutants (arsenic, lead, etc.) from fis h consumption.
Comment Response:
EPA acknowledges that a complete accounting of all the benefits of the ELG is not possible given data and methodology limitations. EPA conducted a detailed analysis that uses the best information available to provide a re asoned assessment of the benefits of the final rule to support policy decisions. The BCA describes EPA’s efforts to accurately estimate and monetize benefits and discusses the degree to which uncertainties and limitations (e.g., data limitations, methodolo gical limitations, and others) may under

- (or over

- ) state the benefits. For more discussion on particular categories of benefits mentioned by the commenter, see responses to related comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 12 (in

se ction 29(j)).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 212 29.c. Benefits

– Human health benefits

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 15 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 More generally, costs are estimated by extrapolation from known data, which is questionable because it implies linear relationships when these may not be appropriate, but many benefits are simply left not quantified, as in the case of some health benefits.
Comment Response:
As detailed in the BCA, EPA’s analysis was as comprehensive as possible given the limitations of data and methods to quantify and monetize the benefi ts of the rule. Some benefits are difficult or impossible to quantify or monetize given current data and methods, even where these benefits are known to be present. EPA analyzed these benefits qualitatively, in accordance with OMB’s guidance on regulatory impact analysis for significant rules (see the BCA for details). For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0 819

- 4464

- A1, Excerpt Number 3.

Commenter Name: R. W. Greene Commenter Affiliation: Mercatus Center at George Mason University Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3411

- A1 Comment Excerpt Number: 22 External Review Flag: No External Review Ext ernal Review Incorporated into Response: No
Comment Excerpt:
Compliance costs are also calculated, but many environmental benefits are either not quantified or result, as in the case of estimated health benefits, from inference and assumptions worked thr ough complex modeling. Not only would it be difficult for the independent researcher to replicate the results, but such an exercise does not give well

- grounded estimates; actual benefits could easily be higher or lower.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 213 EPA disagrees th at the benefit estimates are not well

- grounded and difficult to replicate. In estimating human health benefits, the Agency relied on thoroughly reviewed scientific and epidemiological evidence and the resulting concentration

- response functions to estimate avoided case of adverse human health impacts. EPA notes that fate and transport and exposure models are well

- accepted tools for evaluating policy actions and resource management alternatives. To estimate the impact of the final rule and estimate changes i n stream pollutant concentrations, the Agency used water quality and ecological models with well

- accepted methods and assumptions (e.g., bioaccumulation factors). For more discussion of these models, see the Environmental Assessment for the Effluent Limita tions Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) . Similarly, to estimate pollutant exposure, EPA used publicly available data and various methods clearly described in the BCA.

EPA also d isagrees with the commenter’s assertion that it has not provided sufficient documentation. The commenter did not provide specific examples of lacking data or methodological descriptions that that would prevent an independent researcher from replicating EPA ’s analyses. The methodology and data used in the health benefits analyses are documented in detail in the Environmental Analysis report (Section 6) and the BCA (Chapter 3). The public record includes underlying data and models used to support analyses of human health benefits, to the extent possible given the constraints of Confidential Business Information.
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT ”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 136 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
As a practicing pediatrician, I'm deeply concerned that children are exposed to a greater dose of these toxins due to their smaller body weight, thei r earlier exposure when their organs are still in development, and even trace exposures can be devastating to the fetus.
There is a disturbing relationship between these heavy metals and the rising incidence of autism, which is now seen in 1 in 50 children

. We should all be alarmed. The cost of treating autism is estimated at $7.9 billion annually, and this is according to a 2011 report published in Health Affairs. I'm also concerned about the correlations between these radionuclides and the rapidly risi ng rate of pediatric cancer, which has an estimated cost of $95 million, according to the same study.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 214 Comment Response:
EPA shares the commenter’s concerns that infants and children are especially at risk for the adverse health effects associated with po llutant exposures, particularly lead and mercury from steam electric power plant discharges. The Agency quantified and monetized the neurological benefits of reduced mercury and lead exposure to these populations, using IQ as a quantification endpoint. Thi s approach captures some neurological impacts to children exposed to lead from fish consumption and infants exposed to mercury in

- utero, but it does not capture all populations exposed to these pollutants (e.g., infants exposed to lead in

- utero), nor all i mpacts from these pollutants. For example, many children suffer from cognitive impacts from these pollutants that are not measured as IQ, such as acquisition and retention of information presented verbally and many motor skills. As such, while IQ is the be st available quantification endpoint for the impacts of lead and mercury to children and infants, respectively, it may underestimate the benefits of reducing exposures to these pollutants.
Although the commenter notes that some research has suggested that children with autism have elevated blood lead levels, there is no established concentration

- response relationship between elevated lead exposure and autism, and EPA therefore did not quantify and monetize reduced cases of autism that may result from the re gulation.
For similar reasons, EPA did not estimate benefits associated with decreased pediatric cancers resulting from decreased radionuclides from this regulation; however, EPA did include children in the populations assessed for reduced skin cancer case s from arsenic exposure via fish consumption.
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 146 External Review Flag: No External Review External Review Incorporat ed into Response: No
Comment Excerpt:
The benefit and cost analysis estimates that the rule will produce hundreds of millions of dollars' worth of public health benefits based only on the quantifiable subset of potential health benefits. These benefits are large, even without consideration of significant effects from arsenic, mercury, lead, and other toxics subject to the ELGs. The rule will also have a number of secondary health benefits as well.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 215 Comment Response:
EPA agrees that the ELGs will resu lt in significant public health benefits, both from direct reduction in pollutant discharges to waters, and from secondary effects on air emissions and other pollution sources. The Agency quantified and monetized benefits associated with reduced

cancer cas es from arsenic exposure via fish tissue, reduced neurological effects in infants and children from mercury and lead exposure, respectively, and reduced cardiovascular impacts in adults from lead and arsenic exposure via fish tissue. The BCA for the final rule provides EPA's estimates of the annualized value of human health benefits from the final ELG. As discussed in Chapter 7 of the BCA, secondary health benefits arise from reduced air pollutant exposures.
These quantified and monetized benefits represent a fraction of the total public health benefits expected from the rule. Section 2.1 in the BCA describes unquantified benefit human health benefit categories and discusses potential bias from omitting these categories from the monetized value of the final rule benefits.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 198 External Review Flag: No External Review External Review Incorp orated into Response: No
Comment Excerpt:
1.3 million Hispanics nationwide actively participate in fishing as a recreational, social, or family activity. However, much of the Latino community is unaware that invisible toxic chemicals such as mercury, PC Bs, and other toxic substances could be present in the water and the fish that they eat.
In a number of studies, it's been shown that Latino sport and commercial anglers catch a variety of sport fish and consume fish that they catch more frequently than no n Latino consumers.
Comment Response:
EPA agrees that ethnicity plays a role in fishing habits, fish consumption rates, and behavioral changes in response to fish consumption advisories (FCAs). Differences in these factors between Latino and other angl ers may result in an elevated health risk to recreational anglers from the Latino community from exposure to the toxic chemicals in fish tissue under the baseline conditions and thus these anglers would derive comparatively greater benefits from the final ELG regulation. The final rule analysis describes the regulation’s effects on various demographic groups, including information on the minority and low

- income populations currently exposed toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 216 Steam Electric pollutant discharges. The analysis accounts for d emographic differences in fishing behaviors where possible given the available data. For more information on this revised analysis, see Chapters 3 (human health benefits) and 14 (environmental justice) of the final rule BCA.

For more on results of the envi ronmental justice analysis relevant to latino communities, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Number 92, and comment EPA

HQ

- OW

- 2009

- 0819

- 3920

- A1, Excerpt Number 127.

Commenter Name: Cathy S. Woollums Commenter Affiliation: MidAmer ican Energy Holdings Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4495

- A1 Comment Excerpt Number: 44 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 EPA relied on medical studies from the 1990s that estimate a one

- point IQ reduction from lead exposure reduces expected education years and lifetime earnings. 3,4 EPA also relied on a study 5 that estimates an annual education cost of $9,724 for the average student. EPA used these studies to est imate the value of the IQ point reduction associated with lead exposure while adjusting for the avoided cost of education. However, it is apparent that studies used by EPA underestimate the rising cost of education. Data from the National Center for Educat ion Statistics reveals that expenditures per student in public elementary and secondary schools have increased by 11% from 2003

- 04 estimates to 2008

- 09, and tuition, room and board for college undergraduates at public institutions rose 24% from 2003

- 04 to 2010

- 11 after inflation adjustments. 6 In the past decade, college graduates also face a decline in earnings by 19% for men and 16% for women after inflation adjustments. 7 Studies used by the EPA fail to account for the increasing cost of education and decl ining college graduate earnings resulting in an overestimation of the reduced earnings associated with IQ loss after adjustment for the cost of education.

3 Schwartz, 1994.

4 Salkever, 1995.

5 Chambers, 2004.

6 NCES Fast Facts, http://nces.ed.gov/FastFacts/display.asp?id=76. Last accessed July 23, 2013.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 217 7 Heller, 2013. Higher Education Not What It Used To Be. The Economist . Web version. Last accessed July 23, 2013.
Comment Response:
EPA agr ees with the commenter that costs associated with education have generally risen over time and that it is appropriate to use more recent data (instead of the U.S. Department of Education data from 2004 (updated to 2010$ using the Consumer Price Index for E ducation), EPA used in the proposed rule analysis).
For the final rule analysis, the Agency used data from the National Center for Education Statistics, which show that 2010/2011 expenditures for students are approximately $12,600 per year in 2012/2013 dollars. EPA did not adjust further for declining income for college graduates, since the lifetime average income is based on overall averages for the population, and not contingent on college graduation. See Section 3.3 of the final BCA for details.

Com menter Name: Pamela Ritger Commenter Affiliation: Clean Wisconsin Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4632

- A1 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
the EPA expects that additional health benefits would result from reduced exposure to pollutants in steam electric power plant discharges. However, a monetary valuation of these other health benefits is not possible due to lack of data on a dose

- response relationship between pollutant ingestion rate and potential adverse health effects. The EPA did conduct a non

- monetized analysis, finding that exceedances of pollutants would be reduced through implementation of the preferred options. For example, there is currently a baseline of 146 receiving reaches nationwide where in

- stream concentrations of steam electric pollutants exceed human health criteria or MCLs for at least one pollutant. Under Option 3, 3a and 3b, 119 receiving reaches would still exceed human health criteria for at least one pollutant, with 27 having all exceedances eliminated. Under Option 4a, the number of receiving reaches with pollutant concentrations exceeding human health criteria for at least one pollutant would be reduced by 98, with j ust 48 receiving reaches that remain with pollutant concentrations that exceed human health criteria for at least one pollutant. 46 While this analysis demonstrates the impact of implementing Option 4a versus the remaining three options, it does not includ e all possible human health benefits associated with post

- compliance reductions in pollutant discharges due to lack of data on a dose

response relationship between ingestion rates and potential adverse health effects. Accordingly, as noted in the EPA benef it

- cost analysis, “the total quantified human health benefits included in this analysis represent only a subset of the potential health benefits expected to result from the proposed ELGs.” 47 As a final example that the social benefits accruing from health outcomes areEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 218 likely undercounted in the EPA analysis, EPA did not quantify the benefits associated with reduced adult exposure to lead and mercury. The scientific literature suggests that exposure to lead and mercury may have significant adverse health eff ects for adults, but these impacts were not quantified. Accordingly, excluding the benefits of reduced adult exposure to these pollutants results in an underestimate of benefits. 48

46 United States Environmental Protection Agency (U.S. EPA). 2013a. Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (40 CFR 423). EPA

- 821

- R

- 13

- 004, p. 3

- 16 to 3

- 17. 47 Id. 48 United States Environmental Protection Agency (U.S. EPA). 2013a. Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (40 CFR 423). EPA

- 821

- R

- 13

- 004, p. 3

- 18.
Comment Response:
EPA agrees that addition al non

- monetized benefits may be significant. However, EPA’s ability to quantify and monetize categories of human health benefits is constrained by the availability of data and methods, such as peer reviewed and accepted concentration

- response functions fo r steam electric pollutants. Given these challenges, EPA used methods that provide the best possible estimates of the health benefits expected to arise from implementation of the final rule, and clearly described uncertainties, limitations, and exclusions in the BCA.
For the final rule, as suggested by this and other commenters, EPA was able to quantify and monetize additional health benefit categories such as reduction in cardiovascular disease mortality from adult exposure to lead, as described in Section 3.4 of the BCA, and arsenic, as described in Section 3.7. Although these additions expand upon EPA’s analysis of human health benefits and helps address some of the concern raised by the commenter, total monetized health benefits exclude some likely heal th benefits due to lack of published concentration

- response relationships for other pollutants (e.g., cadmium) and/or health effects.
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology E conomically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt N umber: 203 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 219 Comment Excerpt:

D. Water Quality Impacts to Human Health
EPA’s estimated human health benefits based on improvements to water range from $0.3 million f or regulatory Option 1 to $1.6 million for Option 5. The benefits to human health from improved water quality are likely overestimated for several reasons. First, as described above, the human health evaluation relies on many of the same modeling assumpt ions as the wildlife analysis. That is, human health risks are based on assumptions about contaminant fate and transport and uptake into fish, which as noted in earlier comments are likely to yield over

prediction of exposure. Additionally, because EPA h as assumed linearity in the dose response function (such that any decrease in exposure will decrease risk), it has overestimated the public health benefit of small decreases in contaminant exposures calculated under the different regulatory options. In th e case of arsenic, EPA has based benefits on arsenic exposures reductions that are below natural background levels.
Comment Response:
First, regarding assumptions used for to estimate contaminant fate and transport and uptake into fish, see responses to comments EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 29 (in section 25.g) and EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 23 (in section 25.f).
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Te chnology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.
Second, EPA disagrees that the use of linear concentration

- response functions results in an overestimate of benefits. The Agency relies on publishe d concentration

- response functions that were extensively peer reviewed, including reviews by the National Academy of Science and/or EPA’s Science Advisory Board. The Agency found no scientific evidence of threshold effects associated with the pollutants an alyzed (arsenic, lead, mercury) and human health endpoints used to estimate the benefits of the final rule.
The Agency recognizes that the impacts of exposure at low doses may not be the same as at high doses (i.e., the concentration response may not be li near even if a threshold effect is absent); however, this does not necessarily indicate that the impacts at low doses are overestimated in the benefits. As noted in the BCA for the final rule (Section 3.3), research has shown that lead effects on cognitiv e abilities are steeper at low doses, meaning that using a simple linear dose response function would under estimate the impacts, contrary to the commenter’s concern.
EPA applied a concentration

- response function more specific to low doses of pollutant, rat her than a simple linear concentration

- response function for all dose levels to avoid bias. For example, in the analysis of lead exposure impacts to children (see Section 3.3 of the BCA), the Agency used a concentration

- response function that is specific t o children with blood lead concentrations below 7.5 μg/dL, since the estimated mean blood lead concentration for children exposed to lead from fish consumption in the baseline is approximately 2.7 μg/dL. EPA alsoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 220 conducted a sensitivity analysis using a lo g

- linear concentration

- response function, as described in Appendix F of the BCA.
Regarding benefits from reductions in arsenic concentrations, EPA notes that the benefit estimates presented in the BCA (Section 3.6) are in line with low arsenic levels. Whil e EPA recognizes that the benefits are small and not significant relative to the total health benefits for the final ELGs, the Agency presents these results to be transparent about the magnitude of potential health benefits.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 207 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

H. EPA’s Assessment of Benefits from Mercury Reduction Is Flawed
EPA’s assessment of benefits from mercury reduction is flawed as reflected in record support documents for the proposed ELG rule. The Agency continues to rely on analysis, assumptions, and support materials thoroughly critiqued and never effectively rebutted by EPA in prior rulemakings.
Rather than fully restate the extensive critiques and their support here, we identify significant examples of (1) flaws in EPA’s mercury health benefits assessment for the proposed ELG rule; (2) where EPA made the same questionable assertions in past rulemakings; and (3) where legal and technical critiques of the analysis have been set forth without effective resolution.

1. IQ Is a Questionable Basis for Measuring Mercury Reduction Benefits
In support of the proposed ELG rule, EPA assesses benefits from reduced exposure to mercury by estimating reduction in IQ losses among children exposed to mercury in

- utero as a result of maternal consumption of contaminated fish

. BCA at 3

- 11. EPA similarly relied on estimates of IQ loss reductions in prior rulemakings, including the CAMR and MATS rules. As further detailed in comments on those rulemakings, EPA’s use then and now of IQ loss estimates to estimate benefits in red uction of mercury is wholly inappropriate. EPA’s IQ loss

- based assessment is inappropriate, both in the current and prior rulemakings, for the following reasons:

a. Changes in IQ are not a well

- defined health consequence of mercury exposure. See UARG Comments on the National Emissions Standards for Hazardous Air Pollutants from Coal

and Oil

- Fired Electric Utility Steam Generating Units, EPA

- HQ

- OAR

- 2009

- 0234 (August 4, 2011) (UARG 2011 MACT Comments) at 69; EPRI Comments on the National EmissionsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 221 Standards for Hazardous Air Pollutants from Coal and Oil

- Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil

- Fuel

- Fired Electric Utility, Industrial

Commercial

- Institutional, and Small Industrial

- Commercial

- Institutional S team Generating Units (August 4, 2011) (EPRI 2011 MACT Comments) at § 3.12.

b. EPA assumes a dose

- response relationship between methylmercury exposure and IQ based on a study by Axelrad, et al. (2007) (BCA at 3

- 12) that was developed for marine fis h and mammalian species whereas EPA’s risk assessment for the proposed ELG rule (as in the CAMR and MACT rulemakings) involves risk exposure from freshwater fish consumption. The effects of these exposure differences are unaddressed in the record. Furthe rmore, the Axelrad, et al. study pulled from three primary studies

- none of which originally measured full IQ

- and resulted in a relatively small incremental change not measurable on an individual level that must be estimated for a population to derive n ational levels. EPRI 2011 MACT Comments at § 3.12.

c. EPA relies on valuation models ( e.g. , Schwarz (1994) and Salkever (1995)) to translate IQ loss estimates into reductions in lifetime earnings (BCA at 3

- 13); however, the national data set used to estimate the relationship between IQ and lifetime earnings does not contain a direct measure of IQ, but instead relies on scaled adjustments from an armed forces qualification test, which results in loss of precision. EPRI 2011 MACT Comments at § 3.13.

d. EPA relies on a highly controversial and overly conservative Agency

- developed methylmercury RfD value to estimate exposure risks and draw conclusions about IQ

- based risk, which is inappropriate for the many reasons described below. EPRI 2011 M ACT Comments at § 3.11.
In recognition of the significant uncertainties associated with use of IQ loss to assess mercury reduction health benefits, a Scientific Advisory Board review panel reviewing the MACT rulemaking recommended de

- emphasis of such analy sis. SAB Letter to EPA regarding Review of EPA’s Draft National

- Scale Mercury Risk Assessment (Sept. 29, 2011) at 2. Despite the associated uncertainties and the SAB’s recommendation of its de

- emphasis, EPA continues to rely on IQ loss to assess mercury reduction health benefits. This is wholly inappropriate.
Comment Response:
Any comments related to rules other than the steam electric ELG are outside the scope of this rulemaking and comment response document. For information on the role of benefits a nalysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3.
EPA disagrees that reliance on IQ loss to assess mercury reduction health be nefits is inappropriate. The commenter makes several points, which the Agency addresses below:
First, the commenter asserts that changes in IQ are not a well

- defined health consequence of mercury exposure. EPA disagrees. Several epidemiological studies hav e demonstrated the relationship between exposure to mercury in

- utero and IQ, including the examples provided inEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 222 the next paragraph which provide the functional form of the relationship between mercury exposure and IQ effects.

Second, the commenter takes is sue with the particular function used to relate exposure and IQ. As documented in the BCA, to estimate impacts of mercury exposures to IQ, EPA applied a concentration

- response function from Axelrad and others (2007), which drew on data from three large

- sca le epidemiological studies (in New Zealand, the Faroe Islands, and the Seychelle Islands). The National Research Center (NRC) has described the studies as being “well designed and carefully conducted, and each examined prenatal MeHg exposures within the ra nge of the general U.S. population exposures” (from the 2000 report Toxicological Effects of Methylmercury ). EPA has no evidence of differences in health outcomes resulting from methylmercury exposure via consumption of marine fish and freshwater fish.

Add itionally, while the SAB Letter to EPA regarding review of EPA’s Draft National

- Scale Mercury Risk Assessment (September 29, 2011) expresses concern over the use of IQ as the indicator of neurobehavioral effects as noted by the commenter, this concern is b ased on the fact that SAB considers IQ to be an insensitive indicator of the effects and as such may result in an underestimate of benefits . SAB recommended that EPA explore additional endpoints, but did not recommend eliminating the use of IQ endpoints al together. Further, as noted by the SAB, there is no substitute for IQ that can be quantitatively estimated with a “reasonable degree of confidence” (see page 7 of the report accompanying the SAB letter, Review of EPA’s Draft National

- Scale Mercury Risk Ass essment).
Third, the commenter raises concerns about the approach used to estimate the monetized value of avoided IQ decrement. As noted by the commenter, EPA used estimates from Schwartz (1994) and Salkever (1995) of the change in lifetime earnings result ing from a one

- point change in IQ. EPA disagrees with the commenter that the use of these studies results in a loss of precision. In fact, Salkever (1995) addresses the translation issue directly in the study. As noted in Salkever (1995), the Armed Forces Qualifying Test (AFQT) is the underlying test of cognitive abilities in the studies, which has been used in a wide variety of studies in sociological, psychological, and neurological fields. In the studies used by Schwartz (1994) and Salkever (1995), the A FQT score is converted to IQ units by assigning a score to each percentile AFQT based on a normal distribution with a mean of 100 and a standard deviation of 15. Since this translation of AFQT scores onto an IQ scale is a linear transformation, it does not influence the results (see Salkever (1995), page 3).
Finally, the commenter states that EPA “relies on a highly controversial and overly conservative Agency

- developed methylmercury RfD value to estimate exposure risks and draw conclusions about IQ

- based r isk.” EPA does not use a methylmercury RfD value to estimate exposure risks, nor to draw conclusions about IQ

- based risks. Instead, EPA quantified IQ

- based risks to the exposed population based on an established concentration

- response function, as describe d above and in the BCA.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 223 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 209 External Review Flag: No External Review External Review Incorp orated into Response: No
Comment Excerpt:

3. Lack of Record Transparency
As highlighted by SAB Peer Review of prior EPA assessment of health benefits from mercury reduction, documentation of such analysis is “deficient” where lacking “transparency in d escribing key analytical methods and findings” (SAB Letter at 2) and the “integrity” of a “risk assessment” is “dependent in part on a transparent description of the analysis ...” ( Id. at 1). Lack of transparency remains a substantial issue in assessing th e proposed ELG rule mercury reduction health benefits analysis approach, specifically, and throughout the proposed ELG rule record support documents, more generally.
Having quantified expected benefits from mercury reduction generally, EPA then estimates b enefits expected in conjunction with the proposed ELG rule specifically. EPA’s analysis of mercury reductions expected from the proposed ELG rule, is lacking in transparency. This is in great part due to minimal, missing, and disjointed details on the re cord regarding pollutant impacts modeling and associated assumptions and data inputs.
This lack of transparency undermines the integrity of the mercury reduction estimate and, in turn, associated benefits analysis and EPA’s record support for the proposed ELG rule as a whole.
Comment Response:
EPA disagrees that the final rulemaking record for the steam electric ELGs lacks transparency.
The methodology and data used in the environmental assessment and health benefits analyses are detailed in Section 6 of the Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) and Chapter 3 of the BCA, respectively. Given that the commenter did not identify spe cific items missing from the public record, EPA is unable to provide a more focused response to direct the commenter to the particular documents where to find certain items.
EPA notes that the SAB Peer Review letter cited by the commenter refers to a diffe rent benefit cost analysis, not the analysis EPA conducted for this particular rulemaking.
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see respons e to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 224 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 231 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition to Gradient’s analysis, UWAG has looked independently at aspects of EPA’s Environmental Assessment that EPA offered in rulemakings under the Clean Air Act, pa rticularly the Clean Air Mercury Rule (CAMR) (now vacated) and then the MATS Rule. In assessing the environmental and human health effects of mercury for those rulemakings, EPA used assumptions and methods that were challenged in comments by the Utility A ir Act Group and others. EPA should have reconsidered those assumptions and methods for this ELG rulemaking but apparently has not. Accordingly, we summarize here, again, the flaws in EPA’s approach to calculating the effects of mercury in the environmen t.
Comment Response:
For responses to similar comments about the Agency’s methods for the final steam electric ELGd, see responses to comment EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 207 and 209.

Commenter Name: Elizabeth E. Aldridge, Hunton & Willia ms Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 35 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In addition to overestimated exposu re, US EPA has made the assumption that the dose response function for the three contaminants evaluated in the benefits analysis

— arsenic, lead, and mercury

— is linear. This means that any reduction in exposure, however small, will confer a health benefit, e ven in cases where the baseline exposure was not associated with a contaminant level of public health significance. The overestimates of benefits associated with lead and arsenic, as examples, are discussed in more detail below. The specific modeling appro aches used were described by US EPA (2013c, Appendix E).

4.1 LeadEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 225 US EPA estimated benefits to pre

- school children (age 0 to 7) from reduced lead exposure via consumption of contaminated fish. To perform the benefit analysis, US EPA modeled blood lead (PbB ) concentrations under the baseline and post

- compliance scenarios, and then used a dose response relationship between PbB and IQ loss to estimate avoided IQ losses in the affected population of children, and reduced incidences of IQ scores less than 70. US EPA then calculated the monetary value of benefits to children based on the impact of an additional IQ point on an individual's future earnings, and the cost of compensatory education for children with learning disabilities (including children with PbB ab ove 20  g/dL and IQ less than 70).
US EPA estimated the annual benefits from avoided IQ losses for children ages 0 to 7 (Table 3

- 4). For a 3% discount rate, the benefits ranged from $0.06 to $7.94 million, depending on the control option. For a 7% discount rate, the benefits ranged from $0.01 to $0.08 million, depending on the control option. These results demonstrate that the benefits from avoided IQ losses are very small, particularly when compared with the estimated annualized benefits from reduced air e missions, which were $127.6 and $170.5 million for Options 3 and 4, respectively, at a 3% discount rate (Table 8

- 8).
US EPA assumed that 20 percent of children with PbB above 20 μg/dL would have IQs less than 70 and require compensatory education. We note that it is highly improbable that any child would have a PbB above 20 μg/dL due to fish consumption under any of the modeled scenarios, and even less probable that they would also have an IQ less than 70. For example, using US EPA's estimated mean PbB of 2 .7 μg/dL 3 under the baseline scenario, and the default IEUBK model GSD of 1.6, the probability of a child having a PbB above 20 μg/dL is only 0.001%, and 20% of this value is 0.0002%. US EPA's estimated annual benefits for avoided compensatory education ra nge from $0 to $0.07 million, depending on the scenario and discount rate (Table 3

- 5). These results demonstrate that the benefits from reduced compensatory education are very small, particularly when compared with the estimated benefits from reduced air e missions, as noted above.

3 This value was assumed to be a geometric mean.
Comment Response:
EPA disagrees that the use of linear dose response functions results in an overestimate of benefits. First, the Agency relies on published concentration

- respon se functions that were extensively peer reviewed, including reviews by the National Academy of Science and /or EPA’s Science Advisory Board. The Agency found no scientific evidence of threshold effects associated with the pollutants analyzed (arsenic, lea d, mercury) and human health endpoints used to estimate the benefits of the ELGs.
The Agency agrees that the impacts of exposure at low doses may differ from those at high doses (i.e., the dose response may not be linear even if a threshold effect is absen t), but this does not necessarily indicate that the impacts at low doses are overestimated in the benefits. In fact, as noted in the BCA (Section 3.3), research has shown that lead effects on cognitive abilities areEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 226 steeper at low doses, meaning that the u se of a simple linear dose response function would result in an underestimate of impacts, contrary to the commenter’s concern. When warranted, EPA applied a concentration response function appropriate for low level exposure (e.g., lead), rather than a simp le linear dose response function for all dose levels to avoid bias.
EPA agrees with the commenter that the estimated annual benefits associated with reduced childhood exposure to lead via fish consumption are small compared with the estimated benefits of r educed air pollutant emissions. This finding is not surprising given differences in the geographic scope of the exposed populations for the two regulations the commenter compares. This was also particularly true of the proposed rule analysis which consider ed exposure only for immediate reaches receiving steam electric power plant discharges. The final rule analysis considers exposure in both immediate and downstream reaches, but this is still a subset of all reaches that may be affected by air deposition. E PA further notes that health benefits to children ages 0 to 7 from reduced lead exposure, although they may seem low at the national level and are small relative to other benefits of the ELG, are significant for the communities residing in the vicinity of the affected reaches. EPA estimated that the final rule will improve water quality by reducing lead concentrations in approximately 28,000 stream miles and will result in annualized benefits to children of approximately $0.8 million to $1.1 million, using a 3 percent discount rate ($0.1 to $0.2 million using a 7 percent discount rate). See Section 3.3 of the BCA for detail.
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically A chievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 36 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
US EPA's benefit analysis used a linear dose

- response relationship between PbB and IQ of

- 2.94 IQ points per μg/dL for children with PbB concentrati ons below 7.5 g/dL, based on a study by Lanphear et al. (2005). US EPA should consider a range of values for the dose response relationship (as was done for the Lead NAAQS), rather than relying on one value from one study. In the Lead NAAQS Final Rule (US EPA, 2008b, pg. 66978), US EPA discussed the slope of

- 2.94 from Lanphear et al. (2005), but also included the slope of

- 1.71 for the subset of 24

- month old children in a Mexico City cohort with PbB levels < 5 μg/dL (n = 193), for which the mean concurrent PbB was 2.9 μg/dL (Tellez

- Rojo et al. 2006, 2008, as cited in US EPA, 2008b). US EPA also included two slopes derived from a loglinear function with low

- exposure linearization (LLL) in the Lanphear et al. (2005) study:

- 2.29 at 2 μg/dL, and

- 1.89 at 3 μg /dL. US EPA noted that for PbB up to approximately 3.7 μg/dL, they placed the "greatestEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 227 confidence" in the slopes derived from the LLL function, and that these slopes lie intermediate between the other two values [

- 1.71 and

- 2.94] (US EPA, 2008b). Thus, U S EPA's own risk assessment done in support of the revised Lead NAAQS used an IQ/PbB slope less than

- 2.94, and if a lower slope had been used here, the derived benefits would be even lower than those estimated in Table 3

- 4 of the benefits analysis.

Finall y, another key issue related to the effects of lead on IQ is that, while a modest association with low

- level lead exposure may be measurable in population

- based studies, these effects would not be measurable and would be unlikely to be of any clinical sig nificance in an individual (i.e., the reduced lead exposure would not provide any meaningful health benefit in an individual). The decrease in predicted PbB was not explicitly presented in the cost benefit analysis, but under most scenarios the decrease wa s presumably very small given the modest associated benefit. Thus, the small associated increase in IQ is unlikely to manifest in any meaningful way on an individual child's intellectual ability. The available studies of low

- level lead exposures rarely add ress this issue. This limitation, however, has been acknowledged by CDC, the agency charged with developing childhood lead intervention programs. In particular, the report issued by the CDC advisory committee expressed its concerns with low

- level lead expo sures in the context of "the public health impact," rather than in the context of impacts on individuals (CDC, 2012).

4.2 Arsenic

Similar to lead, US EPA estimated the annual benefits from avoided cancer cases from arsenic exposure via fish ingestion. The number of avoided cancer cases (and the monetized) benefit was smaller than for lead. For a 3% discount rate, the benefits ranged from 0 to $0.2 million, depending on the option, while the benefits using a 7% discount rate ranged from 0 to $0.01 to $0.08.
Although these benefits are relatively small, they are likely overestimated because the reduction in cancer cases is predicated on a low

- dose linear dose

- response relationship for arsenic. The assumption of linearity in the human health benefits analysis, i.e., that any decrease in exposure will confer a health benefit is particularly problematic for arsenic because the proposed ELG rule has quantified human health benefits from arsenic reductions that are below background. For example in the EA, US EPA est imated baseline levels in the "immediate receiving water" that are significantly lower than background levels across the (US EPA, 2013c). Specifically, in the EA, US EPA has calculated the 50th percentile baseline arsenic concentration of 1.72E

- 05 mg/L (0. 017 μg/L) (Table F

- 2); while a US survey (conducted by the US EPA) demonstrates that US surface water bodies have a geometric mean of 0.19 μg/L (US EPA, 2001b). Thus, under the regulatory options the estimated benefits are contingent on removing arsenic be low background levels.
Moreover, the EA document states that "EPA used the benchmark value for evaluating cancer risk of one in 1,000,000 people. Therefore, a calculated LECR [lifetime excess cancer risk] greater than 1 × 10

- 6 indicates carcinogenic human health impacts from the consumption of fish exposed to discharges of evaluated waste streams" (US EPA, 2013c). Using a benchmark of 1 x 10

- 6 for arsenic is not supportable. Background risk to arsenic from food, water, and soil areEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 228 estimated to be 1.1 × 10

- 4 at 50th percentile exposures and 3.4 × 10

- 4 at the 95th percentile (Petito Boyce et al., 2008). While US EPA does not present the actual risk values for baseline and each regulatory option, presumably the risks are small, since the most significant benef it (under Option 5), resulted in a reduction of total cancer cases of 0.7 over a 25 year period (for a population of 137,467). This small decrease in cancer cases would be associated with a very small cancer risk, below the level that is typically observed for individuals across the US.
Finally, the assumption that arsenic dose

- response in linear at low doses is not well supported (and is being actively debated) (Petito Boyce et al., 2008; Cohen et al., In press). Epidemiological studies, overall, are consi stent that measurable effects are observed only at drinking water concentrations above 100 μg/L (i.e., doses above 0.003 mg/kg

- d 4 ) (Cohen et al., In press). A nonlinear dose

- response for arsenic is also supported by animal and in vitro studies. Based on th e available evidence, there simply is no credible scientific support that small decreases in arsenic exposures (as those calculated from reduced fish consumption under the various ELG options 5 ) would reduce cancer risk.

4 Assumes a 55

- kg individual drin ks 2 L water/day. 5 The arsenic doses associated with fish ingestion are not presented in the ELG, but based on the calculated cancer risks, the doses (mg/kg

- d) can be assumed to be on the 10

- 6 order of magnitude.
Comment Response:

For information on th e role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3 (in comment code 6.e).
The commenter requests that EPA “c onsider a range of values for dose response relationship... rather than relying on one value from one study.” EPA notes that the Lanphear et al. (2005) study the Agency used is a pooled analysis that included seven prospective studies initiated prior to 1995 and included 1,333 children where complete data on confounding factors were available. The pooled analysis by Lanphear et al. (2005) is the best study available for estimating the IQ loss associated with elevated blood lead levels because it evaluated the relationship between elevated blood lead levels and IQ loss across a much larger population, several countries, various patterns of lead exposure, and a wider range of socioeconomic conditions compared to any other study.
The commenter cites another study , Tellez

- Rojo et al. (2006, 2008); however that study looked at a single age cohort in a small geographic area. Lanphear et al. (2005) study is a superior study because of its broader scope in populations and lead exposure.

The commenter notes that in the lead National Ambient Air Quality Standards (NAAQS) analysis, EPA “also included two slopes derived from a loglinear function with low

- exposure linearization (LLL) in the Lanphear et al. (2005) study:

- 2.29 at 2 μg/dL, and

- 1.89 at 3 μg/dL.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 229 US EPA noted t hat for PbB up to approximately 3.7 μg/dL, they placed the "greatest confidence" in the slopes derived from the LLL function.” For the final steam electric ELG rule, EPA has conducted an additional sensitivity analysis applying a log

- linear concentration response function that was also used in the NAAQS analysis. This sensitivity analysis is discussed in Appendix F of the BCA.
EPA agrees with the commenter that lead

- related IQ impacts may generally be clinically insignificant at the individual level; howev er, population

- level impacts are the appropriate unit of analysis for such benefits. As such, any lack of clinically significant impacts to a single individual from the ELGs does not undermine benefits calculated.
Regarding the commenter’s concern regardin g modeled arsenic concentrations, EPA agrees that in some instances, the IRW model (which does not account for arsenic contributions from non

steam

- electric point sources or background concentrations) calculated arsenic concentrations in the water column t hat are less than background levels. However, some steam electric power plant discharges result in arsenic concentrations up to 10,000 times greater than the geometric mean provided by the commenter. EPA disagrees that “the estimated benefits are contingen t on removing arsenic below background levels.” For the final rule, EPA based the arsenic human health benefits on reduced arsenic concentrations in receiving waters as calculated by the RSEI model (which does account for non

- steam

- electric point sources) which are then used to calculate reduced arsenic intake via fish consumption. Under baseline conditions, the RSEI modeling results indicate an average total arsenic concentration of 17.7 μg/L [DCN SE04588] in the modeled stream reaches downstream from stea m electric power plant discharges, which is nearly ten times greater than the geometric mean background concentration provided by the commenter. The benefits are derived from steam electric power plants meeting the final ELGs and reducing arsenic concentra tions in receiving waters to below these modeled baseline concentrations. This does not require “removing arsenic levels to below background levels.”
EPA disagrees that “(u)sing a benchmark of 1 x 10

- 6 for arsenic is not supportable.” The commenter notes t hat background cancer risk from arsenic exposure could be higher than this threshold. EPA used this cancer risk threshold in the IRW model to indicate whether arsenic loadings from steam electric power plants alone are significant enough to cause elevated cancer risk due to fish consumption. Because the IRW model does not account for background pollutant concentrations, a modeled exceedance of this cancer risk threshold (and avoided exceedances under the final rule) would be solely attributable to arsenic l oadings from the steam electric power plant and is calculated independently from any background sources of arsenic. Additional sources of arsenic in the receiving water could result in a greater cancer risk than calculated by the IRW model.

The selected th reshold is within the range of cancer risk thresholds employed by EPA for various analyses (from 1 x 10

- 6 to 1 x 10

- 4 ), and EPA selected this threshold to be most protective of carcinogenicity and to assess the potential effects on human health. EPA notes that the use of this cancer risk threshold in the EA does not influence the calculation of human health benefits, which are based on an estimate of the number of cancer cases under baseline and the avoided cancer cases under the final rule.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 230 The commenter n oted that the assumption that the arsenic concentration

- response function is linear at low doses is being debated. EPA acknowledges that the effects of low

- dose exposure to arsenic is an active area of research (see overview in Schmidt, 2014). Some researc hers present evidence for a threshold at levels below 100 μg/L in drinking water (Cohen et al. 2013) and recent studies have linked low

- doses of arsenic in humans with diabetes (Navas

- Acien et al., 2008), cardiovascular disease (Moon et al., 2013), immunot oxicity (Dangleben et al., 2013), and cancer (Gilbert

- Diamond et al, 2013; Garcia

- Esquinez et al., 2013; Mostafa et al., 2013).
EPA is currently revising its inorganic arsenic assessment (both cancer and non

- cancer) with guidance from National Research Cou ncil and expects to complete this effort in 2016. The Agency has regularly treated carcinogens assuming low

- dose linearity and used this assumption in the final rule analysis. Further, while NRC (2013) recommended that EPA consider lung cancer, bladder can cer, ischemic heart disease, and skin lesions in the assessment, EPA only had sufficient evidence to include benefits from reductions in skin cancer in the quantified benefits of the ELG and relied on the existing cancer slope factor for skin cancer only. The omission of other cancer and non

- cancer effects results in an underestimate of the health benefit associated with reduced arsenic exposure via fish consumption.
EPA disagrees that the record “does not present the actual risk values for baseline and eac h regulatory option.” The databases with calculated risk values for each modeled immediate receiving water are listed in DCN SE04452, which is included in the confidential record.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 41 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Reduced incidence of cancer due to less exposure to arsenic from fish consumption; reduced IQ losses to infants due to less in

‐ utero mercury exposure from maternal fish consumption; reduced IQ losses to children ages 0 to 7 due to less childhood exposure to lead from fish consumption; reduced need for specialized educat ion due to less childhood exposure to lead from fish consumption; and reduced other adverse health effects (cancer and non

‐ cancer) due to less exposure to other pollutants (arsenic, lead, etc.) from fish consumption: The proposed ELGs are expected to redu ce the number incidences of cancer from consumption of fish containing arsenic. EPA first determines how many fewer people will be exposed to arsenic, and from this values the benefits of reduced cancers. EPA fails, however, to value risks to recreational anglers and subsistence fishers downstream of receiving reaches: “By omitting downstream effects, this analysis potentially understates baseline risks that could be reduced by the proposed ELGs, and therefore underestimates the benefits.” 88 A cancer slope factor

— taken from toxicology studies

—Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 231 is then applied this underestimated exposure rate. A cancer slope factor is the number of cases of cancer expected based on a population’s exposure to a given carcinogen.
EPA uses an arsenic cancer slope factor that is significantly smaller than the value that it has proposed as an updated arsenic cancer slope factor. As the benefit

‐ cost analysis for the proposed steam electric ELGs explains, “EPA is currently revising its cancer assessment of arsenic to reflect new data on internal cancers. It is possible that the revised combined (lung and bladder cancer) [cancer slope factor] would be higher (draft value is 25.7 per mg/kgBW/day), suggesting that the use of the current [1.5 cases per mg/kgBW/day] value may result in a n underestimate of benefits.” 89 Inclusion of downstream reaches and more up

‐ to

‐ date cancer parameters would dramatically increase the expected reduction in cancer cases from lower exposure to arsenic from fish consumption, and would increase the total mone tized benefit of the regulatory options. The new, draft, value for the cancer slop factor is over 17 times higher than the slope factor currently used by EPA. Had EPA used the updated value (albeit a draft value) they would have calculated 17 avoided canc er cases for every one cancer case currently reported as avoided. That multiplier would carry over through the rest of EPA’s calculation and would result in value of reduced cancer cases 17 times higher than the currently reported value.

For mercury

‐ and lead

‐ related benefits, EPA used IQ losses as the measured effect, or “endpoint,” for quantifying adverse resulting from childhood or in

‐ utero exposure to these toxins. EPA points out that:
IQ may not be the most sensitive endpoint. Additionally, there are deficits in cognitive abilities that are not reflected in IQ scores, including acquisition and retention of information presented verbally and many motor skills. To the extent that these impacts create disadvantages for children exposed to mercury at curr ent exposure levels or result in the absence of (or independent from) measurable IQ losses, this analysis may underestimate the benefits of the proposed ELG of reduced lead and mercury exposure. 90

EPA’s assumptions result in an undervaluation of the benefi ts associated with (1) reduced IQ losses to infants from reduced in

‐ utero mercury exposure from maternal fish consumption, (2) reduced IQ losses to children ages 0 to 7 from reduced childhood exposure to lead from fish consumption, and (3) reduced need for specialized education from reduced childhood exposure to lead from fish consumption. Using a more holistic method, beyond IQ point loss, would result in an increase in benefits associated with childhood development. (Below we discuss additional

concerns w ith EPA’s methodology for monetizing IQ losses avoided by the proposed ELGs.)

88 Benefit

- Cost Analysis, p.3

- 17, Table 3

- 9.

89 Benefit

‐ Cost Analysis, p.3

‐ 17, Table 3

‐ 9. Mg/kg /day is milligrams of toxin per kilogram of body weight per day exposed.

This means that 1.5 cases of cancer are observed for every milligram of arsenic per kilogram of body weight per day exposed.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 232 90 Benefit

‐ Cost Analysis, p.3

‐ 17, Table 3

‐ 9.

88 Benefit

‐ Cost Analysis, p.3

‐ 17, Table 3

‐ 9.
Comment Response:
EPA agrees that excluding downstream populations and using a cancer slope factor that may not reflect the total cancer risks associated with arsenic exposure via contaminated fish consumption likely results in an underestimate of the health benefits. In response, EPA revised its a nalysis to include downstream reaches in the analysis of human health benefits for the final rule. See Chapter 3 of the BCA for detail.
Regarding the CSF, EPA used the CSF that has been published in the Integrated Risk Information System (IRIS) and reflect s incidences of skin cancer cases resulting from arsenic exposure via ingestion (1.5 cases per mg/kg BW/day). As mentioned by the commenter, EPA is currently revising its cancer assessment of arsenic to reflect new data on internal cancers (lung and bladde r) that have also been associated with arsenic exposure. Because EPA has not finalized the revisions to the CSF for use in risk analyses, the Agency decided to continue using the existing CSF for ingestion in its benefit analysis of the final ELG.

EPA also agrees that using only IQ to quantify and monetize the benefits associated with reduced children’s and infants’ exposure lead and mercury likely results in an underestimate benefits from improved neurological functions in children, as described in Section 3.10 of the BCA for the final rule. As noted in the comment, IQ may not be the most sensitive health endpoint, and it does not capture impacts to other cognitive abilities such as acquisition and retention of information presented verbally and many motor skills. However, available concentration response functions limit the range of impacts that may be quantified and monetized. EPA used the best data and methods available to estimate the benefits of the final rule.

For information on the role of benefits an alysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. D ocument Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 44 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Use of (diverging state) income in valuing human lifeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 233 In one section of the proposed steam electric ELGs benefits analysis, EPA suggests, with little explanation, the ethically troubling and politically controversial notion that the lives of richer people are worth more than the lives of their fellow citizens with lower i ncomes. This judgment is never stated explicitly, but is implied by the following technical paragraph from the benefit

‐ cost analysis (sentences in the quoted paragraph are separated here to facilitate discussion):

The value of cancer risk reduction is a “ normal good,” and thus is expected to grow over time as real income grows.

EPA used historic state

‐ specific median household income data ... for the years 1984 to 2009, and applied a stepwise autoregressive forecasting method to estimate future annual state level median household income through 2040.
For each year in the analysis, EPA adjusted the VSL to account for income growth projections and the mid

‐ range income elasticity assumptions... 94

VSL is an abbreviation for “value of a statistical life,” a stan dard monetization of the benefits of avoided premature deaths; it is the basis for the valuation of cancer risk reduction in the proposed steam electric ELGs. A “normal good,” in economics, is one for which the demand grows as income rises. Thus the first quoted sentence asserts that the value of lives saved by cancer risk reduction is expected to grow as the income of the general population grows.
Earlier on the same page, EPA notes that the current default VSL is $8.0 million (in 2010 dollars) per life s aved; that value is typically applied to people throughout the country, independent of income. 95 In order to apply it to future cancer risk reduction, however, EPA felt it necessary to calculate state median incomes; the second sentence quoted above descri bes a statistical procedure EPA used to forecast state median incomes through 2040.
It is unclear, from the limited explanation provided by EPA in the documentation to the proposed steam electric ELGs, which of two procedures was then followed. On the one hand, EPA could merely be engaging in an unusually complex method of projecting the national average growth of incomes, and hence the growth of the national VSL; indeed, through personal correspondence with EPA and its consultants, we were assured that th is first explanation accurately describes the use of median income in the proposed steam electric ELGs. 96 On the other hand, EPA’s methodology as described in the Benefit

‐ Cost Analysis could easily be interpreted as projecting state

‐ specific values of the VSL, based on future interstate differences in income. Under the former interpretation, there are no new problems raised here, other than the use of a nonstandard and needlessly circuitous method of forecasting the growth of national average incomes. Under the latter interpretation, however, EPA would be breaking new ground in a disturbing direction.
The third sentence quoted above could be read

— and introduced as precedent into future rulemakings

— as saying that EPA adjusted the VSL for future years based o n state income growth. While presumably starting at a single national value for the recent past, the value of life would then diverge along with state income growth rates in the future. The “mid

‐ range incomeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 2 34 elasticity assumptions,” referred to at the end of the quote, determine the pace at which the value of life changes with income. EPA’s assumption of an elasticity of 0.4 (in footnote 27, on the same page of the benefits analysis) means that every 1 percent increase in income is associated with a 0.4 pe rcent increase in the value of human life.
In the absence of EPA’s (unpublished) state median income projections, it would not be possible to determine exactly how unequal the projected values of lives would become by 2040. From 1984 to 2009, the averag e annual growth in real median household income ranged from 1.1 percent in the District of Columbia to

‐ 0.3 percent in Kansas. 97 If these growth rates continued for another 30 years, from 2010 through 2040, and EPA’s elasticity assumption applied to income growth by state, then by 2040, a human life would be worth 18 percent more in DC than in Kansas. 98 In short, this unconventional method would assign higher values to some future human lives than to others. It appears that this usage is not intended by EPA , but the ambiguous language in the Benefit

‐ Cost Analysis nonetheless opens the door to future uses of differentiated incomes in VSL calculations.
The application of income elasticity to VSL estimation is unorthodox and, if its use took place in a less ob scure EPA publication, would almost certainly be controversial. In addition, this departure from the EPA’s more traditional monetization procedures raises a question regarding the use of income

‐ dependent VSLs in other analyses: If the “income elasticity a ssumption” is applicable to the future growth of income, does it apply to base

‐ year differences in income as well? There is no obvious logical difference between past and future income inequality, when it comes to valuing human lives. In 2011 the richest s tate, Maryland, had median household income 1.9 times as large as the poorest state, Mississippi. 99 Under EPA’s assumption that avoiding death from carcinogenic pollutants is a “normal good” whose value is higher at higher income levels, one could argue th at life is worth 30 percent more today in Maryland than in Mississippi. 100

This approach to benefit

‐ cost analysis, extended more broadly, could lend support to numerous morally repugnant conclusions: It would, for example, reliably demonstrate the greater monetized benefit of protecting human health in richer communities, seemingly providing “objective” economic grounds for concentrating hazardous facilities in poor neighborhoods. Valuing human lives based on their income is at variance with a legal system premised on equal protection for all and clashes with widely held ethical, philosophical, and religious beliefs that assign an equal worth to every human being.

As noted above, it seems that EPA did not intend to introduce state

‐ specific VSL calculations. For the reasons explained here, we hope that the ambiguity in EPA methodological description is resolved and EPA’s position on using different VSLs for different populations made clear.
Valuing children’s IQ loss: Is lower educational expenditure a benef it of pollution?
To monetize reductions in childhood ingestion of lead, EPA estimates the economic losses that result from lower IQs, a well

‐ documented consequence of lead exposure. 101 The principal economic effect of a lower IQ is a reduction in the prese nt value of lifetime earnings (since, onEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 235 average, people with higher IQs have higher incomes). Depending primarily on the chosen discount rate, EPA estimates that incomes are $2,429 to $14,631 lower for each lost IQ point.

EPA then reduces this income los s to take account of an offsetting factor: Students with lower IQs spend fewer years in school, reducing society’s educational costs. This calculation is troubling in at least three respects: It raises philosophical questions about the treatment of reduced education as a benefit; it miscalculates the true marginal cost of reduced education; and it entirely omits discounting of these changes in costs, which often occur more than a decade after exposure.
If lead poisoning results in children leaving school a t a younger age, is the reduced cost of education a benefit to society, or a measure of what has been lost through environmental harm to the next generation? EPA’s numerical tally of reduced school costs opts for the former answer: the less schooling, the more society saves. This is numerically accurate in a short

‐ run, tunnel vision of the bottom line, but substantively absurd in a broader, long

‐ run view of social value, responsibility to the nation’s children, and the human and economic benefits of educati on. Viewing these lost years of education instead as a loss to society would increase the monetized benefits of the lead poisoning avoided by implementing more stringent ELGs.
Setting aside such broad framing questions, EPA uncritically adopts a simple estimate of cost savings due to slightly reduced years of schooling. The cost used by EPA, $9,724 (in 2010 dollars) per pupil

‐ year of school, comes from a document that calculates the average cost of K

‐ 12 education. 102 Elementary and secondary education sy stems, however, have substantial fixed costs in facilities and tenured faculty and staff; thus the marginal cost of a small change in the number of pupils is likely to be much smaller than the average cost. It is, of course, only the marginal cost that is avoidable by a small change in the number of pupils, and the lead

‐ induced change in numbers at any one school system will be quite small. Again, using the small marginal cost of reduced education costs instead of the inflated average cost would increase t he monetized benefits of ELGs.
Moreover, a significant fraction of children will go on to post

‐ secondary education, which is frequently financed as an investment by the student or the student’s family. A lead

‐ related reduction in the years of post

‐ second ary education

— assuming the same calculation remains applicable at this level

— has different consequences and cost implications than a reduction in public K

‐ 12 education. Reduced investment in a student’s future, by the student or family, is again a sad indi cator of what has been lost; it is not in any sense a social benefit.
Finally, EPA neglects to discount the estimated “savings” from reduced education expenditure, but simply subtracts the current estimate of savings from the present value of lost earnin gs. If children are impaired by lead exposure in early childhood, while the slight resulting reduction in years of schooling occurs in high school, then the “savings” occurs many years after the exposure. Suppose, for example, that the reduced school atten dance occurs 12 years after lead exposure; standard practice in EPA cost calculations would then call for discounting the “savings” over 12 years, to calculate its present value. At a 3 percent discount rate, the present value is 70 percent of the reported value; at a 7 percent discount rate, the present value is 44 percent of the reported value. Using this approach to discounting

— a well

‐ established practice inEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 236 EPA analyses, used in other aspects of the ELG analysis

— would lower the value of these lost year s of education and raise the monetized benefits of the proposed steam electric ELGs.
EPA reports that the (undiscounted) savings for avoided cost of education is $979 in one study, and $1,274 in another, and then subtracts these from the present value of earnings, ignoring the discount rate. 103 In fact, assuming that those savings were correctly calculated but occur 12 years after exposure, EPA should have used present values of $685 at 3 percent or $431 at 7 percent for the first study, and $892 at 3 perc ent or $561 at 7 percent for the second study. In quantitative terms, this would cause a large percentage increase in the overall valuation of lead exposure at a 7 percent discount rate and a smaller increase at the 3 percent rate.

94 Benefit

‐ Cost Analysis, p.3

‐ 5

95 See http://yosemite.epa.gov/ee/epa/eed.nsf/pages/MortalityRiskValuation.html#whatisvsl for a discussion of the history and original o f the “value of a statistical life” measure.

96 Abt Associates, Memorandum to the Steam Electric ELG Record, “Responses to Questions regarding EPA’s Analysis of Benefits of the Proposed Steam Electric ELGs, received from Liz Stanton on August 13, 2013,” Au gust 26, 2013. Apt explains that state income was used only to predict an average national income. In this memo, Abt compares the elasticity

‐ adjusted income growth factor based on state average income, as used in the proposed steam electric ELGs, and the s ame factor based on national income. The gap between these two factors grows over time. The former is 1.04 in 2024, while the latter is 1.12. Abt does not present a national

‐ income

‐ based factor for 2025 through 2040, but does indicate that an linear extrap olation would be used for years after 2024. Using this methodology, the state

‐ based factor would be 1.09 in 2040, while the national

‐ based factor would be 1.26.

97 From U.S. Census Bureau, Current Population Survey, Annual Social and Economic Supplements, “Table H

‐ 8 Median Household Income by State: 1984 to 2011”, http://www.census.gov/hhes/www/income/data/statemedian/

98 Under these assumptions, median income would grow by a ratio of ( 1.011)30 in DC, and (0.997)30 in Kansas; the VSL would grow by [(1.011)30]0.4 and [(0.997)30]0.4, respectively. The ratio of these VSL values is 1.18.

99 Calculated from U.S. Census Bureau, 2011 American Community Survey, Table S1903, “Median Income in the Past 12 Months,” http://factfinder2.census.gov/

100 Because (1.90) 0.4 = 1.293.

101 Benefit

‐ Cost Analysis, p.3

‐ 6 to 3

‐ 11

102 Chambers, J.G., T.B. Parrish, and J.J. Harr, “What Are We Spending on Special Educat ion Services in the United States, 1999

‐ 2000?” (Special Education Expenditure Project, report toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 237 U.S. Department of Education, 2004, http://www.csef

‐ air.org/publications/seep/national/advrpt1.pdf ).

103 Benefit

‐ Cost Analysis, p.3

‐ 9
Comment Response:

The commenter discusses two main issues, addressed below.
The first issue pertains to the Agency’s adjustments to the VSL value, EPA agrees with the commenter that it would be inappropriate to value lives differentially based on income. If the documentatio n of the methodology for the proposed rule suggested this interpretation, it was not intentional and reflects an editing error rather than factual description of the methodology. The August 13, 2013 memorandum referenced by the commenter clarified the appr oach. EPA also clarified the approach in the BCA that describes the final rule analysis.
As described in Chapter 3 of the BCA, the Agency applied a single VSL estimate throughout the country in a given year. For future years, the current default VSL ($8.0 million in 2010 dollars) is adjusted based on the projected national income growth. In the final rule analysis, EPA used VSL to value benefits from avoiding cardiovascular diseases.
The second issue pertains to the Agency’s approach to value IQ points. Th e commenter states that EPA underestimates lead benefits by overestimating cost savings from education and seems to imply that avoided education is a benefit of pollution. This is an incorrect interpretation of the methodology. EPA’s methodology uses lifet ime income as a proxy for the value of an IQ point, which is in no way meant to suggest that society benefits from reduced expenditures on education. Rather than placing an actual value on an IQ point, which is not possible due to data and methodology limi tations, this analysis represents a simplified accounting framework, in which education costs and lifetime earnings serve as a proxy for the gains and losses associated with changes in IQ. EPA does not intend for these calculations to represent actual cost s and cost savings for individual, but rather to represent an approximate range of values associated with IQ points in society.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4724

- A2 Comment Excerpt Number: 3 External Review Flag: Envr Assess External Review Incorporated into Response: No
Comment Excerpt:

A.Some MCLs are set at a level that does not eliminate the risk of adverse health effects.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 238 Under the SDWA, EPA is required to conduct cost

- benefit analysis and an additional feasibility analysis when setting MCLs and other standards. 15 When setting health

- based drinking water standards, EPA first “[d]etermine[s] whether a contaminant should be regulated based on peer

reviewed s cience, including data on: how often the contaminant occurs in the environment; how humans are exposed to it; the health effects of exposure (particularly to vulnerable subpopulations).” 16 Based on this information, EPA sets a Maximum Contaminant Level G oal (MCLG), which is the level at which EPA expects no health risks. 17 MCLGs “take into account the risks of exposure for certain sensitive populations, such as infants, the elderly, and persons with compromised immune systems.” 18 Next, EPA sets an enf orceable MCL "as close to MCLGs as feasible, considering available technology and costs.” 19 Before finalizing any proposed MCL, EPA must "complete an economic analysis to determine whether the benefits of that standard justify the costs. If not, [the Ag ency] may adjust the MCL for a particular class or group of systems to a level that ‘maximizes health risk reduction benefits at a cost that is justified by the benefits." 20 Thus, an MCL may be set at a level that does not eliminate adverse health impact s, especially to vulnerable populations like children and the elderly. In the case of a known carcinogen, for example, the MCLG is always zero, but MCL’s higher than zero have been set for carcinogens in drinking water. 21

Arsenic illustrates this point. P ower plants dump nearly 80,000 pounds of arsenic into surface waters each year. Arsenic is a potent carcinogen, and has been linked to miscarriages, stillbirths, and infants with low birth weights when ingested in drinking water. 22 Arsenic can also cause cancer, including skin tumors and internal organ tumors, 23 and is also connected to heart problems, nervous system disorders, and intense stomach pain. 24 The MCLG for arsenic is zero, meaning that any amount of arsenic can cause adverse health effects. 25 EPA initially proposed that the MCL be set at 0.005 mg/l, 26 and the MCL for arsenic was finalized at 0.010 mg/l. 27 Yet any amount of arsenic presents increased health risk in water, even if that water meets federal drinking water standards.
Power plant d ischarges also contain bromide, which is difficult to remove short of evaporating wastewater to crystallize out these pollutants. “While bromide itself is not thought to be toxic at levels present in the environment,” this pollutant reacts with chemicals commonly used in wastewater treatment systems to form disinfection byproducts (DBPs), including bromate, trihalomethanes (TTHMs), and halogenated acetic acids (HAAs). 28 “Studies indicate that exposure to TTHMs and other DBPs from chlorinated water are ass ociated with human bladder cancer” and can increase risk of liver, kidney, and central nervous system problems. 29 In addition, some studies report associations with DBPs and adverse reproductive and developmental effects. 30 See “Potential Drinking Water Effects of Bromide Discharges from Coal

- Fired Electric Power Plants” for a more detailed discussion of the human health risks associated with DBPs. 31

EPA has set MCLs for bromate, TTHMs, and HAAs. 32 The MCL for bromate is 0.010 mg/l, but the MCLG is zer o. 33 The MCL for TTHMs is 0.080 mg/l, but the MCLG for specific TTHMs are zero for bromodichloromethane, zero for bromoform, 0.060 mg/l for dibromochloromethane, and 0.070 mg/l for chloroform

— all of which are below the MCL. 34 Similarly, the MCL for HAAs i s 0.060 mg/l, and the specific MCLG for specific HAAs are zero for dichloroacetic acid, 0.020 mg/l for trichloracetic acid, and 0.070 mg/l for monochloroacetic acid. 35 With theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 239 exception of the MCLG for monochloroacetic acid, all of the specific MCLGs for HAAs are below the MCL. 36 In describing how EPA set the current MCLs for DBPs, EPA states that
[d]isinfection byproducts are a special case because decreasing disinfection byproduct risk could increase risks from disease

- causing microorganisms. Eliminating or significantly decreasing disinfection to stop disinfection byproduct formation would serio usly compromise overall public health protection. The Agency’s priority is maintaining protection from disease

- causing microorganisms. However, there are a number of things that water systems can do to reduce the levels of disinfection byproducts in drinki ng water (such as decreasing the amount of disinfectant and removing as much organic material as possible prior to disinfection). 37

While this comment does not address EPA’s judgment as to the relative risks associated with DBPs in relation to the importan ce of protecting public health from disease causing microorganisms, the fact is that the MCLs for DBPs do not eliminate all adverse health effects. Any additional contamination beyond the MCLG presents some health risk. In conclusion, removal of any addit ional discharges which leads to lower concentrations of a contaminant for which the MCLG is zero or lower than the MCL has public health benefit. EPA improperly failed to account for benefits arising from reduced health risks from drinking water that is cl eaner as a result of the ELGs.

15 Drinking Water Standards.

16 Id.

17 Id.

18 Id.

19 Id.

20 Id

21 Id.

22 Agency for Toxic Substances and Disease Registry, Toxicological Profile for Arsenic 18 (2007), available at http://www.atsdr.cdc.gov/toxprofiles/tp2.pdf.

23 Id.

24 Id. at 20

- 22.

25 66 Fed. Reg. 6,976, 6,981 (Jan. 22, 2001).

26 65 Fed. Reg. 38,888 (Jun. 22, 2000).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 240 27 66 Fed. Reg. at 6,981.

28 See, e.g. , EA at 3

- 10; 78 Fed. Reg. 34,432, 34,505 (June 7, 2013).

29 EA at 3

- 10

- 3

- 11.

30 John S. Reif et al., Reproductive and Developmental Effects of Disinfection By

- Products in Drinking Water, 104 Envtl. Health Perspectives 1056 (Oct. 1996), available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1469476/pdf/envhper00341

- 0056.pdf;

31 Jeanne M. VanBriesen, Potential Drinking Water Effects of Bromide Discharges from Coal

Fired Electric Power Plants (2013).

32 U.S. Envtl. Prot. Agency, National Primary Drinking Water Regulations (EPA

- F

- 09

- 004) (May 2009), available at http://water.epa.gov /drink/contaminants/upload/mcl

- 2.pdf.

33 Id.

34 Id.

35 Id.

36 Id.

37 U.S. Envtl. Prot. Agency, Water: Stage 2 DBP Rule: Basic Information, http://wate r.epa.gov/lawsregs/rulesregs/sdwa/stage2/basicinformation.cfm#twelve (last visited Sept. 15, 2013) (emphasis added).
Comment Response:
EPA agrees that the ELGs will reduce concentrations of contaminants in discharges and ambient water, and thus have pote ntial to provide public health benefits particularly in cases where current MCLs exceed MCLGs. The commenter uses arsenic as an example of such pollutants. EPA disagrees that it has estimated benefits “improperly” by not accounting for health benefits of c onsuming drinking water that is cleaner as a result of the ELG. In developing the analysis for the ELGs, EPA looked at those categories of benefits for which data and methods could support quantification. Data on the concentrations of steam electric pollut ants in treated drinking water are not readily available to support the analysis to respond directly to the comment, nor are methods to estimate changes in pollutant concentrations post

- treatment that may result from ELG implementation. For categories of b enefits where quantification was not possible, such as the benefits of improving drinking water source quality, EPA analyzed the potential benefits qualitatively, including by describing the potential magnitude of the benefits where possible. Regarding ben efits to drinking water systems, EPA conducted a screening

- level assessment as part of its analysis of the final rule to determine the potential baseline impacts of steam electric power plant discharges on public drinking water sources. This assessment ide ntified few reaches with drinking water intakes where estimated pollutant concentrations exceeded health thresholdsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 241 in the baseline and that would improve by removing contributions from steam electric power plant discharges. This screening

- level assessment suggests that benefits to drinking water systems may not be as significant as implied by the commenter, relative to other benefits EPA analyzed.
EPA used accepted methods to estimate and monetize health benefits of ELG

- related pollutant reductions in case s where the expected change in exposure due to ELGs is quantifiable, where relevant epidemiological exposure pathways exist and are well

- supported by the literature, and where peer

- reviewed concentration

- response functions and necessary data exist to quant ify and monetize health benefits (e.g., arsenic, lead, mercury). Chapter 3 in the BCA details EPA’s analyses.
Following OMB guidance, EPA conducted qualitative health benefits analyses where quantitative analysis was not possible given the available data or methods. This inability to quantify some categories of benefits potentially leads to underestimates of the benefits of a regulation. The commenter specifically mentions benefits of reducing bromide (a DBP precursor) discharges as example of important be nefits omitted from the ELG analysis accounting. The Agency acknowledges evidence suggesting links between DBP exposure and adverse health effects (U.S. EPA, 2012), and the general potential for ELGs to reduce concentrations of DBP precursors in drinking w ater supplies. Human health and epidemiological literature remain, at this time, too incomplete and too inconclusive (e.g., Rief et al., 1996; Arbuckle et al., 2002) to support quantitative benefit assessment of potential DBP reductions (e.g., exposure pat hways and dose

- response functions). In the BCA EPA discusses the potential extent and significance of potential reductions of bromide discharges from steam electric power plants on public drinking water treatment facilities qualitatively.

As mentioned in responses to other comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4632

- A1, Excerpt Number 16), EPA acknowledges that some health benefits are not quantified due to data limitations.
For information on the role of benefits analysis in establishing effluent limitat ions based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 242 29.d. Benefits

– Water quality improvement nonuse benefits

Commenter Name: Quinlan J. Shea III Commenter Affilia tion: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 101 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Index models such as the WQ I are a well

- established method for integrating several measures of waterbody health or integrity into a single number, and are a useful means of tracking changes in waterbody health over time or assessing relative health of different waterbodies at one ti me. It is less clear, however, that the WQI provides an appropriate basis for developing an absolute dollar value of benefits. Some of the specific problematic aspects of the WQI include:

• Insufficient acknowledgement of the uncertainties of the WQI mode l, which is a model that generates a single numerical value (i.e., from 0 to 100) for a waterbody based on routine analytical data

– the WQI model is best used to relay water quality information, while unreliable for quantifying environmental damages and b enefits or for establishing regulatory criteria; and

• Lack of validation analyses in order to assess the predictive ability (and constraints) of the water quality model as compared to field

- verified observations of the influence of steam electric power ge neration wastewaters on water quality.
Comment Response:
EPA agrees with the commenter that the index models such as the WQI are a well

- established method for integrating several measures of waterbody health or integrity into a single number. The Agency recognizes that there are uncertainties inherent in its application of the WQI, as discussed in Chapter 4 of the BCA for the final rule, but EPA still considers the WQI to be the best available metric for quantifying water quality improvements resulting fr om the ELGs. EPA’s assessment is based on the particular application of the WQI to relate changes in water quality across a range of different parameters, to the public’s willingness

- to

- pay (WTP) for improvements expressed on a readily understood scale una mbiguously linked to specific water uses (e.g., recreational).
EPA also agrees with the commenter that the WQI model is useful for “relaying water quality information.” This statement is supported by evidence from the environmental benefits valuation liter ature, where similar numeric measures are often used to relay information about baseline water quality and water quality changes to survey respondents. As described in the BCA, the meta

- analysis of household WTP for water quality improvements includes 140 WTP observations from 51 primary valuation studies. The primary study observations are measures of household benefits (or damages) for water quality changes presented to survey respondents. About 31 percent of the observations used the numeric, 10

- point wa ter quality ladder (WQL)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 243 (Vaughan 1986) to communicate water quality conditions to survey respondents and to estimate willingness

- to

- pay for water quality improvements. Many other studies use descriptive metrics that define water quality categories based o n ecological and/or recreational services provided. EPA translated all water quality changes (i.e., WQL

- based and described qualitatively) to the 100

- point WQI prior to estimating the meta

- regression. EPA tested a dummy variable (WQI) that captures the eff

ect of a study using (WQI=1) or not using (WQI=0) the WQI. The variable coefficient was not statistically different from zero, indicating no systematic bias in the mapping of studies that did not use the WQI. This supports the use of the WQI as an appropri ate metric for linking water quality changes resulting from the final ELG to public values of water quality improvements reported in the published literature.
In its analysis of the final rule, EPA translated parameter concentrations estimated using existi ng water quality models (SPARROW, RSEI) to into WQI values for baseline conditions and under each of the regulatory options. EPA then used a meta

- regression that relates the baseline WQI value and WQI change resulting from each regulatory option to househo ld WTP for the degree of improvement, accounting for the characteristics of the water body, household, etc. Chapter 4 in the BCA discusses the uncertainty of the methodology.
Regarding validation of the water quality models, see DCN EPA

- HQ

- OW

- 2009

- 0819

- 465 5

- A2, Excerpt Number 24 and the case study modeling discussion in Section 8 of the Environmental Assessment for the Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527)

.

Cit ed References:
Vaughan, W.J. 1986. ―The RFF Water Quality Ladder.‖ In: Mitchell, R.C. and R.T. Carson. The Use of Contingent Valuation Data for Benefit/Cost Analysis in Water Pollution Control, Final Report. Washington: Resources for the Future. Appendix B

.

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 102 External Review Flag: No External Review External Review Incorporated into R esponse: No
Comment Excerpt:
In addition, the WQI, which was used to link the individual modeled pollutant loading and the “health” of a water body for ecological receptors and recreational use, and was the basis of monetized benefits, is a model that in troduces additional uncertainty into the assessment.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 244 Specific problematic aspects of the surface water quality analysis include:

• Insufficient acknowledgement of the uncertainties of the WQI model, which is a model that generates a single numerical value (i.e., from 0 to 100) for a waterbody based on routine analytical data. (The WQI model is best used to relay water quality information, while unreliable for quantifying environmental damages and benefits or for establishing regulatory criteria);

Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 101.

Commenter Name: Roger E. Claff Commenter Affiliation: American Petroleum Institute (API) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4641

- A1 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA Should Not Rely on Willingness

- to

- Pay Survey Results in Determining Benefits of the Proposed Rule
EPA relied upon consumer and household willingn ess

- to

- pay surveys to estimate the benefits of the proposed effluent guidelines. Yet willingness

- to

- pay surveys provide only a highly subjective and therefore arbitrary monetized measure of the value people place on environmental goods. The typical surv ey respondent is not well versed in environmental economics and is not skilled in objectively measuring environmental benefits, particularly taking a single proposed environmental benefit and placing it in the context of the myriad other economic costs and benefits with which he/she is confronted. Also, the typical survey respondent will not place this single proposed environmental benefit in the context of all other conceivably proposed environmental benefits to assess which has more value than another. Without such context, the survey respondent is likely to over

- value the single proposed environmental benefit, simply because that benefit has been placed in front of him/her. Additionally, using stated preference survey to measure "nonuse" benefits is in appropriate when EPA has not shown the affected resources to be unique or limited and the impacts to be substantial or irreversible.
API refers EPA to API, the Utility Water Act Group, and the Cooling Water Intake Structure Coalition comments submitted in response to EPA's proposed cooling water intake structure rule (EPA Docket No. EPA

- HQ

- OW

- 2008

- 0667). These comments provide detailed assessments of the technical inadequacies of willingness

- to

- pay surveys in objectively measuring the benefits of a propos ed rule.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 245 Comment Response:
EPA disagrees and notes that the comment is inconsistent with accepted findings and approaches in benefit

- cost analysis. EPA recognizes that there has been controversy over the use of stated preference valuation methods. Howeve r, a recent evaluation of this controversy by Kling et al. (2012, p. 23), concludes that “that the last 20 years of research have shown that some carefully constructed number based on stated preference analysis is now likely to be more useful than no numbe r [for] cost

– benefit analysis.” Stated preference methods have “... been tested and validated through years of research and are widely accepted by federal, state, and local government agencies and the U.S. courts as reliable techniques for estimating nonmar ket values” (Bergstrom and Ready 2009, p. 26;)
There are no theoretical necessary conditions for the existence of nonuse values. For example, resources do not have to be unique to be the source of nonuse WTP. This is demonstrated by the primary studies tha t make up the meta

- data EPA used to relate water quality improvements to WTP. Many of the primary studies estimate total WTP values (use plus nonuse) for resources similar to those affected under the final ELGs. While EPA recognizes the possibility of low non

use values, significant non

- use values are also possible. EPA notes that when a substantial fraction of the population holds even small per capita nonuse values, these nonuse values can be very large in the aggregate. As stated by Freeman (2003, p. 138 ), "If nonuse values are large, ignoring them in natural resource policymaking could lead to serious errors and resource misallocations." Office of Management and Budget (OMB) Circular A

- 4, governing regulatory analysis, support the need to assess nonuse values (U.S. OMB 2003). Also, see DCN EPA

- HQ

OW

- 2009

- 0819

- 4655, Excerpt Number 233.
EPA agrees with the commenter’s statement that “the typical survey respondent is not well versed in environmental economics,” but notes that if a stated preference survey i s well designed, proficiency in environmental economics is not needed to provide informed and valid results. The Agency took care to identify studies that use accepted stated preference methods. Each primary study is based on a population sample within whi ch respondent proximity and familiarity within the resource varies. The information provided in each primary study’s survey varies across the meta

- data due to factors including, but not limited to, survey methodology, the characteristics of the affected re source and sampled area, and the magnitude, nature, and source of the water quality changes.
The expansive stated preference literature clearly supports the use of meta

- analysis benefit transfer to estimate WTP for water quality improvements. The Agency re cognizes the commenter’s perspectives on the validity of stated preference methods, but notes that this is just one perspective. Stated preference approaches and benefit transfer based on stated preference studies have now been applied in numerous cases to value nonmarket environmental resources and related policy changes in various contexts (including damage assessments). Official guidance documents (e.g., OMB’s Circular A

- 4; U.S

. EPA 2010 ) and the Blue Ribbon Panel (Arrow et al. 1993)

— while explicitly rec ognizing the controversies and challenges

— both consider stated preference methods to be a valid source of information. Moreover, OMB’s Circular A

- 4 also notes that “stated

- preference study may be the only way to obtain quantitative information about non

- us e values”.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 246 Cited References:
Arrow, K. , R. Solow, E. Leamer, P. Portney, R. Rander, and H. Schuman. 1993. Report of the NOAA Panel on Contingent Valuation, Federal Register 58 (Jan.): 4602

- 4614.
Bergstrom, J.C. , and R.C. Ready. 2009. What Have We Learned from Over 20 Years of Farmland Amenity Valuation Research in North America? Review of Agricultural Economics, 31(1): 21

- 49.
Kling, C.L., D.J. Phaneuf and J. Zhao. 2012. From Exxon to BP: Has Some Number Become Better than No Number? Journal of Economic P erspectives 26(4): 3

- 26.
U.S. EPA. 2010. Guidelines for Preparing Economic Analyses. EPA 240

- R

- 10

- 001. U.S. EPA, Office o f the Administrator, Washington D

. C

. December 2010 (updated May 2014).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams C ommenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 201 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Index models such as the WQI are a well

- e stablished method for integrating several measures of waterbody health or integrity into a single number, and are a useful means of tracking changes in waterbody health over time or assessing relative health of different waterbodies at one time. It is les s clear, however, that the WQI provides an appropriate basis for developing an absolute dollar value of benefits. Some of the specific problematic aspects of the WQI include:

 insufficient acknowledgement of the uncertainties of the WQI model, which is a model that generates a single numerical value ( i.e., from 0 to 100) for a waterbody based on routine analytical data

– the WQI model is best used to relay water quality information, while unreliable for quantifying environmental damages and benefits or for establishing regulatory criteria; and

 lack of validation analyses in order to assess the predictive ability (and constraints) of the water quality model as compared to field

- verified observations of the influence of steam electric power generation wastewa ters on water quality.
Comment Response:
Refer to response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 101.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 247 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 233 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

I. EPA Should Not Rely on Willingness

- to

- Pay Surveys
In its BCA (p. 1

- 2) EPA says “[s]everal categories of benefits presented in this report are estimated based on consumer or household willingness

- to

- pay (WTP) surveys, such as WTP for surface water quality improvements applied in this BCA for monetizing ecological benefits of the proposed ELGs.” As EPA knows, willingn ess

- to

- pay surveys to measure subjective values that people assign to environmental goods have been controversial, especially in the rulemakings for cooling water intake structures under § 316(b) of the Clean Water Act.
UWAG comments now, as it has in past rulemakings, that using a stated preference survey to measure “nonuse” benefits is inappropriate where, as here, the Agency has not shown indicator resources ( e.g. , water clarity and blue crab) to be unique or limited and the impacts to be substantial or irreversible. See Attachment 24, Comments on EPA’s Notice of Data Availability for § 316(b) Stated Preference Survey, prepared by NERA Economic Consulting for UWAG (NERA Report), July 2012, pp. E

- 10, 7 (citing Freeman, A. Myrick III. 2003. The Measurement of Environmental and Resource Values: Theory and Methods. 2nd ed. Washington, DC: Resources for the Future).
Comment Response:
Refer to response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4641

- A1, Excerpt Number 4 regarding controversy related to stated preference appr oaches.
The commenter’s reference to a “uniqueness” criterion is misguided. Evidence from the environmental economics literature indicates that households may have material nonuse willingness

- to

- pay for relatively common ecological services and resource im provements, which would not be considered unique by the commenter. UWAG cites Freeman (2003)[1] in its assessment of the likely significance of nonuse values, interpreting Freeman (2003) as suggesting that nonuse values are unlikely unless: (1) the resourc e is unique and (2) the loss would be irreversible or subject to a long recovery period.
The commenter’s assertion reflects an ad hoc interpretation of Freeman (2003)’s discussion of nonuse values. Freeman (2003) goes on to state that “at the present time there is no general method for determining whether a resource is sufficiently unique or a resource change is of sufficient duration to generate important nonuse values” (p. 157). Bateman et al. (2002)[2]Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 248 advises against the use of ad hoc, expert assumption s regarding the magnitude of nonuse values

– particularly assuming that nonuse values are trivial

– stating that “it would be wrong for experts to assume that one resource is a perfectly good substitute for another” (p. 75), and consequently to assume that nonuse values are trivial, because values concerning the quality of substitutes are inherently subjective. Freeman also states that in economic terms “uniqueness would be reflected in the absence of substitutes and low price elasticity of demand...but there is no threshold on price elasticity that distinguishes between the presence or absence of close substitutes” (p. 157).

[1] Freeman, A.M., III. 2003. The Measurement of Environmental and Resource Values: Theory and Methods. Washington, DC: Resources for the Future.
[2] Bateman, I.J., R.T. Carson, B. Day, M. Hanemann, N. Hanley, T. Hett, M. Jones

- Leee, G. Loomes, S. Mourato, E. Ozdemiroglu, D.W. Pierce, R. Sugden, and J. Swanson. 2002. Economic Valuation with Stated Preference Surveys: A Manual. Northampt on, MA: Edward Elgar.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 24 External Review Flag: No External Review External Review Incorp orated into Response: No
Comment Excerpt:
There are several uncertainties in the WQI which have not been identified by US EPA nor has their effect on the model results been evaluated.

 Despite being the only water quality analysis to be monetized in suppo rt of the proposed ELG, US EPA provides substantially less documentation regarding how the analysis was performed than for the other water quality evaluations. For example, US EPA (2013d, pg. 4

- 5) cites to an evaluation performed for the construction and d evelopment point source category for information on how the SPARROW model was applied. This may be an efficient way to describe the general procedures, but does not provide specifics of the application of SPARROW model to the steam electric power plant poi nt source category. For the RSEI model, US EPA (2013d) does not cite to any supporting documentation beyond the RSEI model description. The level of documentation provided for these significant modeling efforts is not adequate to support a reasonable under standing of how the modeling was performed, nor is it adequate to support reasonable opportunity to offer comment. For example, there is a lack of documentation on the assumptions regarding water hardness. US EPA's AWQC for several metals (cadmium, chromiu m, lead, nickel, zinc) are dependent on water hardness, which is a highly site

- specific water quality parameter. The process to adjust the WQI for receiving

- water specific hardness isEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 249 presently unspecified, and therefore unknown whether the WQI is providin g accurate predictions for the metals sub

- index.

 US EPA adapted the WQI from multiple sources (Cude, 2001; CCME, 2001 Carruthers and Wazniak, 2005, each of which report limitations that have not been addressed in the ELG rule. CCME (2001) note that the WQI , "is not intended to replace a detailed analysis of environmental monitoring data, nor should it be used as the only tool for management of water bodies." Further disadvantages include, "the loss of information on single variables, the sensitivity of the results to the formulation of the index, the loss of information on interactions between variables, and the lack of portability of the index to different ecosystem types." Cude (2001) also reported that the WQI, "was designed for Oregon's streams, and its application to other geographic regions or waterbody types should be approached with caution." In the current ELG rule, none of these uncertainties have been addressed quantitatively nor has a validation study been conducted to evaluate the predictability of the WQI for use at a national scale. For instance, US EPA could have evaluated environmental monitoring data from case studies mentioned in the EA to evaluate the accuracy of the predicted WQI results. This could provide a more detailed analysis (as sug gested by CCME) to calibrate the WQI model. US EPA should provide a demonstration that results of the WQI are predictive (with uncertainty bounds) of real

world effects on water quality. Without this type of analysis we cannot ascertain whether the environ mental or monetary benefits are reliable.

 US EPA's contractor acknowledged that portions of the WQM (SPARROW and RSEI) have limitations (e.g., simple algorithm to model fate and transport) and that the models provide "screening

- level" insight into the pote ntial downstream effects of the ELGs (Abt Associates, 2013). A screening level

- approach (as used in the WQI and in other areas of the EA) is generally useful for removing parameters that are unlikely to present a risk and identifying those that require fur ther study. The WQI is inherently a screening

- level model and the other agencies have explicitly (see CCME above) suggested that detailed environmental modeling (i.e., including assessments of both exposure and health effects) should be conducted in additi on to the use of this model. US EPA should acknowledge throughout the ELG rule that the approaches undertaken are "screening

- level" and that they may not accurately predict environmental damage or benefit.

In addition to the issues noted above, all the is sues described for the pollutant loadings analysis (WQM) would affect the WQI model analysis.
Comment Response:
The commenter raises several issues related to the use of the Water Quality Index (WQI) in valuing water quality improvements. EPA addresses the se issues below, expanding on the response to related comments (e.g., see DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number Number 101).
First, the commenter notes the sparse description of the modeling approaches that provide inputs to the WQI calculations. For the final rule analysis, EPA expanded the discussion of these models to describe how they were used to estimate changes in ambient water pollutant concentrations. See Appendix D in the BCA for the final rule. Regarding water hardness, EPAEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 250 compared the dissolved concentrations (based on the average dissolved/total fraction of modeled total concentration) to the ambient aquatic life water quality criteria provided for nominal hardness levels of 100 mg/L.

Second, the commenter notes the limited discussion of the uncertainty of the WQI approach, as adapted from original sources. As discussed in Chapter 4 of the BCA, EPA modified the WQI originally developed by McClelland to incorporate two main improvements: 1) regionally specific subindex curves that refle ct differences in natural conditions present in these waterbodies, and 2) addition of a subindex for metals that accounts for exceedances of established water quality criteria. EPA carefully considered the changes in light of the limitations and uncertaint y noted by the original sources.
For the regionally specific subindex curves, EPA notes that it did not adopt the values developed by Cude directly, but instead used the approach developed by Cude to determine the values specific to different ecoregions across the country. This approach improves on the index developed by McClelland by recognizing that different, and possibly relatively high, levels of nutrient and sediment can occ ur naturally even under undisturbed conditions. In the unmodified McClelland index, such locations may be assigned very low WQI values due to naturally high sediment concentrations, even though they support expected uses of the waters. Conversely, the

unmo dified McClelland index may yield high WQI values in regions with naturally low nutrient levels, even for locations comparatively impacted by excess nutrients. EPA thus used the approach developed by Cude to develop region

- specific scales that tie to the d istribution of values in the underlying data, assuming that the cleanest waters within the underlying data represent reference, unaffected waters (based on the 25 th percentile of the distribution). This approach is consistent with the use of inference meth ods for deriving numeric criteria (e.g., U.S. EPA, 2000a; U.S. EPA, 2000b).
Regarding the CCME

- inspired subindex, EPA similarly notes that it used the methodology developed by CCME and not the actual scoring scale. The original index developed by McClellan d includes a parameter for toxics as an overall modifier to the score calculated based on the other parameters. Thus, under the original McClelland index, any exceedance of a water quality criterion for toxic pollutants restates the WQI value to zero. This makes the original index somewhat insensitive to improvements in concentrations of non

- toxic parameters and overly sensitive to very small changes when they affect values close to the threshold. EPA deemed the CCME

- based approach superior as it provides a finer gradation of effects as waterbody exceedances are addressed for the same set of modeled parameters. EPA conducted sensitivity analyses using alternate definitions of the WQI and determined that the WQI formulation used in the main analysis provided the optimal balance between being sensitive to change in toxic parameters while minimizing eclipsing of other water quality indicators.
Third, the commenter requested more details on the validity of the WQI at the national scale. As part of the final rule analysis, EPA confirmed that the WQI provides valid indication of overall water quality by comparing the baseline WQI scores (without the ELG loading reductions) against historical water quality assessment data for the same waterbodies. The comparison show s statistically significant differences in the WQI score obtained for those waterbodies assessed as impaired (i.e., poor water quality) and those assessed as meeting designated uses (i.e., goodEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 251 water quality). This comparison lends support to the index as a reasonable indicator of existing water quality. EPA recognizes that this comparison only addresses the validity of the index for existing conditions and does not provide separate confirmation that the changes calculated based on the index formula predict the “real

- world” overall changes in water quality. The estimated changes in the WQI resulting from the ELGs are, however, consistent with modeled changes in concentrations.
Finally, the commenter notes that the WQI model is by definition a screening

- level approach and suggests that modeling be undertaken to better characterize water quality changes that may result from the ELGs. The values EPA uses to calculate the WQI came f rom modeling the fate and transport of pollutants discharged by steam electric power plants. While EPA acknowledges that these models necessarily use simplifying assumptions given the national scope of the analysis, EPA used appropriate modeling approaches given data limitations. For the final rule analysis, EPA also conducted analyses using the same national models used at proposal (which use a more detailed partitioning algorithm to estimate water column concentrations of toxic pollutants), as well as exp anded the analysis to also look at specific case study locations using models that incorporate a more comprehensive representation of environmental fate of the modeled pollutants. In general, the detailed case study models support the overall conclusions o f the national

- level model in corresponding water bodies, and where there are differences between the case study and national models, the case study model shows more severe impacts in small receiving waters with highly variable flow rates. The case study m odel also shows that the impacts from the steam electric power plant discharge may propagate farther downstream than the directly receiving waterbody in the scope of the national model. See Chapter 8 of the Environmental Assessment for the Effluent Limitat ions Guidelines and Standards for the Steam Electric Power Generating Point Source Category (EA Report) (DCN SE04527) for details.
EPA refers to its response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 101, on the specific application of the WQI to support monetization of the water quality improvements.

U.S. EPA. 2000a. Nutrient Criteria Technical Guidance Manual: Lakes and Reservoirs. EPA

822

- B

- 00

- 001. April 2000.

U.S. EPA. 2000b. Nutrient Criteria Technical Guidance Manual: Rivers and Streams. EPA

- 822

- B

- 00

- 002. July 2000.

Commenter Name: Jerry Schwartz Commenter Affiliation: American Forest & Paper Association (AF&PA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4656

- A2 Comment Excerpt Number: 7 External Review Flag: No External Review Extern al Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 252 Of equal concern is the use of Willingness

- to

- Pay surveys to increase the benefits of the Proposal. AF&PA previously joined UWAG and other parties in filing a detailed critique of such surveys in another EPA rulemaking.
Comment Response:
Refer to response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4641

- A1, Excerpt Number 4.

Commenter Name: Amy Trojecki Commenter Affiliation: Exelon Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4662

- A2 Comment Exc erpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

 EPA should abandon use of stated preference surveys, willingness

- to

- pay estimates and similarly unreliable techniques to assess value of non

- use benefits.
Comment Response:
Refer to response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4641

- A1, Excerpt Number 4.

Commenter Name: Amy Trojecki Commenter Affiliation: Exelon Corporation Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4662

- A2 Comment Excer pt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

IV. EPA Should Not Rely on Stated Preference Surveys and Similar Unreliable Studies to Estimate Benefits
Exelon objects to EPA’s use of stated preference surveys, willingness

- to

- pay estimates and similarly unreliable tools for assessing the value of non

- use benefits. This concern is amplified here, where EPA’s assessment of non

- use values is based on “meta

- an alysis” of many such unreliable inputs, as described in the benefit cost analysis performed in connection with the proposed Rule. See EPA , Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category , EPAEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 253 821

- R

- 13

- 004 (April 2013), EPA

- HQ

- OW

- 2009

- 0819

- 2238 (“ELG BCA”) at Appx. E. While robust stated preference surveys can provide useful directional value signals concerning specific types of resources ( e.g ., endangered or threatened species or unique natural resources) in specific areas, such studies are of little value in assessing the benefits of a rule of national scope, like the ELGs, which will necessarily apply in cases where those specific high

value resources are absent. Under the ELG program, EPA cannot justify imposing obligations on all sources in this category by pointing to benefits that will occur, if at all, at only a small subset of sources in the category.
In the proposed Rule, EPA compounds its error by aggregating the results of 45 studies over three decades in a “meta

- analysis.” Id . at E.1.2. These studies used different methodologies and assessed different types of environmental impacts in different areas of the country. Most of these studies assessed only the perceived value of improvements to “general water quality”

– at best a vague environmental benefit unmoored from specific objective such as the protection of endangered species. Indeed, only a handful of the studies included in EPA’s meta

- analysi s relate to “wildlife habitat.” While the goal of EPA’s meta

- analysis is to derive useful observations from a group of unrelated, differently configured studies, the very nature of this synthesis further compromises the utility of the result. Even if eac h of the 45 studies was individually sound, and reached reliable conclusions with respect to the value of the resources evaluated, the strength of these individual findings is so diluted through the meta

- analysis as to be useless, particularly as applied t o a national standard. Therefore, Exelon comments that EPA should abandon use of stated preference surveys, willingness

- to

- pay estimates and similar techniques, with or without meta

- analysis, to monetize non

- use values, and should not base its benefit cost analysis for any national rulemaking on such unreliable data.
Comment Response:
EPA disagrees with the commenter that the Agency should abandon its use of stated preference studies and meta

- analyses for estimating benefits of water quality improvements resulting from the final ELG. Refer to response to comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4641

- A1, Excerpt Number 4 regarding the reliability of stated preference approaches in general and refer to response to comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 233, regarding values for “non

- unique” resources, that is, values for resources that the commenter would not consider to be “high value” a priori

. For the final rule, EPA used a revised meta

- regression to estimate water quality benefits for the final ELGs. This meta

- regression is based on 140 willingness

- to

- pay observations from 51 primary valuation studies. EPA disagrees with the commenter’s assessment of the primary study values as “vague environmental benefit unmoored from specific objective.” On the con trary, the primary studies often provide detailed information regarding the environmental improvement and any recreational improvements that occur under the valuation scenario. Furthermore, while the primary studies were conducted independently, EPA does n ot consider them to be “unrelated.” As discussed in Chapter 4 of the BCA for the final rule, EPA followed specific criteria in determining whether studies should be included in the metadata, including commodity consistency (i.e., studies must value water q uality changes) and welfare consistency (i.e., studies must use general accepted stated preference approaches and report theoretically comparableEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 254 Hicksian welfare measures). EPA recognizes that primary studies are “differently configured” (i.e., use diffe rent stated preferences methodologies or payment vehicles). The systematic effects of differences in studies’ methodology, sampled populations, affected resources, and water quality on willingness

- to

- pay are captured by explanatory variables in the meta

- re gression. See Chapter 4 of the BCA for detail on the revised meta

- regression model used in EPA’s analysis of water quality benefits for the final ELGs. EPA also disagrees with the assertion that using a meta

- analysis compounds the error of relying on state d preference results. The meta

- analysis allows EPA to project, based on a comparison to the existing literature, the results that could be obtained had EPA conducted a stated preference survey tailored to the ELGs.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 39 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Improved aquatic and wildlife ha bitat from improved ambient water quality in receiving reaches; enhanced swimming, fishing, boating, and near

‐ water activities from improved water quality; increased aesthetics from improved water clarity, color, odor, including nearby site amenities (resi ding, working, traveling); enhanced existence, option, and bequest values from improved ecosystem health; reduced risks to aquatic life from exposure to steam electric pollutants; and improved threatened and endangered habitat and thus potential increase in threatened and endangered population: Several assumptions made by EPA regarding the value of water quality result in an underestimation of the value of improved ambient water quality in receiving reaches. The value of these benefits depends on how much water quality is expected to improve under each regulatory option. EPA notes that their measure of water quality accounts for metal and nutrient concentrations but does “not include improvements in water quality indicators associated with other pollutant l oadings (e.g., BOD, dissolved oxygen), nor does it consider improvements in other water quality variables such as TSS. Omitting some water quality parameters from the analysis is likely to result in underestimation of the expected water quality changes.” 83

83 Benefit

‐ Cost Analysis, p.4

‐ 20, Table 4

‐ 14
Comment Response:
For the final ELGs, EPA has revised its analysis to include changes in TSS based on SPARROW. See Chapter 4 of the BCA for the final rule for additional discussion of EPA’s analysis of metals , nutrients, and TSS. EPA did not estimate changes in BOD and dissolved oxygen under the final ELGs. EPA agrees within the commenter that to the extent that these parameters would also improve under the Steam Electric ELG, omitting BOD and dissolvedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 255 oxygen from the analysis results in underestimation of the expected water quality changes and, as a result, the monetary value of benefits of water quality improvements resulting from the final ELGs.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthju stice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 43 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Willingness to pay for improved water quality

EPA uses a willingness

‐ to

‐ pay methodology to monetize the value that society places on water quality, other than for its direct use: for example, the value of the existence of good water quality (even if the water is not used by society); the value of having t he option to use that clean water in the future; and the value of being able to pass clean water down to future generations. EPA’s

non ‐ use value for improved water quality is derived from “willingness

‐ to

‐ pay” surveys that ask respondents to assign a value to a social or environmental good.
EPA concludes that their attempt to determine society’s willingness

‐ to

‐ pay for improved water quality in the proposed steam electric ELGs is likely an underestimation and that “[t]he estimation of [willingness

‐ to

‐ pay] ma y be sensitive to differences in the environmental water quality measures across studies in the meta data.” 92

Once determined from survey results, individual willingness to pay is extrapolated to the affected population. EPA assumes that households will only value improvements of nearby water bodies, further underestimating the value of increased water quality. “Residents of other states may hold values for water resources outside of their home state, in particular if such resources have personal, regiona l, or national significance. Even if per household [willingness

‐ to

‐ pay] for out

‐ of

‐ state residents are small they can be very large in the aggregate if these values are held by a substantial fraction of the population.” 93 Correcting these assumptions would increase the water quality benefits from the proposed ELGs.

92 Benefit

‐ Cost Analysis, p.4

‐ 19, Table 4

‐ 14.

93 Benefit

‐ Cost Analysis, p.4

‐ 19, Table 4

‐ 14.
Comment Response:
EPA agrees with the commenter that some assumptions used in the analysis of total w illingness to pay (WTP) for water quality improvements may lead to underestimation of total benefits ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 256 the ELG. The Agency notes that it revised its analysis of water quality improvement benefits to address a variety of limitations, including those noted by the commenter. First, the Agency revised the water quality meta

- regression function that was used to estimate household willingness

- to

- pay for water quality improvements for the proposed ELGs to better reflect geospatial characteristics of the waterbodi es affected by the final ELG, presence of substitute sites, and the extent of the market for water quality improvements. The revised meta

- regression is discussed in Chapter 4 and Appendix H of the BCA for the final ELGs.

EPA also revised its benefit transf er approach for applying the meta

- regression to water quality improvements under the ELGs. As discussed in Chapter 4 of the BCA for the final ELGs, the benefit transfer approach for the final ELGs uses Census block groups as the geographic unit of analysis , assuming that households in each Census block group value changes in the affected waterbodies not just within the Census block group area, but within a 100

- mile distance from the center of the block group. EPA notes that the area corresponding to the 100

- mile radius is consistent with the typical study area (i.e., extent of the market) used in the original studies included in the meta

- analysis. Although households may hold values for water quality improvements outside of the 100

- mile radius these values a re likely to be very small for non

iconic waterbodies given the estimated small changes in water quality resulting from the final ELG, a large number of substitute sites, and distance decay factors associated with willingness to pay for water quality chang es (e.g., Bateman et al. 2006,; Schaafsma et. al. 2013).

Cited Literature:
Bateman Ian J., Day Brett H., Georgiou Stavros, Lake Iain R. 2006. “The Aggregation of Environmental Benefit Values: Welfare Measures, Distance Decay and Total WTP.” Ecological Econ omics 60 (2): 450

– 60.

Schaafsma, M., R. Brouwer, A. Gilbert, J. van den Bergh, and A. Wagtendonk. 2014 “Estimation of Distance

- Decay Functions to Account for Substitution and Spatial Heterogeneity in Stated Preference Research”. Land Economics, 2013 vol . 89 no. 3 514

- 537Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 257 29.e. Benefits

– E&T species benefits

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 96 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
In my class, Environment, Technology, and Economy, my students become well versed in the effects of heavy metals emitted by coal plants on our local industries that depend on the Bay. For crabbers, oystermen, and the Vitamin E industry dependent on the Menhaden fish, these industries are incredibly vulnerable to pollution and have all been suffering, especially the Vitamin E industry affected by heavy metals that bio accumulate in the fish.
I am personally concerned about business because after I leave the university, I intend on starting my own as a farmer and chef. With a degree in conservation biology, I intend to be extremely choosy as a find a place that is right for me and where I can offer products where I can account for every ingredient in them.
Current effluent water standards will drive young entrepreneurs such as me away from locations where business could be affected. I am concerned about coal fired power plant effluent because of the effects of the metals emitted.
Comment Response:
As described in the BCA, the final rule will reduce discharges of pollutants by coal fired power plants about which the commenter is concerned, thereby improving surface water quality and reducing metal pollutant concentrations in fish tissue. These reductions have a range of human health and ecological benefits described in the BCA.

Commenter Name: Ernest Lehmann Commenter Affiliation: Private Citizen Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A16 Comment Excerpt Number: 5 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Today, the greatest threats to the survival of the shortnose sturgeon include, a mong other things, power plant construction and operation, and pollutant and thermal discharges. ld. at 116.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 258 Indeed, NMFS has concluded that electric power generating plants are a significant threat to the species and contribute to the species' declin e. /d. at 117. Of particular concern is the impact that electric power generating plants' cooling water intake structures have on sturgeon through impingement and entrainment of larval and young juvenile sturgeon, when the fish are small and poor sw immers. !d. As NMFS explained in the Recovery Plan for the shortnose sturgeon,
Shortnose sturgeon are susceptible to impingement on cooling water intake screens. Electric power and nuclear power generating plants can affect sturgeon by impinging larger fish on cooling water intake screens and entraining larval fish.
Recovery Plan at 53. Numerous observations in laboratories have demonstrated that larvae and young juveniles cannot escape flow rates as low as 0.25 feet per second. See Kynard Dec!. at 1 17. Moreover, because sturgeon are relatively slow growing and exist in a vulnerable larval and young juvenile stage for 10

- 12 months, sturgeon and sturgeon populations are particularly susceptible to adverse impacts from impingement and entrainment. Th e take of young sturgeon can have magnified impacts on sturgeon populations. This is because sturgeon are slow maturating, they do not spawn every year, and the species is already critically imperiled. See id.
Comment Response:
EPA appreciates concerns regarding the impacts of cooling water intake structures (CWIS) on shortnose sturgeon and other protected species, but the Agency notes that the ELG regulation is intended to strengthen the existing controls on pollutant discharges from steam electric pow er plants by revising technology

- based effluent limitations guidelines and standards.
Section 316(b) of the Clean Water Act requires EPA to issue regulations on the design and operation of intake structures, in order to minimize adverse environmental impac ts. EPA promulgated regulations in 2001, 2003, 2006 and 2014. Thus, this comment is outside the scope of the steam electric ELG. However, changes in wastewater processes at the plants will reduce surface water withdrawals from steam electric power plants, which will in turn reduce the impingement and entrainment mortality threats which the commenter discusses. EPA discusses these benefits qualitatively in Chapter 8 of the BCA for the final rule. EPA also analyzed potential benefits to endangered and threate ned species, including sturgeons, from improvements in water quality resulting from the final rule. This analysis is detailed in Chapter 5 of the BCA.

Commenter Name: Ernest Lehmann Commenter Affiliation: Private Citizen Document Control Number: EPA

- H Q

- OW

- 2009

- 0819

- 3920

- A16 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 259 The Shortnose Sturgeon In The Potomac
NMFS has recognized 19 distinct population segments of shortnose sturgeon. Shortnose sturgeon populations consist of two clusters: a northern cluster of population segments (spanning from New Brunswick to the Hudson River) and a southern cluster of population segments (spanning from Cape Fear in South Carolin a down through Georgia). Accordingly, there is a gap in the middle of the species range that is only filled by the Delaware River population (in Pennsylvania) and the Chesapeake population. /d. at 'l[ 9; see also Recovery Plan at 2, 12. As NMFS has conc luded, the " loss of a single shortnose sturgeon population segment may risk the permanent loss of unique genetic information that is critical to the survival and recovery of the species. " Recovery Plan at 7 (emphasis added).
The Chesapeake population, h owever, is of particularly critical importance to the long term survival of the species. This is because, as NMFS itself has concluded, it is highly important to

" re

- establish minimal gene flow " between the northern and southern populations. and doing so requires "restoring the historically continuous range of the species." /d. at 5 (emphasis added). The Chesapeake population

- situated as it is in the center of the gap between the northern and southern sturgeon populations

- is the population that must p rovide that cmcial genetiC"!ink between the otherwise isolated northern and southern populations. See Kynard Decl. at 19. Accordingly, the health of the Chesapeake population is critical to the health and viability of the species as a whole.

The Potomac sturgeon, in turn. is the key to fulfilling the role of the Chesapeake population in linking northern and southern populations. This is because the Potomac River is the only river in the Chesapeake population range where a permanent presence of adults ye ar round has been documented. See Kynard Dec!. at !d. at !d. Indeed, aJI other instances of sturgeon in the Chesapeake population have been limited to sturgeon that were found in the Chesapeake itself and at the mouths of rivers. See Recovery Plan at 1 9. As such, "adverse impacts to the Potomac shortnose sturgeon are of grave concern to, and may well have adverse impacts on. the long term survival of the species. '' Kynard Decl. at 31 (emphasis added).
In the recent past, at least eight shortnose stur geon have been caught in fishing gear in the Potomac. See USGS ·'Status of Shortnose Sturgeon in the Potomac River" Part I

- Field Studies, attached hereto as Exhibit No. 22 (hereinafter "Kynard/FWS Field Study") at 3

- 4. From March 2004 to July 2007, the National Park Service and the Fish and Wildlife Service commissioned a Field Study of the shortnose sturgeon in the Potomac, performed by Professor Boyd Kynard. !d. at 4. The Kynard/FWS Field Study, as well a<; other catch reports of the shortnose stur geon in the Potomac, indicates that the shortnose sturgeon is a permanent resident of the Potomac River. Kynard Decl. at 1[27. Adults are returning year after year to an area within approximately nine miles of the Plant with spawning habitat in an attemp t to spawn. !d. at 1[26.
As noted above, NMFS itself has previously concluded that the nine miles or so immediately below spawning grounds are where larval and young juvenile shortnose sturgeon reside for the most vulnerable first 10

- 12 months of life, wh ile they grow large enough to move further downstream into more saline waters. See Ex. 21, September 21,2006 Correspondence between Julie Crocker and Karen M. Greene. It is therefore inevitable that the Potomac Plant will likelyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 260 injure and kill young sho rtnose sturgeon through entrainment and impingement, particularly at the larval and young juvenile life stages. Kynard Decl. at 1[28. For the reasons discussed above, the impact of such take is of great concern to the Potomac sturgeon generally given the slow maturation of the shortnose sturgeon, the fact that they do not spawn every year, and the imperiled status of the fish, and moreover the take of Potomac River sturgeon raises "grave concern[]" for the viability of the species as a whole. !d. at TJ[l7 , 31.
Comment Response:
Refer to response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A16, Excerpt Number 5.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 40 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s quantification of improved ecosystem health; reduced risks to aquatic life from exposure to steam electric pollutants; and improved threatene d and endangered species habitat and thus potential increase in threatened and endangered population is based on a series of assumptions that ultimately result in an underestimation. First, EPA notes, “[t]he databases used to estimate benefits to [threate ned and endangered] species exclude all species considered threatened or endangered by scientific organizations but not protected by the [Endangered Species Act]. The magnitude of the underestimate is likely to be significant.” 84 Moreover, “EPA excluded al l species with low and moderate vulnerability potentials based upon life history traits. For all species with high potential vulnerability, EPA conducted further analyses to identify those species likely to be affected by the proposed ELGs, rather than all species whose life histories make them vulnerable.” 85 EPA further reduces the pool of threatened and endangered species included in its benefits calculations. EPA’s meta

‐ regression analysis includes only benefits of threatened and endangered freshwater fi sh; other types of animals are either valued at zero dollars or excluded from any mention. 86 EPA illustrates the scale of the impact of its incomplete analysis using the example of one species of insect, the Hine’s Emerald Dragonfly:
It is likely that population increases in [the Hine’s Emerald Dragonfly] have value to the public. In addition to bequest, altruistic, and existence values, dragonflies may have aesthetic or cultural values. Dragonflies also provide beneficial ecological services. They are voracious insectivores that prey on mosquitoes, flies, and other small insects. The estimated annual benefits of pest control attributable to insects are $4.5 billion in the United States... 87

While the EPA is able to estimate a monetary value for the benefits of endangered species, they do so by limiting their analysis to a sub

‐ set of the affected species. Some of these species have anEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 261 obvious value to the public, including the Hine’s Emerald Dragonfly, which contributes to the $4.5 billion of annual b enefits associated with pest control in the United States. EPA’s methodology omits this value.

84 Benefit

‐ Cost Analysis, p.5

‐ 11 Table 5

‐ 7.

85 Benefit

‐ Cost Analysis, p.5

‐ 11, Table 5

‐ 7.

86 Benefit

‐ Cost Analysis, p.5

‐ 6, Table 5

‐ 4.

87 Benefit

‐ Cost Analysis, p. 5

‐ 11, Table 5

‐ 7.
Comment Response:
EPA agrees with the commenter that benefits to threatened and endangered species (T&E) are likely underestimated given limitations in data, information and tools for estimating T&E benefits, but EPA disagrees that the s cope of the analysis for the final rule was too narrow. EPA structured the scope of its T&E species benefit analysis for consistency with existing legal frameworks. Thus, EPA focused on ESA

- listed species because steam electric power plant NPDES permits in corporate consideration of impacts to ESA

- listed species. For this reason, EPA did not examine benefits to species which scientific organizations consider threatened or endangered, but which the ESA does not protect. Regarding the exclusion of species with moderate or low vulnerability to changes in water quality, EPA recognizes that water quality issues may be important to species recovery even if not listed explicitly in species recovery plans, but given the uncertainty and data limitations, determined th at it was reasonable to focus the benefit analysis on those species more likely to be affected by steam electric power plant discharges.
The Agency used the best monetization approach available to estimate benefits to T&E species from water quality improve ments. This approach relies on a meta

- regression valuation function that allows valuation of increased protection of freshwater fish, marine mammal, and bird T&E species. For the final rule, EPA estimated benefits to two fish species (Vermilion darter and Etowah darter). Lack of valuation studies prevented EPA from monetizing expected benefits of the final rule to amphibians (e.g., Hellbender salamander) in four states. EPA discussed these benefits qualitatively in the final rule analyses (see Chapter 5 in BCA).
Regarding the value the public places on the Hine’s Emerald Dragonfly, the final rule analysis did not identify Hine’s Emerald Dragonfly as a species whose recovery would benefit from the final ELGs, based on updates to the set of receiving waters af fected by steam electric power plant discharges in the baseline (and which are expected to improve as a result of the final rule).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 262 29.g. Benefits

– Benefits from avoided impoundment failures

Commenter Name: Public Hearing Transcript Commenter Affiliati on: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 15 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Virginia has many reasons to support stringent limitations on effluence from power plants. Virginia ranks 18th in the U.S. for production of coal ash and has 25 coal ash ponds and 11 power plants. Eight of the ponds are classified as significant hazards, meaning failure would cause economi c and environmental damage.
Comment Response:
EPA thanks the commenter for providing state

- specific context about coal ash impoundments, and agrees that mitigating the risk of future impoundment failures, which can cause significant economic and environm ental damage, is beneficial in Virginia and elsewhere.
For more on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 124 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

West Virginia has more slurry impoundments than any other state in the nation. A 2011 report by the Office of Surface Mining Reclamation found that the walls of coal slurry impoundments be dangerously weak. Tests of the densities of impoundment walls show fla ws in all seven sites surveyed in West Virginia.
Comment Response:
The 2011 report cited by the commenter focuses on coal waste impoundments affiliated with coal mines in the Appalachian region, which are outside the scope of the Steam Electric Generatin g Industry ELGs. EPA agrees that impoundments failures can cause significantEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 263 damages, whether the impoundments are used to manage coal slurry at mines (as in the examples highlighted by the commenter), or to manage coal combustion residuals at 14 power pla nts in West Virginia. As discussed in Chapter 6 of the BCA, the final rule will reduce the risk posed by impoundments at power plants.
For more on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Patrick O’Loughlin Commenter Affiliation: Buckeye Power, Inc. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4183

- A2 Comment Excerpt Number: 13 External Review Flag: No External Review Externa l Review Incorporated into Response: No
Comment Excerpt:
It also bears noting that surface impoundments containing ash sluice water pose a very low risk of structural failure. EPA's multi

- year effort to inspect every ash impoundment in the country found no "unsatisfactory" impoundments (i.e., in imminent danger of structural failure). Those ranked as "poor" did so primarily due to missing records rather than structural concerns.
Comment Response:
EPA agrees that structural failures of surface impoundments are episodic events; as detailed in Chapter 6 of the BCA, the historical probability of a failure is approximately 0.09 percent per impoundment per year for wall breaches, and 0.59 percent for other releases. However, as demonstrated by recent high

- profile, catastrophic structural failures, including the release at TVA’s Kingston plant, a single failure can have very serious consequences, including very high cleanup costs, natural resource damages, and transaction costs. Other types of releases , which have historically been more frequent, can also cause environmental damages and have high associated cleanup, damage, and transaction costs, as evidenced in Duke Energy’s Dan River coal ash release in 2014, which occurred after that impoundment had been assessed.
EPA’s final CCR rule is expected to significantly reduce the future probability of impoundment releases. By reducing the amount of CCR handled wet in impoundments, the final ELG rule will help further reduce damages from potential future rel eases from the impoundments.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 264 Commenter Name: Cari Boyce Commenter Affi liation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 129 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA’s Assumptions and Methodology for Determ ining Benefits from Avoided Impoundment Failures are Flawed
From a review of EPA’s “Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category” (BCA), the highest annualized benefits associated with the ELG Proposal are the avoided costs that result from EPA’s predicted reduction in the number of impoundment failures. The avoided costs in the analysis are assumed reductions in the costs that utilities would be expec ted to incur due to the fewer number of predicted structural failures of their CCR impoundments as attributed to operational changes at facilities resulting from the ELG Proposal. However, there are a number of flaws in how EPA determines these avoided cos ts and, subsequently, the benefits included in the ELG Proposal.

 Mischaracterized Changes to Utility Impoundment Management Practices
The ELG proposal does not require an existing impoundment to close, and EPA contemplates that impoundments will continue b e used to manage “legacy” wastewater. Duke Energy will likely continue to use impoundments that are meeting all the ground water protection and dam integrity protection standards. For this scenario to occur, EPA must select the Subtitle D Prime option unde r the CCR rule, as Duke Energy recommended above. Duke Energy may need to continue to operate surface impoundments for the function as a wastewater treatment system, for operational processes and/or for management of low volume wastestreams such as stormwa ter, leachate and coal pile runoff, even if no new CCRs are sent to them. Therefore, the continued use of these ponds is necessary since they are an integral part of the wastewater treatment systems used to manage the facility’s ancillary wastewaters.

EPA maintains that the benefits from “operational changes prompted by compliance with the ELG Proposal that may cause some utilities to reduce their reliance on impoundments to handle their waste.” 111 EPA assumes that there will be a reduction in reliance on im poundments which will reduce the total number and total storage capacity of impoundments in service. EPA concludes that this reduction will in turn diminish the “number of structural failure events” that would then require industry to expend significant dollars on cleanup and damage costs. EPA calculated the avoided cost benefits to range from $52.2 million to $295.1 million on an annualized basis depending on the regulatory options included in the ELG Proposal. In estimating this range of expected benefi ts, the Agency makes a number of assumptions and extrapolations that overestimates the avoided costs of reduced impoundment failures and creates an unrealistic economic benefit from compliance with the ELG Proposal.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 265 Duke Energy agrees with the analysis con ducted by USWAG 112 that points out that EPA inflated the benefits in the ELG Proposal for avoided impoundment failures. The USWAG analysis is significantly more detailed, but the major points will be summarized below. The EPA Benefit and Cost Analysis assu mes that these impoundments will close and excludes the capacity of all these “closed” units. This assumption is at odds with the structure of the ELG Proposal, which in fact contemplates the continued operation of these impoundments for certain wastewater s and therefore overstates the avoided costs and benefits associated with fewer potential impoundment failures.
For impoundments slated to be “partially closed,” EPA identifies a key supposition that while the reduction in flow entering the impoundment wil l not necessarily decrease the size of the impoundment, the impoundment will receive less combustion residuals and therefore, will be less likely to have a breach of the impoundment. There are no analyses or background data to justify this assumption, and Duke Energy believes it is invalid. Surface impoundments no longer receiving CCR transport water will continue to receive other low volume wastewaters and will control the water level in the impoundment to the same design elevation prior to discharging thr ough its outfall, no different from when the impoundment was receiving CCR transport water. An impoundment failure is not related to the volume, flow, or density of the receiving wastewaters. It is generally the result of an equipment failure or the struct ural failure of a berm, dike, or dam due to the lack of proper construction or maintenance. EPA’s rationale that assumes a reduction in the flow rate, associated with the operation of the impoundment or the amount of solids (CCR) in the wastewaters that ar e discharged into an impoundment, will result in fewer structural failures of impoundments is flawed. Duke Energy is not in a position to provide our own analysis of the actual cost impact adjustment needed due to the flawed assumptions EPA used in determi ning the projected number of impoundment closures, since the report that includes the necessary details for recalculation was not included in the docket.

 EPA Overstates the Rate at which Impoundments Fail
The chapter in EPA’s Benefit and Cost Analysis 113 t hat estimates the avoided costs of impoundment failures begins with a calculation of the probability of impoundment failures based on historic trends. It bases this calculation on an EPA Office of Resource Conservation and Recovery (“ORCR”) survey of impou ndments whereby plant owners and operators were asked if they had any releases from their impoundments during the period of 2000 through 2009 from a total of 726 impoundments. This survey was specific to the utility industry and facilities th at manage CCR in impoundments. The surveyed utilities reported 38 releases over 10 years during the requested time period and 4 other releases that actually occurred in the five years prior to the requested period. EPA divided the number of total releases across all the years reported by the industry and determined a failure rate of 0.58%.
In the analysis, the Agency confuses a spill or release from an impoundment with the concept of a structural failure. In fact, several releases included in these survey r esults are summarized on ORCR’s spreadsheet included in the docket. This summary indicates that some of these releases were captured by pumps, did not leave the permitted area of the impoundment and were very limited in volume released. EPA should only co nsider failures requiring the significantEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 266 expenditure of resources for response and cleanup activities that triggered cleanup obligations in determining a failure rate. EPA describes impoundment “failures” as those for which a significant portion of a dam fails, causing a significant release impacting many entities. However, EPA’s calculation of the impoundment failure rate includes these very small “releases” that clearly do not constitute impoundment “failures”. The Agency provides no explanation why the extrapolation of the cost benefit from preventing a catastrophic berm failure is appropriate to assume the same cost benefit for the total of modeled failures that were calculated based on the number of spills, some of which were very small releases, as re ported in the ELG ICR survey. Most of the spills reported in the survey did not have details of the actual duration and volume of the release and they cannot be assumed to be similar to the failures of the CCR

- containing impoundments identified by ORCR.

In 2009, after TVA’s Kingston event, ORCR sent out an Information Collection Request that was sent to all utilities to identify all surface impoundments that were used to manage or store CCR. Based on the information collected, EPA hired an engineering consu ltant with dam integrity experience to inspect all of Duke Energy’s surface impoundments that were managing CCR. Duke Energy did not receive any unsatisfactory inspection reports. In fact, EPA did not find a single impoundment in the country that could be rated as unsatisfactory out of the 374 units inspected. An unsatisfactory rating meant there was evidence that would indicate the potential for a berm or dam failure. The majority of EPA’s inspections conducted on Duke Energy’s surface impoundments resulte d in the issuance of a satisfactory rating (the highest rating issued for an inspection). The few “poor” inspection ratings that Duke Energy received were from the lack of documentation of the stability analysis conducted during design of the impoundments decades prior. Subsequently, the missing analyses were all reproduced and any of the minor inspection requirements noted by the inspectors were completed in a timely manner.
Duke Energy has a comprehensive maintenance program for all surface impoundments t o maintain structural integrity, which was in place even before the EPA inspections were conducted. These maintenance programs include routine inspections along with inspections performed by PE

- licensed consulting engineers (i.e. certified Professional Eng ineers). When the TVA collapse occurred, the entire industry reviewed their inspection and maintenance programs and improved them as required to reduce the risk of another failure. The probability of an impoundment failure today, even without the additiona l regulation to be implemented, is greatly reduced. These benefits, however, do not come from the ELG prohibition of discharging transport water, but from properly operating, inspecting, and maintaining berms, dikes, and dams of the surface impoundments us ed to manage CCR and other wastewaters. Duke Energy, therefore, recommends that EPA reevaluate this flawed approach which overstates the probability of future impoundment failures.

 EPA Overestimates the Capacity for Typical Discharges by Relying on the Det ails Reported from only a Few Impoundment Release Events
The Agency assumes that each spill included in the survey required cleanup costs, transaction costs, and natural resource damage costs and that these costs would be avoided if the impoundment were cl osed, pursuant to the implementation of the ELG Proposal. It is highly unlikely that the magnitude of costs assumed by EPA would be incurred by the utilities for theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 267 modeled number of spills in the analysis. EPA developed their value of the cost benefit fo r spills that will not occur if the ELG Proposal is implemented, from the 42 total spills reported in the ICR. Of the 42 spills reported, only 15 included detailed information about the spills. Since companies were not required to disclose spill volume, ma ny companies did not include this information.
It is likely that utility companies did not report the volume for minor leaks and seepage due to the difficulty in determining the volume released as compared to the size of the impoundment or the flow emittin g from the NPDES permitted outfall. A review of ORCR’s spreadsheet confirms this assertion since the other 27 spills, for which volume was not reported, described minor seepage, limited quantities of materials leaking, or minor NPDES permit limitation exce edances. These 27 minor spills are unlike the large capacity spills for which more detailed information was reported, such as the Martin’s Creek and Kingston events. For EPA to take the 15 spills with more detailed information and extrapolate them directly to the remaining 27 minor spills, for which data on capacity was not known, is a flawed methodology. This position assumes that two additional spills similar to the Kingston event and another two other spills similar to the Martin’s Creek release would ha ve occurred in the U.S. over the last 10 years.
Duke Energy contends that EPA should not use this flawed methodology for calculating the cost benefit since it leads to a significant overestimation of the likelihood of a significant spill occurring. It also ignores the extensive efforts that Duke Energy and other electric utilities have taken to ensure that spills of this sort will not occur in the future.

 EPA’s Cost Sources and Estimates Are Inapplicable to CCR Impoundments

EPA calculates the costs associated with each of these impoundment failures in terms of cleanup, natural resources damages, and transaction costs. 114 The problem with this analysis is that the studies on costs from which EPA draws its model do not fairly represent the types of dam ages or costs typically associated with spills from surface impoundments with CCR. This factor alone significantly overestimates the avoided costs of the ELG proposal.
The first cost component is the “cleanup costs.” EPA identified three historical cleanup costs for impoundment failures, including the two largest spill cleanups in recent history, Martin’s Creek and Kingston. Using these two spills as sources of cost data will certainly overestimate the costs associated with cleanup because of the complexity of the remediation and significant off

- site disposal costs associated with these events. Since this estimation is such a significant component of the BCA, Duke Energy strongly encourages EPA to revisit this calculation by at least examining more represent ative spills and cleanup costs. Rather than address the avoided costs of impoundment failures on a per

- gallon spilled basis, we strongly encourage EPA to assess representative spill costs for typical CCR impoundment spills rather than exclusively relying o n large capacity spills, which will result in a more representative avoided cost.
The second component of the cost estimate is the “Natural Resource Damages” (NRD) component in which EPA relies on a study that looked at prominent NRD cases from oil and che mical spills, among other incidents. EPA should identify specific NRD costs associated with CCR impoundment spills for use in these calculations instead of using costs from spills derivedEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 268 from other unrelated industrial events that pose very different risk s. EPA also makes no attempt to identify cost data associated with less prominent spills, which are more typical of CCR impoundment releases.
The third component of the cost estimates involve “Transaction Costs”, where EPA relies on studies that summarize these costs as a share of Superfund spending. The source of this data is very troubling and has very little relevance to releases from CCR impoundments. CCR impoundment releases are typically identified as coming from only one possible source, which is not the case in the examples EPA uses. Also, CCR impoundment spills generally are identified immediately and remediated before contamination spreads widely. Superfund cleanups are seldom, if ever, triggered by CCR releases. Using Superfund cases in this way w ildly inflates the estimated costs to address releases from CCR impoundments.
In summary, the portion of the BCA that calculates the avoided costs of impoundment failures relies very heavily on the two most significant CCR impoundment release events in U.S . history. The BCA also relies on flawed assumptions related to the probability of impoundment closures and it overinflates the costs associated with predicted failures. Duke Energy urges EPA to reevaluate these costs and benefits using a broader range of spill costs and realistic failure scenarios that do not rely on only the worst case scenarios and costs. Duke Energy also suggests that EPA include in its closure projections a more accurate representation of the number of wastestreams managed in impoundme nts, as well as, the likelihood that these impoundments would remain open regardless of whether CCR wastestreams can continue to be managed in them. These revised projections will provide a more representative and realistic estimate of the avoided costs of impoundment failures likely to be realized through this rulemaking.

111 78 Fed. Reg. at 34516

112 See Utility Solid Waste Activities Group comments submitted on September 20, 2013. Section 6

- EPA inflates the Benefits from the ELG Proposal on Avoided impoundment failures.

113 Benefit and Cost Analysis (BCA) for the Proposed Effluent Limitations Guidelines and Standards for Steam Electric Power Generating Point Source Category, April 2013, Section 7.1

- Benefits from Avoided Impoundment Failures [EPA

- 821

- R

- 13

- 004]

114 See BCA 7

- 2 [EPA

- 821

- R

- 13

- 004]
Comment Response:
EPA disagrees with the commenter’s assertion that assumptions and methodologies to estimate the benefits from avoided impoundment failures are flawed. While EPA recognizes limitations in the data available to support analysis of the final rule, the assumptions and methodology are reasonable to inform understanding of the potential impacts of impoundment failures, andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 269 benefits from avoiding or reducing future releases. We provide specific r esponse to the issues raised by the commenter below.
First, the commenter expresses concerns that EPA “mischaracterized changes to utility impoundment management practices” by assuming that plant owners would close their impoundments. EPA notes that this statement reveals a misunderstanding of EPA’s assumptions and methodology. In the impoundment analysis, EPA does not assume that all impoundments would close as a result of the ELGs, but instead assumes that plants would reduce the amount of coal combustio n residues handled wet and therefore stored in impoundments. This will in turn reduce the amount of CCR that may be involved in the event of an impoundment release.
The commenter states that EPA assumes that “the impoundment will receive less combustion

re siduals and therefore, will be less likely to have a breach of the impoundment.” This is not an accurate depiction of EPA’s analysis; EPA does not assume that decreasing the size of impoundments will reduce the probability of an impoundment breach. Instead , EPA assumed a constant rate of failure across impoundments under the baseline and post

- compliance scenarios. However, EPA did assume that reducing the amount of ash stored in a given impoundment will reduce the volume that accumulates in the impoundment over time, and that may be released in the event of a release. EPA accordingly estimated lower expected costs for the same number of future releases due to reduced CCR volumes involved. Additionally, for the final rule, EPA further improved this analysis b y calculating release rates separately for large impoundments and small impoundments for two types of failures, and calculating probabilities and capacity factors within those groups.
Next, the commenter notes that EPA “overstates the rate at which impound ments fail” and “overestimates the capacity for typical discharges by relying on the details reported from only a few impoundment release events.” EPA agrees that the size of, and damages associated with, impoundment releases tend to be very different for catastrophic structural failures, such as wall breaches, versus other releases. For the analysis of the final rule, EPA revised the analysis of failure probabilities and capacity factors (i.e., the amount of CCR released as a percent of impoundment capaci ty) by distinguishing between wall breaches and other types of events (see Chapter 6 in BCA).
The commenter describes the proposed rule analysis to imply that EPA assumed that the costs would be equivalent for all release types and sizes. This mischaracter izes EPA’s methodology. EPA applies per

- gallon cleanup costs and smaller releases therefore have proportionally smaller costs associated with them. For the final rule analysis, EPA continued to use a per

- gallon cleanup cost to estimate the costs associated with different size releases, but revised the costs to incorporate more recent publicly available data. See Section 6 of the BCA for more details.
EPA does not agree with the commenter’s assertion that the Agency “should only consider failures requiring t he significant expenditure of resources for response and cleanup activities that triggered cleanup obligations in determining a failure rate.” Smaller expenditures may also be avoided through implementation of the ELGs. Aggregated across many releases, the avoided costs of small releases may be significant.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 270 EPA appreciates that Duke Energy and other companies have inspected and performed maintenance on CCR impoundments in the aftermath of the TVA Kingston release. However, as clearly apparent by Duke Energy ’s Dan River release (see Section 6 of the final BCA for more discussion of this incident), these inspections do not prevent all releases. TVA had also conducted inspections of their impoundment at the Kingston Fossil plant before the dike's catastrophic f

ailure. EPA’s analysis of the final CCR rule recognizes that inspections cannot entirely eliminate the risk of future releases, relative to historical rates, as while the probability of such future releases is lower post

- compliance, it is not zero. EPA use d the remaining, post

compliance probability of failures from the CCR rule analysis as baseline for the final ELG rule analysis.
With regard to NRD, the commenter notes that “cost sources and estimates are inapplicable to CCR impoundments.” There is little publicly available data on NRD arising from CCR releases, and EPA therefore used historical NRD assessed for a variety of spills to estimate the NRD arising from CCR releases to the environment. EPA notes that the magnitude of NRD is likely to be a functi on of the resources impacted by a release, even if materials differ. To address the commenters concerns that CCR impoundment damages are substantively different from damages in certain NRD cases, EPA revised the data used to develop NRD assumptions to excl ude damages from legacy releases or releases to resources (e.g., marine waters) unlikely to be affected by an impoundment release.
Lastly, with regard to transaction costs, EPA disagrees that the Agency’s assumptions are based on data that are not relevant to this application. Searches to identify data specific to transaction costs incurred as a result of coal ash impoundment releases yielded no such data in public records. EPA determined that data from Superfund cases were the best available indicators of the transaction costs associated with impoundment failures since they provide insight into the typical types of costs that may arise from releases and other environmental damages. These costs may include negotiating natural resource damage payments, determ ining responsibility among parties (i.e., the utility owner or the insurer), and litigating details regarding settlements and remediation. These activities are relevant to the resolution of impoundment releases, as exemplified by the significant costs TVA incurred following the Kingston spill to address claims by neighboring property owners.
Regarding the commenter’s request that EPA reevaluate the number of wastestreams managed in impoundments as well as the likelihood that these impoundments would remain open, see the Agency’s response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1, Excerpt Number 20 (in comment code 6.f).

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A 1 Comment Excerpt Number: 130 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 271 Comment Excerpt:
In another example, EPA’s estimate of benefits attributable to reduced impoundment failure, which make up 37

- 58% of th e total benefits attributed to the proposed ELG (for options 3 and 4 where air benefits estimates are provided), is likely overestimated as a result of compounded flaws on EPA’s unit cost and failure probabilities. Gradient Report at 35
Comment Response:
EPA disagrees that the analysis of benefits of reduced impoundment failures is flawed, resulting in an overestimate of the rule benefits. For responses to the more specific comments about the Agency’s methods, see responses to related comments (e.g., DC N EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 190; EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 129).
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number Number 3 (in Comment Code 6.e).

Commenter Name: Cathy S. Woollums Commenter Affiliation: MidAmerican Energy Holdings Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4495

- A1 Comment Excerpt Number: 46 External Review Flag: No External Review Exte rnal Review Incorporated into Response: No
Comment Excerpt:

 When estimating benefits by avoiding impoundment failures EPA did not account for current best management practices and actions undertaken to assess and improve structural integrity in light of the 2007 Kingston incident, resulting in an inflated probability of impoundment failures.
Comment Response:
EPA acknowledges that the industry has inspected and performed maintenance on CCR impoundments in the aftermath of the TVA Kingston release, and that these actions may reduce the future failure probability. However, as clearly apparent by Duke Energy’s Dan River release (see Section 6 of the BCA for more discussion of this incident), these inspections do not prevent all releases. Inspections and ot her best practices required by the CCR rule are expected to reduce the future probability of impoundment failures. The baseline for the final ELG rule analysis assumes compliance with the CCR rule, and the probability of impoundment failures therefore

acco unts for the required inspections and best practices. Chapter 6 of the BCA describes the analysis.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 272 For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 20 External Review Flag: No External Review External Revie w Incorporated into Response: No
Comment Excerpt:
EPA’s calculated societal benefit for avoided pond failures is based on a subset of available data that represents different types of releases and imparts a significant bias to large releases, and costs a re also based on large releases while most releases are relatively small.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Numbers 100 and 101 for specific issues raised by the commenter.

Commenter Name: Paul Chu Commenter Af

filiation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 100 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 13 CALCULATED BENEFITS FROM AVOIDED POND FAILURES

EPA based its benefits analysis on avoided costs associated with reduced potential for coal combustion residual (CCR) pond failures. The benefits calculation estimated the probability and size of future pond failures, a nd avoided costs associated with clean

- up, natural resource damage, and transactions.



### 13.1 EPA estimates spill size and spill probability based on a subset of available data that represent different types of release and impart a significant bias to large r eleasesEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 273 EPA identified 42 releases over a 15

- year period, and then estimated a capacity factor by calculating the ratio of release size to impoundment capacity. The capacity factor was calculated for 15 of the 42 sites for which EPA had both release volume and pond capacity data. The average capacity factor (6.45% of impoundment capacity) was then assumed to be representative of all 42 releases. The 2010 Regulatory Impact Assessment (RIA) for the proposed CCR disposal rule [EPA, 2010] was cited as the sourc e of the release volume and impoundment capacity data.
Release volumes for the 15 reported releases span a range of more than 8 orders of magnitude, from 50 gallons to 1.1 billion gallons. More than half of the releases (9 of 15) were less than 15,000 gallons, 5 were between 6 million and 100 million gallons, and 1 was greater than 1 billion gallons (Figure 13

- 1). EPA recognized this wide range and uneven distribution in the 2010 RIA, breaking the data into three groups: releases of 1 billion gallons or more (termed catastrophic failures), releases between 1 million and 100 million gallons (termed significant failures), and releases of less than 1 million gallons (termed seepage failures). For the seepage failures, EPA stated,
“These smaller seeps are co mmon to earthen dams and are not necessarily a problem unless the seepage volume is increasing or the seepage becomes cloudy...” [EPA, 2010, page 136]
The 9 small releases in this grouping are all well below the 1

- million

- gallon threshold and represent small releases that are fundamentally different from large facility failures. Combining these small releases with the large failures to generate an average release behavior is inappropriate. The skew in the dataset is made apparent by comparing the mean (85 mil lion gallons) and median (5,000 gallons) releases. Moreover, it is likely that most of the 27 releases with no reported volumes were small releases that did not constitute significant containment failures, and therefore had limited data available.

EPA assumes a uniform failure rate across all impoundments. Given the different types of release described above

— ranging from small seepages to the catastrophic containment failure at TVA’s Kingston facility

— along with the known variations in site setting, des ign, and operation, a uniform failure rate across all impoundments is unlikely. EPA has site

- specific inspection data on facility engineering that could be used to better determine the distribution of relative risk of failure for the facilities, rather tha n simply assuming all facilities have the same probability of failure.
EPA also assumes that the pond failure rate after 2018 will return to its pre

- 2010 rate. This assumption, as EPA acknowledges, is questionable because it ignores improvements in engineering, impacts of the impending CCR rule, increased regulatory and public scrutiny, and planned plant closures that preferentially affect older plants (and presumably higher

- risk ponds). All of these will mitigate future failure risk, even in the absence of the ELG rule.

EPA’s on

- site structural stability assessment reports should be used

— along with knowledge of changes within the industry on engineering practices, the CCR rule, and plant closures

— to develop a better estimate of the probability of future spills, rather than assuming it will be the same for all sites as the historical probability.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 274 Comment Response:
EPA used available historical data to calculate average release rates and capacity factors (i.e., the amount released as a percent of impoundment capacity) for use in the analysis, and adjusted future release probabilities to reflect the effects of the final CCR rule in estimating the incremental benefits of the final ELG rule. EPA acknowledges the possibility that releases for which vo lume data was not provided may have smaller volume than those for which the release volume was provided in the OCRC survey responses, but notes that there is no evidence that the volume data is skewed toward smaller or larger releases. Further, EPA found n o evidence that the historical release data derived from the ORCR survey is fundamentally different than the types of releases that would be associated with impoundments at power plants to which the rule applies, and no evidence that missing data skews the estimates toward smaller or larger releases.
To address concerns associated with applying assumptions uniformly across all releases, EPA revised the impoundment analysis for the final rule based on the approach used for the final CCR rule, notably by esti mating release rates and capacity factors separately for structural failures (e.g., wall breaches) and other types of releases, and for big vs. small impoundments. The revisions incorporate several of elements suggested by the commenter, including the effe cts of the CCR rule and plant closures. See Chapter 6 of the BCA for more details on the impoundment failure analysis.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 275 For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 446 4

- A1, Excerpt Number 3 (in Comment Code 6.e). For additional information on the future probability of impoundment failures, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4495

- A1, Excerpt Number 46.

Commenter Name: Paul Chu Commenter Affiliation: Electric Po wer Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 101 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 13.2 EPA estimates of cleanup costs are based on the largest releases, while most releases are relatively small

EPA based their cleanup costs on the average of only two large CCR releases (Kingston CCR site and Martin’s Creek CCR site) and one large coal slurry pond (Massey site). In the 201 0 RIA, EPA characterized the Kingston and Martin’s Creek costs as,
“...[three] of the most significant and recent release cases (i.e., cases resulting in the most gallons released).” 1 [EPA, 2010]
There is no reason to believe that costs for these three spill s are representative of the other 40 CCR spills. As previously noted, most of the other releases were as much as 8 orders of magnitude smaller than the Kingston and Martin’s Creek releases; these other releases likely incurred minimal cleanup costs. EPA pr esents no data to support the assumption that smaller spills will have a cost structure similar to that of these very large spills. For the three large spills alone, the cost range varies by a factor of 5 ($0.22/gal to $1.15/gal); we would expect that the cost factors for much smaller spills would significantly extend the lower end of that range. In addition, there is an implicit assumption in the avoided cost calculation that there are no risks associated with prematurely closing an active pond, and the co nstruction and operation of a replacement facility.

1 The third site from the 2010 RIA, Widows Creek, was not included in the ELG cleanup cost calculation. It is not clear why Widows Creek was excluded from this analysis while Massey Coal Slurry Pond wa s added.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 276 The commenter does not provide a basis for his/her assertion that “cost factors for much smaller spills would significantly extend the lower end of [the range of cleanup costs],” or explain how the cost structure would differ b etween large and small spills. EPA found no evidence that the unit costs associated with smaller releases would be meaningfully smaller than those associated with releases for which costs are available.

EPA derived reasonable estimates of the unit cost of cleaning releases using the available data. For the final rule analysis, EPA updated cost assumptions to incorporate more recent data from public records. The final analysis includes data for five historical impoundment failures: the three used in the prop osed rule analysis, plus the Widows Creek release and the 2011 Oak Creek release in Wisconsin. These data show that, contrary to the commenter’s assertion, comparably smaller releases such as the Oak Creek release in Wisconsin (see Chapter 6 of the BCA for discussion of this incident) can result in higher per gallon costs than larger releases such as the Kingston release. Chapter 6 of the BCA describes this analysis.
Regarding the commenter’s concern that the avoided cost calculation does not account for ri sks from prematurely closing an active ponds or the cost of a replacement facility, EPA notes:
1) The ELGs do not require closure of the impoundments. EPA’s analysis of avoided costs accordingly focuses on the changes in the amount of CCR managed in the im poundments rather than assumes that the impoundment will close.
2) EPA does not have data on any increase in risks from prematurely closing active ponds, or perhaps more relevant for the ELG analysis, any increase in risk from reducing the amount of CCR ma naged in the ponds. The commenter did not provide such information.
3) It is unclear what “replacement facility” the commenter is referring to. EPA notes that the costs of the final ELGs include the capital and O&M costs for systems and equipment that woul d be implemented by facilities currently using impoundments to manage their CCR and would be expected to convert to dry ash handling. It would not be appropriate to also include these costs into the benefit column.

For additional information on considerati on of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 102 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 277 

### 13.3 No justification is presented for applying Superfund transaction costs to CCR pond cleanup costs

Transaction costs were estimated based on cleanup costs at Superfund sites; these costs represent over 25% of the estimated benefits in the ELG rule. Transaction costs at Superfund sites are typically associated with litigation to determ ine the liabilities of multiple potentially responsible parties (PRPs). Because CCR ponds are located on or near power plant property and typically do not have multiple PRPs, the transaction actions would be expected to be significantly lower or negligible . EPA should either eliminate the transaction costs from the avoided cost calculation, or provide justification for including typical Superfund transaction fees in the benefits assessment for CCR ponds.
Comment Response:
EPA disagrees that it should elim inate transaction costs from the avoided cost calculation, as suggested by the commenter. Data from Superfund cases provide insight in the types of costs that arise from releases and other environmental damages. These costs may include negotiating natural resource damage payments, determining responsibility among parties (i.e., the utility owner or the insurer), and litigating details regarding settlements and remediation. These activities are relevant to the resolution of impoundment releases. Searches to identify data specific to transaction costs incurred as a result of coal ash impoundment releases yielded no such data in public records. As such, EPA determined that data from Superfund cases represent the best available indicators of transaction costs as sociated with impoundment failures. Based on data from these cases together with historical data on cleanup costs and natural resource damages, EPA estimated that, on average, transaction costs represent 26 percent of the costs associated with a spill. For more details, see Section 6.1 of the BCA.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: James R. Ro ewer Commenter Affiliation: Utility Solid Waste Activities Group (USWAG) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excer pt:
Finally, Section VI reviews EPA’s Benefit and Cost Analysis” (“BCA”) for a portion of the ELG Proposal and identifies multiple and compounding erroneous assumptions in the BCA that lead it to drastically inflate the benefits of the ELG Proposal with respect to avoided CCR impoundment failures.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 278 Comment Response:
EPA disagrees that the benefits associated with avoided CCR impoundment releases are drastically inflated. See responses to the related comments about the Agency’s methods in EPA

HQ

- OW

- 2009

- 0 819

- 4652

- A1 (excerpts 21, 22, and 23).

Commenter Name: James R. Roewer Commenter Affiliation: Utility Solid Waste Activities Group (USWAG) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 Comment Excerpt Number: 19 External Review Flag: No Extern al Review External Review Incorporated into Response: No
Comment Excerpt:

VI. EPA DRASTICALLY INFLATES THE BENEFITS FROM THE ELG PROPOSAL ON AVOIDED IMPOUNDMENT FAILURES
According to EPA’s “Benefit and Cost Analysis for the Proposed Eff luent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category” (“BCA”), the highest annualized benefits associated with the proposed ELGs are the avoided costs that result from the reduced number of impoundment fa ilures. Id. at 10

- 2. These purportedly avoided costs are reductions in the costs that utilities would incur due to the fewer number of structural failures of their CCR impoundments attributable to facility operational changes driven by the proposed ELGs.
EPA maintains that these benefits originate from “operational changes prompted by compliance with the proposed ELGs [that] may cause some plant owners to reduce their reliance on impoundments to handle their waste.” 78 Fed. Reg. at 34516. This reduction in reliance on impoundments is expected to reduce the number and capacities of impoundments in service, which will, in turn, reduce the “number of structural failure events” which require industry to expend significant sums on cleanup and damage costs. I d. EPA calculated that these avoided cost benefits will range from $52.2 million to $295.1 million on an annualized basis depending on the regulatory option that the Agency decides to adopt through this rulemaking and the relative applicable discount rate. Id. In estimating this range of expected benefits, the Agency makes a number of assumptions and extrapolations that vastly overestimate the avoided costs of reduced impoundment failures and create an unrealistic picture of the likely actual economic imp acts of the ELGs. As discussed below, these errors include:

 Overestimating the likelihood that CCR surface impoundments will close,

 Mischaracterizing changes to utility management practices,

 Overstating the rate at which impoundments “fail,”

 Overestimating the capacity for typical discharges by over relying on very few impoundment failures, andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 279  Calculating likely costs by relying on extreme cost scenarios and evidence unrelated to typical CCR impoundment spills.
Comment Response:
EPA disagre es that the avoided impoundment failure analysis vastly overestimates the avoided costs and creates an unrealistic picture of the likely actual economic impacts of the ELG. For responses to specific comments about the Agency’s methods, see responses to com ment EPA

HQ

- OW

- 2009

- 0819

- 4652

- A1 (excerpts 21, 22, and 23).
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: James R. Roewer Commenter Affiliation: Utility Solid Waste Activities Group (USWAG) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Respons e: No
Comment Excerpt:

B. EPA Mischaracterizes the Recent Changes to Utility Management Practices
Following the Kingston release, owners and operators of CCR impoundments took determined steps to ensure that no similar spill would take pl ace elsewhere. The spill itself increased awareness of the issue among industry and the public. Following these steps conducted by utilities, EPA also conducted a series of extensive assessments of the structural integrity of CCR surface impoundments th roughout the country. These assessments did not identify a single unsatisfactory CCR impoundment. See EPA Website at http://www.epa.gov/osw/nonhaz/industrial/speci al/fossil/surveys2/index.htm (last viewed on Sept. 12 2013). In fact, the vast majority of the deficiencies noted by the Agency and its representatives related to a lack of original paperwork for these facilities and very few significant structural issues

. Utilities were required to develop and implement action plans to address all of the Agency’s findings, which, again, mainly involved a lack of original paperwork.
In its analysis of the significant avoided costs associated with impoundment failures that will be realized through the promulgation of the ELGs, EPA assumes that these structural assessments will reduce the failure rate from impoundments to zero until 2019 at which time the failure rate will return to its 2000 to 2009 baseline. BCA at 7

- 2. U nderlying this assumption is the Agency’s implicit assertion that utilities will take measures to rectify significant concerns with impoundments, but only in the short term. By 2019, according the BCA, utilities will haveEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 280 completely forgotten the lessons from the Kingston spill and will revert to a less careful approach to impoundment safety.
This assumption also completely ignores the actual findings of the assessments that primarily found a lack of original paperwork. The resolution of this concern will normally require a detailed structural evaluation by the utility and the development of engineering drawings and studies of the impoundments. These actions will typically address EPA’s finding in both the short and the long term and it is very unlikely t hat these companies will need to conduct a similar effort in the future. EPA’s assumption in the BCA undervalues the utilities’ attention to the structural integrity of their impoundments and mischaracterizes the findings of EPA’s own structural integrity assessments.
Comment Response:
EPA appreciates that the industry has inspected and performed maintenance on CCR impoundments in the aftermath of the TVA Kingston release, and that these actions may reduce the future failure probability. These inspection s do not prevent all releases and in the absence of more regulation governing the impoundments, future releases would be expected to occur. This is evidenced by the coal ash release into the Dan River in February 2014, despite regular inspections and after completion of an inspection that found the site to be well maintained and in good working order (see Final Report: CCW Impoundment Inspection Report, Dan River Steam Station Rockingham County, North Carolina; submitted to EPA in September 2009 ).

EPA’s ana lysis for the final CCR rule (U.S. EPA, 2014) recognizes that inspections cannot entirely eliminate the risk of future releases, relative to historical rates, as while the probability of such future releases is lower post

- compliance, it is not zero. EPA ac counted for the effects of the inspections and best practices required in the CCR rule in the baseline for the final ELG in assuming a residual, post

- compliance probability of failures. For more details, see Chapter 6 of the BCA for the final rule.

For add itional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

References:
United States Environmental Protection Agency (U.S. EPA). 2014. Regu latory Impact Analysis for EPA’s 2015 RCRA Final Rule Regulating Coal Combustion Residue (CCR) Landfills and Surface Impoundments at Coal

- Fired Electric Utility Power Plants.

Commenter Name: James R. Roewer Commenter Affiliation: Utility Solid Waste A ctivities Group (USWAG) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 Comment Excerpt Number: 22Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 281 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

C. EPA’s Assessed Benefits from Avoided Impoundment Failures Overstates the Likelihood and Size of these Failures
EPA’s chapter in the BCA that estimates the avoided costs of impoundment failures begins with a calculation of the probability of impoundment failures based on historic trends. BCA at 7

- 1. It bases this calculation on an EPA Office of Resource Conservation and Recovery (“ORCR”) survey of impoundments whereby plant owners and operators were asked if they had any releases from their impoundments during the period of 2000 through 2009 from a total of 726 impoundments. This survey was aimed at utility facilities that managed CCRs in impoundments, and were accordingly subject to ORCR jurisdiction. These surveyed facilities reported 38 “releases” for the 10 years surveyed an d 4 facilities reported “releases” that actually occurred in the five years prior to the surveyed period. EPA divided the number of total releases across all the years reported by the impoundments to determine a failure rate of .58%. Id.

While this metho d seems unobjectionable on its face, this analysis confuses several issues. The Agency conflates “release” with the concept of impoundment failure. In fact several releases captured by these survey results and summarized on ORCR’s spreadsheet at http://www.epa.gov/osw/nonhaz/industrial/special/fossil/surveys/survey_database_041212.xls

x (last viewed on June 24, 2013) indicate that some of these rele ases were captured by pumps, did not leave the permitted area of the impoundment, or were otherwise very limited in scope. EPA needs to ensure that what it considers failures requiring significant expenditure of resources for response and cleanup activiti es actually would have triggered cleanup obligations. While the Agency appears to be indicating that impoundment “failures” are those for which a significant portion of a dam fails causing a significant release impacting many entities, its calculation of the impoundment failure rate includes small “releases” that clearly do not constitute impoundment “failures.”
EPA next extrapolates this failure rate to calculate the expected number of releases for the universe of 1070 impoundments that the Office of Wate r has identified. The Agency does not provide any analysis for why this extrapolation is at all appropriate or identify how these impoundments might be similar to the CCR

- containing impoundments identified by ORCR. It can be assumed that the 344 impoundm ents identified by the Office of Water but not included in the ORCR survey pose a lesser degree of risk or contain substantially less quantities of CCR because they were neither identified by ORCR nor included in that office’s comprehensive survey. EPA ma kes a direct extrapolation from the surveyed units to the non

- surveyed units without regard to whether the capacity or risks associated with these units are similar.
Our understanding is that the 344 additional impoundments include wastewater ash storage p onds, low volume waste ponds with limited CCR disposal, and stormwater ponds. These ponds are very different from the impoundments included in the ORCR survey and pose significantly lower risks than the bulk of the ponds in the survey. These ponds are oft en very smallEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 282 (approximately one or two acres) and have typically very low elevation or are incised within the general topography. Thus, the extrapolation from the ORCR surveyed units to the entire universe of 1070 identified by the Office of Water has a high potential of overestimating the total risks and avoided costs associated with these additional units not included in the ORCR survey.
One of the most serious errors in this chapter of the BCA is EPA’s assessment of its so called “capacity factor,” wh ich is the expected average volume of material spilled for the expected release from each of the 1070 impoundments. Id. at 7

- 2. The Agency briefly explains this concept as reflecting a calculation of a ratio between the spill volume and impoundment capac ity for 15 of the 42 releases where the surveyed companies happened to report the spill volume on their survey responses. While impoundment capacity was requested on the survey, spill volumes were not. Nonetheless 15 spill volumes were reported by certai n facilities and several other facilities provided other types of details concerning their spills. EPA calculated an average spill volume of 6.45% of impoundment capacity based on the 15 spills and assumed this average was the same for the other 27 spills

. There are several glaring problems with this analysis. USWAG was able to obtain access to EPA’s calculation worksheet for determining this capacity factor, which was not located in the docket for this rulemaking or cited in this chapter of the BCA. Whi le 6.45% is the average capacity spilled, a quick perusal of the underlying data indicates that very few spills were either of a significant percentage of the impoundment’s volume or a significant volume of CCR wastewater. For example, while 6.45% is the mean of the 15 spills, the median (eighth largest capacity spill) is .1% and only 4 spills were of a capacity larger than 2%. This means, in essence, that only a very few number of spills are significantly impacting EPA’s findings. In fact, the two lar gest recent spills, Kingston and Martin’s Creek, are clearly the most significant spills by capacity and contribute over 97% of the total volume of CCR wastewaters included in this analysis of reported spills. This finding seems reasonably intuitive becau se these spills are widely known as the most significant CCR spills, but it also drastically skews EPA’s calculations in this report.
The Agency assumes that each spill included in the survey required cleanup costs, transaction costs, and natural resource damage (“NRD”) costs which are avoided if the impoundment would be closed, pursuant to the implementation of the ELGs. It is highly unlikely that these costs will even be incurred for all of the 15 spills for which details are known ( e.g. , 50 gallon spill of wastewater). What is much more troubling, however, is that EPA is assuming the spills for which it has data (15) are identical to the spills (27) for which is does not have data. Because companies were not required to disclose spill volume, many comp anies did not include this information. We would posit, however, that companies would more likely disclose this information if the spill was so significant that the company knew the volume of the spill. Companies probably would not report the volume of m inor leaks and seepage because it would be less likely that they could determine the volume spilled. A review of ORCR’s spreadsheet confirms this position. Many of the other 27 spills for which volume was not reported described minor seepage, limited qua ntities of materials leaking, or minor NPDES permit limitation exceedances.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 283 Furthermore, the other 27 spills that are reported to have taken place are unlike the large capacity spills for which data were reported

— e.g. , Martin’s Creek and Kingston. Similar spills could not realistically have taken place without EPA being aware of them. As mentioned above, EPA takes the 15 spills and extrapolates them directly to the remaining 27 spills for which data on capacity is not known. This implicitly but directly assumes that two other spills like Kingston and two other spills like Martin’s Creek have occurred in the U.S. over the last 10 years, when in fact such spills simply did not occur. The addition of such non

- events leads to a drastic overestimating of the likelihood of a serious spill occurring. It also ignores the efforts that the regulated industry has taken to ensure that spills of this sort will not occur going forward.
Comment Response:
EPA recognizes that there is a difference between the release r ates and capacity factors (i.e., the amount of CCR released as a percent of impoundment capacity) associated with large structural failures (i.e., wall breaches) and other types of generally more minor releases. For the benefit analysis of the final rule, EPA revised the analysis of release rates and capacity factors by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity, following the approach used for the final CCR rule analysis

. These changes address the commenter’s concern regarding the application of uniform assumptions to potentially very different types of impoundments and releases. For further description of this revised approach, see Chapter 6 of the BCA.

For the final rule, EPA also distinguished “big” impoundments that may have either wall breaches or other types of releases from “small” impoundments that are unlikely to have wall breaches, where classification of the impoundments in one or the other category is based on the impoundment capacity and berm height. EPA then applied the release probability and capacity factor to each category of impoundment and type of release. This change further addresses the commenter’s concern regarding the application of uniform assump tions to potentially very different types of impoundments and releases.
EPA also appreciates the industry’s efforts to ensure that catastrophic releases do not occur in the future. However, these efforts cannot prevent all unanticipated release events, as evidenced by the Dan River release in February 2014, which occurred despite regular inspections and after completion of an inspection that found the site to be well maintained and in good working order (see Final Report: CCW Impoundment Inspection Report, Dan River Steam Station Rockingham County, North Carolina; submitted to EPA in September 2009 ; see Chapter 6 of the BCA for more information on this event). For the final rule analysis, EPA used baseline failure probabilities that reflect compliance with t he recently promulgated final CCR rule. While the CCR rule is expected to significantly reduce the probability of future impoundment failures, relative to historical failure rates, the residual risk is not zero.

For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 284 Commenter Name: James R. Roewer Commenter Affiliation: Utility Solid Waste Activities Group (USWAG) Document Cont rol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 Comment Excerpt Number: 23 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

D. EPA’s Cost Sources and Estimates Are Inapplicable to CCR Impo undments
In the BCA, EPA next calculates the costs associated with each of these impoundment failures in terms of cleanup, natural resources damages, and transaction costs. BCA at 7

- 2. The most significant problem with this analysis is that the studies o n costs from which EPA draws its model do not fairly represent the types of damages or costs typically associated with spills of CCR from surface impoundments. This factor alone significantly overestimates the avoided costs of the ELG proposal.

The first cost component is “cleanup costs.” EPA identified three historical cleanup costs for impoundment failures and calculated an average cleanup cost based on a per

- gallon spilled basis. One of these cleanup costs was from a site that contained coal slurry wh ich only nominally is similar to the wastewaters contained in CCR impoundments. The other two sources are from the TVA Kingston and Martin’s Creek spills, the two largest spill cleanups in recent history. We assume that these two spills would be the mos t expensive cleanups for obvious reasons and would pose the most significant and complex costs associated with off

- site cleanup and remediation. Using these two spills as sources of cost data will almost certainly overestimate the costs associated with c leanup. Since this estimation is such a significant component of the BCA, we strongly encourage EPA to revisit this calculation by at least examining more representative spills and cleanup costs. Rather than address the avoided costs of impoundment failu res on a per

- gallon spilled basis, we strongly encourage EPA to assess representative spill costs for typical CCR impoundment spills rather than exclusively relying on large capacity spills. This will result in a more representative avoided cost.

The seco nd portion of the cost estimate is the “Natural Resource Damages” component in which EPA relies on a study that looked at prominent NRD cases that arise, as EPA states, from oil and chemical spills among other incidents. It unknown why EPA did not attempt to at least identify some NRD costs from CCR impoundment spills in forming this calculation, which we assume would pose very different risks from oil or chemical spills. EPA also makes no attempt to find cost data associated with less prominent spills, w hich are more typical of impoundment releases

— e.g ., the median capacity spill from the group of 15 releases for which details were known involved a 5,000 gallon discharge of wastewater.
The third component of the cost estimates involved “Transaction Costs” where EPA relies on studies summarizing these costs as a share of Superfund spending. These costs include “negotiating NRD, determining responsibility among potentially responsible parties, and litigating details regarding settlements and remediation.” Id. at 7

- 4. The source of these data isEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 285 very troubling because typical Superfund cases address long

- standing soil and groundwater contamination usually occurring over many years and include litigation between any number of potentially responsible parties that have very little relevance to releases from CCR impoundments, which are typically obvious and presumably could have come from only one possible source. Furthermore, CCR impoundment spills generally would be identified immediately and remediated befor e contamination could spread widely. In contrast, Superfund sites typically involve contamination plumes that have spread both horizontally and vertically over years or decades. Using Superfund cases in this way wildly inflates these costs for CCR impoun dments.
The portion of the BCA that calculates the avoided costs of impoundment failures relies very heavily on the two most major CCR impoundment spills. This reliance as well as its mistaken assumptions on the probability of impoundment closures, necessarily overinflates the costs associated with these types of failures as well as the likelihood that the promulgation of the ELGs will cause impoundment closures to avoid these costs. We strongly urge EPA to evaluate a broader range of spill costs an d failure scenarios that do not overly rely on worst case scenario possibilities and costs. We also suggest that EPA include in its closure scenarios a

more complete picture of the number of wastestreams managed in impoundments as well as the likelihood t hat these impoundments will remain open regardless of whether CCR wastestreams can continue to be managed in them. This will provide a more representative and realistic estimate of the avoided costs of impoundment failures likely to be realized through th is rulemaking. As currently drafted, the BCA does not provide a reliable avoided cost estimate related to reduced impoundment failures and we respectively submit cannot reasonably serve as the basis for this rulemaking.
Comment Response:

The commenter d oes not provide data to support the assertion that larger

- scale spills “would be the most expensive cleanups for obvious reasons” and while the commenter may be making this statement based on aggregate costs, EPA did not find evidence that smaller spills h ave smaller unit (i.e., per

- gallon) costs. In fact, publicly available cost data EPA compiled to support the final rule analysis show that comparably smaller releases such as the Oak Creek release in Wisconsin (see Chapter 6 of the BCA for more information on this incident) may have higher per

- gallon costs than larger releases such as the Kingston release.
While EPA agrees with the commenter that CCR may cause different natural resource damages than oil or chemical spills, the magnitude of NRD is likely to be a function of the resources impacted by a release, even if materials differ. The commenter asserts that EPA did not attempt to identify costs associated with NRD from CCR impoundment releases. EPA’s searches for additional data on the NRD associated wit h these releases showed that there is little publicly available data on NRD arising from CCR releases due to infrequent incidents, or incidents that happened too recently for the assessment to be complete.
As EPA noted in the Regulatory Impact Analysis (RI A) for the CCR final rule (U.S. EPA, 2015, page 5

- 17), many factors influence the scale of NRD associated with a particular event, such that two release events of exactly the same substance (e.g., coal ash) and size, but at two differentEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 286 locations and poin ts in time, could easily produce very different claims. Thus, even if a large sample of NRD cases associated with coal ash releases were available, it could only serve to bound the likely order of magnitude of damages for any particular event. For example, NRD costs are primarily based on the value of the affected resource rather than the magnitude of the damage event and the analysis would ideally use GIS data to build a location

- specific habitat description for each of the impoundments in the universe. Ho wever, habitat factors that drive NRD values vary widely with location, reflecting altitude, geology, local climatic conditions, and combinations of terrestrial and aquatic species with differing values. The value of habitat is also linked to the location

- specific recreational opportunities it provides. While detailed, high

resolution spatial data are available to characterize site

- specific features, the scope of the impoundment universe is too broad to allow a detailed assessment of site

- specific habitat. In the absence of a directly analogous sample and site

- specific data on resources that may be affected in the event of a release, a large sample of settled or otherwise resolved damage claims representing a wide variety of release event types provides the soundest basis for establishing the order of magnitude of damages for releases of different sizes. As such, for the final rule analysis, EPA used historical NRD assessed for a variety of spills involving oil and chemical substances to estimate the NRD aris ing from CCR releases to the environment. EPA revised the data used to develop NRD assumptions to address commenters concerns that CCR impoundment damages are substantively different from damages in certain NRD cases, notably damages from legacy releases o r releases to resources (e.g., marine waters) unlikely to be affected by an impoundment release.
With regard to transaction costs, EPA disagrees that the use of Superfund data “wildly inflates these costs.” Data from Superfund cases provide insight in the types of costs that arise from releases and other environmental damages. As noted by the commenter, these costs may include negotiating natural resource damage payments, determining responsibility among parties (i.e., the utility owner or the insurer), and litigating details regarding settlements and remediation. These activities are relevant to the resolution of impoundment releases. Searches to identify data specific to transaction costs incurred as a result of coal ash impoundment releases yielded no

suc h data in public records. As such, EPA determined that data from Superfund cases were the best available indicators of the transaction costs associated with impoundment failures.
For more information on the methodology used to evaluate wastestreams managed in impoundments and the likelihood that these impoundments would remain open, see the Agency’s response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1, Excerpt Number 20 and the memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis” (DCN SE05825 ).
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: James R. Roewer Commenter Affiliation: Utility Sol id Waste Activities Group (USWAG) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 287 Comment Excerpt Number: 28 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Finally, for the reasons detailed in the above comments, USWAG believes that EPA has dramatically inflated the alleged benefits from the ELG rule with respect to avoided CCR impoundment failures.
Comment Response:
EPA disagrees that it has dramatically inflated the benefits of avoided C CR impoundment failures. For responses to specific comments about the Agency’s methods, see responses to comment EPA

- HQ

- OW

- 2009

- 0819

- 4652

- A1 (excerpts 21, 22, and 23).
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Numbe r: 190 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

E. EPA’s Analysis of Impoundment Failures Is Inadequate
In its Benefit and Cost Analysis, EPA has calculated the probability and costs of catastrophic impoundment failures. At least in part this analysis is intended to justify the proposed BMPs.

1. Failure Probability
However, the impoundment failure analysis suffers from several shortcomings, as documented in the attached report by Gradi ent. Attachment 2.
First, EPA calculated an aggregate annual release probability without regard to the size or seriousness of the releases. EPA lumped together 42 releases, only one of which was catastrophic.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 288 Of the five “significant” failures, two were in the same embankment and another was not a sudden failure but a release over several years. Thus only four of the six significant failures were independent and sudden. Considering only the four changes the annual failure rate from 0.58% to 0.055%, a te nfold reduction.
Also, EPA divided the total reduction of releases by the number of impoundment years. A more appropriate approach would be to use a Poisson distribution.

2. Capacity Factor
To calculate the “capacity factor” of impoundments, EPA mixed i mpoundment capacities with storage capacities. The only storage value relevant to EPA’s method is the stored volume when the release occurred. It appears EPA expects the capacities of impoundments to change due to the ELG rule, but EPA does not explain h ow.
Also, EPA applies the capacity factor to all the 36 releases, even the ones that are not spills and were not likely related to capacity or stored volume.
Moreover, EPA does not explain its analysis of capacity factors, as explained in the Gradient repo rt.

3. Failure Costs
EPA’s estimation of the costs of impoundment failures is also inadequate. “Direct costs” were based on sudden releases (generally an embankment failure), but 36 of the 42 releases were seepage releases, which generally do not involv e the kinds of cleanup associated with larger embankment failures.
“Natural resource damages” and “transaction costs” were based on CERCLA cleanups, which usually last for years and involve multiple parties who must work out responsibility.

4. Benefits o f Reducing Volume of CCRs in Impoundments
Finally EPA calculated the “benefit” of having the ELG rule reduce the amount of CCRs treated in impoundments. EPA does not explain how it estimated the reduction in volume to be caused by the ELG rule. Moreover, the flawed parameters mentioned above make the estimation of reduced volume unreliable.
Comment Response:
EPA recognizes that there is a difference between the release rates and capacity factors (i.e., the amount of CCR released as a percent of impoundment capacity) associated with large structural failures (i.e., wall breaches) and other types of generally mo re minor releases. For the benefit analysis of the final rule (see Chapter 6 of the BCA), EPA revised the analysis of release rates and capacity factors by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity, following the approach used for theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 289 final CCR rule analysis (see U.S. EPA, 2014). Additionally, EPA removed 13 releases categorized as “seepage” (not 36 as stated by the commenter) from the calculation of release rates and ca pacity factors, since these events are unlikely to result in cleanup. These changes address the commenter’s concern regarding the application of uniform assumptions to potentially very different types of impoundments and releases.

For the final rule, EPA a lso distinguished “big” impoundments that may have either wall breaches or other types of releases from “small” impoundments that are unlikely to have wall breaches, where classification of the impoundments in one or the other category is based on the impo undment capacity and berm height. EPA then applied the release probability and capacity factor to each category of impoundment and type of release. This change further addresses the commenter’s concern regarding the application of uniform assumptions to po tentially very different types of impoundments and releases.
EPA acknowledges that dividing the number of releases by the total number of releases and the total number of impoundment years represented in the survey universe is a simplified approach to calc ulating the release rate. However, this approach is reasonable given the available data. The calculation of the release rate in the BCA represents an appropriate analysis to identify the overall average probability of wall breaches and other releases based on publicly available historical data. Further, for the final rule analysis, EPA used baseline failure rates that reflect compliance with the recently promulgated final CCR rule (see U.S. EPA, 2014).
As noted by the commenter, EPA based the capacity facto r on the storage capacity rather than the actual volume of waste stored in the impoundment at the time of the release. EPA does not agree that this is inappropriate. First, EPA does not have information on the amount stored in the impoundments at the time that the historical releases occurred, nor information about the amount that will be stored in impoundments at the time of any future release. Calculating the average storage amount as a share of impoundment capacity and applying the amount released to tha t share is effectively equivalent to deriving the capacity factor based on the released volume as a share of the impoundment capacity. As such, it is appropriate to estimate the amount released as a share of the impoundment capacity based on historical rel eases and known information about impoundment capacity. See Section 6.1 of the BCA for a discussion of the methods used to derive capacity factors for wall breaches and other releases from big impoundments, and other releases only from small impoundments.
EPA disagrees with the commenter that EPA’s estimation of the costs associated with a release is inadequate. For the final rule analysis, EPA updated cost assumptions to incorporate more recent data from public records. The final analysis includes data for five historical impoundment failures: the three used in the proposed rule analysis, plus the Widows Creek release and the 2011 Oak Creek release in Wisconsin. These data show that comparably smaller releases such as the Oak Creek release in Wisconsin (see Chapter 6 of the BCA for discussion of this incident) can result in higher per gallon costs than larger releases such as the Kingston release. EPA found no evidence that the unit costs associated with smaller releases would be meaningfully smaller than th ose associated with releases for which costs are available.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 290 Regarding natural resource damagers, EPA addressed the commenter’s concerns about applicability of CERCLA sites by removing cases resulting from legacy pollution associated with Superfund sites fr om the data, instead basing NRD estimates on 65 cases that are applicable based on the resources affected and the general circumstances of the release. With regard to transaction costs, data from Superfund cases provide insight in the types of costs that a rise from releases and other environmental damages. These costs may include negotiating natural resource damage payments, determining responsibility among parties (i.e., the utility owner or the insurer), and litigating details regarding settlements and re mediation. These activities are relevant to the resolution of impoundment releases. In the absence of data specific to transaction costs incurred as a result of coal ash impoundment releases in public records, EPA determined that data from Superfund cases were the best available indicators of the transaction costs associated with impoundment failures. See Section 6.1.3 of the BCA for more details on this analysis.
For more information on how EPA estimated the changes in the quantity of CCR managed in impoun dments see memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis” (DCN SE05825) in the record for the final steam electric ELG.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

References
United States Environmental Protection Agency (U.S. EPA). 2014. Regulatory Impact Analysis for EPA’s 2015 RCRA Final Rule Regulating Coal Combustion Residue (CCR) Landf ills and Surface Impoundments at Coal

- Fired Electric Utility Power Plants.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 230 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

F. Avoided Costs Related to Impoundment Failures
Benefits from the proposed ELGs attributed to avoided costs related to reduced impoundment failures compris e 37

- 58% of the total benefits under the evaluated regulatory options. The EPA analysis, however, substantially overstates the potential benefit from the proposed ELGs because of the following key reasons:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 291  The estimated failure probability and direct cost analysis are inconsistent. The cost analysis is based on remedial efforts related to catastrophic failures only, but the failure probability estimates include, and are in fact dominated by, occurrence of smaller failures for which the level of remedial c osts are much lower.

 The indirect unit costs (natural resources damages and transaction costs) are most likely substantially overstated.
Since the unit costs are multiplied by the failure probabilities, the flaws in these values are magnified. For example , if the failure probability is too large by a factor of 2 and the unit costs are too large by a factor of 2, the estimated total benefits would be too large by a factor of 4. This is particularly significant because, as already described, the failure pro bability is most likely a factor of 10 too large.
Additionally, EPA’s “Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category,” EPA

- 821

- R

- 13

- 004 (April 2013), E PA

- HQ

- OW

- 2009

- 0819

- 2238 (BCA) does not describe certain aspects of the analysis well enough to follow its process, and hence be able to critique the process. These areas include:

 Estimation of the capacity factor, the ratio between the volume stored in an impoundment, and the size of the release in the event of failure. This factor is partially explained, so we are able to provide some comments.

 Estimation of the reduction in CCR volume in impoundments, which underlies the whole evaluation performed by E PA. EPA neither explains these estimates nor cites to another source, so we are unable to provide any further comment.
Comment Response:
EPA disagrees that the potential impoundment benefits are substantially overstated. The Agency found no evidence i n the publicly available data that smaller releases have smaller unit costs. In fact, EPA found some empirical evidence that comparably smaller releases such as the Oak Creek release in Wisconsin (see Section 6.1 of the final BCA for more information on th is incident) may have higher unit costs than larger releases such as the Kingston release.
For the final rule analysis, EPA expanded the data points for estimating cleanup costs, including 5 historical impoundment failures: the three used in the proposed r ule analysis, plus the Widows Creek release and the 2011 Oak Creek release in Wisconsin. The two new data points used in estimating cleanup costs had smaller volumes released with higher unit costs of cleanup. See Section 6.1 of the BCA for more details on this analysis.
EPA also disagrees with the commenter’s characterization of natural resource damages and transaction costs as “indirect costs,” and that these are significantly overstated. Again, the commenter does not provide data to support the assertion . For a response to the commenter’s assertion that the failure probability is overstated by a factor of 10, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4655

- A2 (excerpt 38).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 292 EPA agrees with the commenter that there is a difference between the release rates ass ociated with catastrophic failures (i.e., wall breaches) and other types of generally more minor releases that are more prevalent in the historical release data. For the analysis of the proposed rule, EPA had calculated one overall release rate based on al l release events, large or small. For the benefit analysis of the final rule, EPA revised the analysis of release rates by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity. Th e analysis differentiates between the types of releases both on the basis of the probability of a release, and the capacity factor (i.e., quantity of CCR released in the event of a release as a share of the impoundment capacity). For further description of this revised approach, see Section 6 of the BCA.
EPA disagrees that information the Agency provided about the analysis in the documentation that accompanied the proposed rule was insufficient. The methodology and data were extensively described in BCA. Th e capacity factor was derived based on historical releases, as was the release rate, with details provided in the BCA. EPA provided similarly detailed discussion of the basis for these parameters in the BCA for the final rule.

For more information on how E PA estimated the changes in the quantity of CCR managed in impoundments see memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis” (DCN SE05825) in the record for the final steam electric ELG.

For additional information on considerati on of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 38 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6 Avoided Costs Related to Impoundment Failures

The benefits attributed to reduced impoundment failures range from 37

- 58% of the total benefits attributed to the proposed ELG, based on Options 3 and 4 for which air quality related benefit estimates are provided (US EPA, 2013d, Table 10

- 1). These avoided costs derive from US EPA's expectation that the amount of CCRs managed in impoundments will decline under the proposed ELG. US EPA (2013d, Section 7) then used the impoundment release survey data summarized in US EPA (2010b) to estimate an aggregate annua l occurrence rate for CCR impoundment releases (0.58%) and an average release as a percentage of the impoundment capacity (6.45%). These factors were used, along with estimated costs that would be incurred by steam electric powerEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 293 plants to address impoundm ent failures, to estimate the reduced costs to the utilities for addressing impoundment failures that would be attributed to the proposed ELG. This estimated reduction was then viewed as a benefit attributable to the proposed ELG. This analysis substantial ly overstates the potential benefit from the proposed ELG because of the following key reasons:

 The estimated failure probability and direct cost analysis are inconsistent. The cost analysis is based on remedial efforts related to catastrophic failures onl y, but the failure probability estimates includes, and is in fact dominated by, occurrence of smaller failures for which the level of remedial costs are much lower.

 The indirect unit costs (natural resources damages and transaction costs) are most likely

s ubstantially overstated.
Since the unit costs are multiplied by the failure probabilities, the flaws in these values are magnified. For example, if the failure probability is too large by a factor of 2 and the unit costs are too large by a factor of 2, the estimated total benefits would be too large by a factor of 4. This is particularly significant because, as described below, the failure probability is most likely a factor of 10 too large.
Additionally, US EPA (2013d) does not describe certain aspects of the analysis well enough to follow their process, and hence be able to critique the process. These areas include:

 Estimation of the capacity factor, the ratio between the volume stored in an impoundment and the size of the release in the event of failure. This factor is partially explained, so we are able to provide some comments below.

 Estimation of the reduction in CCR volume in impoundments, which underlies the whole evaluation performed by the US EPA. US EPA neither explains these estimate nor cites to another source, so we are unable to provide any further comment.

6.1 Failure Probability
US EPA (2013d) combines all releases reported in US EPA (2010b) together to generate an aggregate annual release probability, ignoring the character of the releases. T his contrasts starkly with the approach used by US EPA (2010b), in which the releases were divided into three categories: seepage failures, significant failures, and catastrophic failures. Of the 42 releases listed in Exhibit 5B

- 1 in US EPA (2010b), 36 wer e seepage failures, 5 were significant failures, and only 1 was a catastrophic failure. Lumping all of the releases together into one release failure probability most likely overstates the failure costs, because the cost estimates (discussed below)

reasona bly apply only to the larger failures ‒ those classified as significant or catastrophic by US EPA (2010b).
Additionally, of the five events identified by US EPA (2010b) as significant failures, two of them were failure of the same embankment, the second fa ilure occurring a year after the first and attributed to a faulty repair of the damage from the prior year. While these are indeed two failures, they are not two independent failures, and the statistical approach used by US EPA (2013d) is not valid if the failure events are not independent. Further, one of the significantEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 294 events was not a sudden failure. PacifiCorp Energy (Skinner, 2009) reported Item 22 in US EPA (2010b) Exhibit 5B

- 1 at the Naughton plant as a release that happened over the course of sever al years. Thus, out of six release events identified by US EPA (2010b) as significant or catastrophic, only four are actually independent release events and associated with costs applicable to the US EPA (2013d) evaluation. Considering only these four even ts in US EPA (2013d), Eq. 7

- 1 changes the annual failure rate from 0.58% to 0.055%, a 10

- fold reduction. Applying just this correction, before considering the overestimation of costs discussed below, would reduce the benefits attributable to reduced impoun dment failures, and hence benefits attributable to the proposed ELG, substantially.
US EPA (2013d) chose to use a very simplistic approach to model failure risk, simply dividing the total number of releases by the number of impoundment years represented in the survey universe. In contrast, US EPA (2010b) used the same data to estimate the parameters of a Poisson distribution, which is a more appropriate approach to modeling failures over a universe of independent entities, though it leads to a more complex benefits analysis. US EPA should justify their selection of this simplistic failure analysis approach.

6.2 Capacity Factor
US EPA (2013d) describes this factor as the ratio of the spill volume to the impoundment capacity, stated as a percentage. This ratio could be a reasonable attempt to characterize release volume variability as a function of impoundment size, but there are problems with the implementation of this calculation.
First, some of the entries in US EPA (2010b) are the impoundment capacity and o thers are the storage capacity as of the survey date; none are the stored volume as of the release incident, which is the only storage value that is relevant to the method employed by US EPA (2013d). If the capacity factor is really computed as a percentag e of capacity, as stated by US EPA (2013d), then US EPA should explain why they expect that the impoundment capacities will change as a result of the proposed ELG. Perhaps US EPA expects that total installed impoundment capacity will decline, but we were n ot able to find documentation of US EPA's evaluation.
Second, the fundamental concept of applying this factor to all the releases identified in US EPA (2010b) Exhibit 5B

- 1 is flawed. It does not apply at all to the 36 seepage releases, as those releases ar e not spills that might be expected to be related to either capacity or stored volume at the time of a release.
Finally, the calculation of the capacity factor is difficult to follow, as illustrated by the following:

 US EPA (2013d) claims that both capacit y and release volume are provided in US EPA (2010b) for 15 of the 42 documented releases, data from which US EPA (2013d) calculated that the average release was 6.45% of the capacity. Exhibit 5B

- 1 in US EPA (2010b) provides release volume for 15 of the doc umented releases, but both capacity and release volume for only 10 of the documented releases. If US EPA (2013d) supplemented the data provided in US EPA (2010b), the source should be documented.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 295  US EPA (2013d) stated that the range of capacity factors is from less than 0.01% to 37.9%, with an average of 6.45%. Using the values in US EPA (2010b) Exhibit 5B

- 1, the range of capacity factors is from well less than 0.01% to 767%. The largest value comes from Item 27 in US EPA (2010b) Exhibit 5B

- 1, where there w as a release of 100 million gallons over a period of several days from an impoundment with a capacity of 12.75 million gallons above grade (Murphy, 2009). Considering this large capacity factor alone would produce an average capacity factor of about 50% ov er 15 events or about 70% over 11 events. This large release relative to the impoundment capacity is probably not representative of typical release scenarios and should probably not be incorporated into the calculation without some adjustment. If US EPA (2 013d) applied some adjustment to the individual release capacity factors, such adjustment should be described and documented.
US EPA should reconsider their use of the capacity factor and either develop the correct parameters or develop an alternate approa ch.

6.3 Failure Costs
US EPA (2013d) estimated cleanup costs for CCR releases in terms of three components ‒ direct cleanup, natural resource damages, and transaction costs ‒ as follows:

 Direct cleanup costs (Section 7.1.3.1) were based on three cases ‒ tw o for power plant CCR releases and one for a mine impoundment. The three costs ranged from $0.26/gal (released gallons) to $1.16/gal, and averaged $0.62/gal.

 Natural resource damage (NRD) costs (Section 7.3.1.2) were estimated by diving the median of the N RD costs reported by Israel (2006), approximately $4 million, by the median total cost for the three case studies used to develop the direct cleanup cost estimate, $65 million. This produced a value of 6% for NRD costs as a percentage of cleanup costs. Thi s percentage was then applied to the cleanup cost of $0.62/gal to produce an NRD estimate of $0.04/gal.

 Transaction costs were based on information presented in four studies, all from the mid

1990s, of transaction costs for sites regulated under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA, commonly known as Superfund). Based on these four studies, US EPA (2013d) estimated that transaction costs were about 37% of cleanup costs, which, when applied to the cleanup cos t estimate, comes to $0.23/gal. These three cost elements sum to $0.89/gal.
There are numerous issues with this methodology and with specific estimates that call this calculation into serious question and indicate that the benefits are substantially overst ated. US EPA should consider the comments presented below and reevaluate this benefit computation.

6.3.1 Direct Cost Analysis
The direct cleanup cost analysis presented by US EPA (2013d) applies to events that involve the sudden release of impoundment contents, generally due to an embankment failure. For these types of events, the US EPA (2013d) cost analysis is generally reasonable, though it does notEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 296 recognize that such costs are not always incurred, even for what US EPA (2010b) termed significant rel eases. For example, IPL (Marsan, 2009) reported that no released materials were recovered for release items 13 and 14 in US EPA (2010b) Exhibit 5B

- 1.
A more significant issue with the direct cost analysis, however, is that it potentially applies to only 6 of the 42 release events identified in the 2009 survey, an issues discussed above under the failure probability heading. The remaining 36 events are seepage releases, which generally do not involve the kinds of cleanup activities associated with the large r embankment failure releases. Additionally, the NRD and transaction cost categories would generally not apply to these seepage releases.
Therefore, US EPA should either adjust their failure probability estimates to be consistent with the cost estimates or adjust the cost estimates to be consistent with their approach to estimating the failure probability. Either adjustment will lead to a substantial reduction in the total benefits attributed to reduced impoundment failures.

6.3.2 NRD Cost Analysis

The NRD cost analysis is flawed in that the universe of events from which the median NRD cost was taken (the study by Israel, 2006) is not the same as, and not even closely related to, the universe of events being evaluated as potential CCR impoundment releases. W e would expect NRD costs to be relatively low compared to NRD costs related to sites regulated under CERCLA, because the environmental damages for sites regulated under CERCLA have often been in place for many years, whereas the damages related to CCR impo undment failures will generally be of shorter duration. US EPA should either provide further justification for the NRD cost value or modify the value.

6.3.3 Transaction Cost Analysis
The transaction cost analysis is flawed in that the CERCLA program transa ction costs that were evaluated in the studies cited bear no resemblance to the expected transaction costs for CCR impoundment releases. The reason there were so many studies of CERCLA transaction costs in the mid

- 1990s is that there was substantial concer n that transaction costs were excessively high. There were major elements of CERCLA transaction costs at that time that simply do not exist for CCR impoundment releases. For example:

 CERCLA sites often have multiple responsible parties. Determining how the costs are allocated among the parties can be a substantial transaction cost. CCR releases more commonly have a single clearly identified responsible party.

 CERCLA liabilities are commonly related to past events for which the records are less than clear. S ubstantial CERCLA transaction costs were related to evaluating whether potentially responsible parties actually bore any liability. The events addressed by the ELG analysis are future events for which the responsible party will be easily identifiable.

 CERC LA established liability for past events that may have been legal at the time they occurred. Some of the transaction costs were related to disputing the validity of theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 297 statute itself. Such costs are unlikely to occur in relationship to CCR impoundment rel eases.
We would expect transaction costs for CCR releases from impoundments to be very low. US EPA should either provide further justification for the transaction cost value or modify the value.
Additionally, we were not able to find the reference "U.S. EP A Analysis, 2013" cited in the footnotes for Tables 7

- 2 and 7

- 3 in US EPA (2013d). Please clarify the citation.

6.4 Benefit Calculation
The annual expected cost for each impoundment, in the absence of the proposed ELGs, is calculated as the product of the annual release probability × impoundment capacity × capacity factor (proportion of contents released) × the cost per gallon released. These individual facility costs were then totaled for the universe of regulated facilities using CCR impoundments to get t he total baseline cost. Estimated benefits attributed to the proposed ELG then apparently derive from the expected reduction in CCR waste volume in impoundments expected to be caused by the proposed ELG. That is, the same calculation is performed under the proposed ELG conditions, but with the lower volume of CCR contained in impoundments. This basic calculation approach is reasonable, though the flawed parameter estimates, as described above, lead to a substantial overestimation of benefits.

6.5 Summary

In summary, US EPA (2013d) used a failure probability that substantially overstates the probability of impoundment failures that are potentially relevant to the ELG benefits and overestimated the costs associated with cleanup, leading to a substantial overes timation of the benefits related to potential CCR impoundment failures that might be attributable to the proposed ELG.
Comment Response:
The commenter asserts that the potential impoundment benefits are substantially overstated, and challenges several key aspects of the impoundment analysis, including the release rate, capacity factor, release costs, and benefit calculation. EPA disagrees with the commenter’s general conclusion that impoundment benefits are substantially overstated, and with several of the commenter’s key assertions, but agrees with the commenter on some aspects of the analysis, as described in more detail below.
First, the Agency found no evidence in the publicly available data that smaller releases have smaller unit costs. In fact, EPA found some empirical evidence that comparably smaller releases such as the Oak Creek release in Wisconsin (see Section 6.1 of the final BCA for more information on this incident) may have higher unit costs than larger releases such as the Kingston release . For the final rule analysis, EPA expanded the data points for estimating cleanup costs, including 5 historical impoundment failures: the three used in the proposed rule analysis, plus the Widows Creek release and the 2011 Oak Creek release in Wisconsin. The two new data pointsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 298 used in estimating cleanup costs had smaller volumes released with higher unit costs of cleanup. See Section 6 of the BCA for more details on this analysis.
EPA also does not agree with the commenter’s characterization of natural re source damages and transaction costs as “indirect costs,” nor that these are significantly overstated. Additionally, EPA disagrees with the commenter that it has not provided enough information about the analysis in the documentation. The methodology and d ata are well

- documented in the BCA and EPA expanded on the extensive documentation for the final rule. The capacity factor is based on historical releases, as is the release rate. Section 6 of the BCA for the final rule details the basis for these paramete rs.
EPA agrees with the commenter that there is a difference between the release rates associated with catastrophic failures (i.e., wall breaches) and other types of generally more minor releases that are more prevalent in the historical release data. As d escribed in more detail below, EPA has revised the analysis of the final rule to account for these differences.
The specific assumptions, methodologies, and data sources challenged by the commenter are described in more detail below.
Failure Probability
The commenter asserts that it is inappropriate for EPA to combine all 42 historical releases to calculate an aggregate annual release probability. EPA agrees with the commenter that there is a difference between the release rates associated with catastroph ic failures (i.e., wall breaches) and other types of generally more minor releases that are more prevalent in the historical release data. For the benefit analysis of the final rule, EPA revised the analysis of release rates by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity. The analysis differentiates between the types of releases both on the basis of the probability of a release, and the capacity factor (i.e., quantity of C CR released in the event of a release). Additionally, EPA removed 13 releases categorized as “seepage” (not 36 as stated by the commenter) from the calculation of release rates, since these events are unlikely to result in cleanup. For further description of this revised approach, see Section 6.1 of the BCA.
The commenter also states that “the cost estimates (discussed below) reasonably apply only to the larger failures ‒ those classified as significant or catastrophic” and that only four of the historical release events “are actually independent release events and associated with costs applicable to the USEPA evaluation.” The commenter asserts that restricting the release probability to four events reduces the probability from 0.58% to 0.055%, a 10

- fold red uction. However, EPA does not agree that it should consider only the four catastrophic and independent events. First, expenditures associated with smaller releases may also be avoided through implementation of the ELGs. Aggregated across many releases, the avoided costs of small releases may be significant. Secondly, releases that are not independent (for example, the release that was the result of a faulty repair of a previous failure) still result in cleanup costs, damages, and litigation costs. If the re gulation reduces the probability of these types of releases, then this represents a benefit to society.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 299 EPA agrees with the commenter that dividing the number of releases by the total number of releases and the total number of impoundment years represented in the survey universe is a simplified approach to calculating the release rate. However, data and resource methodology constrain EPA’s ability to conduct a more complex modeling approach. The calculation of the release probability in the BCA represents a n appropriate analysis to identify the overall average probability of wall breaches and other releases based on publicly available historical data.
Capacity Factor
For more information on how EPA estimated the changes in the quantity of CCR managed in impo undments see memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis” (DCN SE05825) in the record for the final steam electric ELG.
As noted by the commenter, EPA based the capacity factor on the storage capacity rather than the actual volume of waste stored in the impoundment at the time of the release. EPA maintains that this is reasonable and appropriate. First, EPA does not have information on the amount stored in the impoundments at the time that the historical releases occurred, no r information about the amount that will be stored in impoundments during future predicted releases. While it may be possible to determine the average storage amount as a share of impoundment capacity and apply the amount released to that share, this would effectively be equivalent to deriving the capacity factor based on the released volume as a share of the impoundment capacity. EPA’s approach of estimating the amount released as a share of the impoundment capacity based on historical releases and known i nformation about impoundment capacity is therefore appropriate. See Section 6.1 of the BCA for a complete discussion of the methods used to derive capacity factors for wall breaches and other releases from big impoundments, and other releases only from sma ll impoundments.
As noted above, EPA agrees that seepage events are not relevant to this analysis, and has removed 13 such events (not 36 as stated by the commenter) from the calculation of capacity factor. For the final rule analysis, EPA has modified the approach to calculating the capacity factor by distinguishing between wall breaches and other types of smaller releases (excluding seepage events). See Section 6.1 of the BCA for a description of these calculations and the underlying data.
As noted by the commenter, the survey responses indicate that the 2005 release from Martin’s Creek released a volume of 100 million gallons, but that the impoundment capacity was 40 acre

feet or about 13 million gallons, yielding a capacity factor of 767%. As such, EPA m odified the impoundment capacity in the dataset to 1,085 acre

- feet or about 354 million gallons based on information in the 2009 Dam Assessment Report for the facility. EPA has clarified this modification in the final BCA.

Failure Costs
EPA disagrees that the cleanup costs, NRD, and litigation cost estimates result in benefits that are “substantially overstated.” First, EPA disagrees that the cleanup costs apply to only sudden large embankment failure releases. While EPA recognizes that cleanup costs will g enerally notEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 300 be applicable to seepage events (and has removed seepage events from the final rule analysis), EPA notes that there are 13 seepage events in the historical release data rather than 36 as stated by the commenter. Some non

- wall breach releases w ill entail cleanup costs and as such it is appropriate to include these releases in the analysis and apply cleanup costs to them.
The commenter states that CERCLA cases are not representative of the NRD resulting from CCR impoundment releases. To address t his comment, EPA removed CERCLA cases from the data used to calculate NRD. See Section 6.1.3 of the BCA for more information on this revised approach.
EPA disagrees with the commenter that transaction costs for CCR releases would be very low, and the comme nter does not provide evidence to support this assertion. EPA has conducted additional searches to identify data on transaction costs incurred as a result of coal ash impoundment releases, but none is publicly available. Data from Superfund cases provide t he most comprehensive insight in the types of costs that arise from releases and other environmental damages. These costs may include negotiating natural resource damage payments, determining responsibility among parties (i.e., the utility owner or the ins urer), and litigating details regarding settlements and remediation. As such, EPA determined that these were the best available data to indicate the potential magnitude of transaction costs associated with impoundment failures.

Note that EPA (2013) refers to the proposed rule analysis.

Benefit Calculation
As noted by the commenter, benefits from the rule “derive from the expected reduction in CCR waste volume in impoundments expected to be caused by the proposed ELG. That is, the same calculation is perform ed under the proposed ELG conditions, but with the lower volume of CCR contained in impoundments.” EPA disagrees that its analysis of the proposed rule substantially overestimated the benefits. EPA provided responses above to concerns regarding individual components of the calculations, describing changes the Agency made for the final rule analysis, where appropriate. To the extent that parameter estimates determine the final benefit values, these changes also address the commenter’s comment regarding any s ubstantial overestimate of the benefits.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 41 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 301 Comment Excerpt:

Avoided Co sts Related to Impoundment Failures Benefits from the proposed ELGs attributed to avoided costs related to reduced impoundment failures comprise 37

- 58% of the total benefits under the evaluated regulatory options. The US EPA analysis, however, substantiall y overstates the potential benefit from the proposed ELGs because of the following key reasons:

 The estimated failure probability and direct cost analysis are inconsistent. The cost analysis is based on remedial efforts related to catastrophic failures onl y, but the failure probability estimates includes, and is in fact dominated by, occurrence of smaller failures for which the level of remedial costs are much lower.

 The indirect unit costs (natural resources damages and transaction costs) are most likely

s ubstantially overstated.
Since the unit costs are multiplied by the failure probabilities, the flaws in these values are magnified. For example, if the failure probability is too large by a factor of 2 and the unit costs are too large by a factor of 2, the estimated total benefits would be too large by a factor of 4. This is particularly significant because, as described in Section 6, the failure probability is most likely a factor of 10 too large.
Additionally, US EPA (2013c) does not describe certain aspe cts of the analysis well enough to follow their process, and hence be able to critique the process. These areas include:

 Estimation of the capacity factor, the ratio between the volume stored in an impoundment and the size of the release in the event of fa ilure. This factor is partially explained, so we are able to provide some comments.

 Estimation of the reduction in coal combustion residue (CCR) volume in impoundments, which underlies the whole evaluation performed by the US EPA. US EPA neither explains these estimates nor cites to another source, so we are unable to provide any further comment.
Comment Response:
EPA disagrees that the potential impoundment benefits are substantially overstated. The Agency found no evidence in the publicly available da ta that smaller releases have smaller unit costs. In fact, EPA found empirical evidence that comparably smaller releases such as the Oak Creek release in Wisconsin (see Section 6.1 of the BCA for more information on this incident) may have higher unit cost s than larger releases such as the Kingston release.
For the final rule analysis, EPA expanded the data points for estimating cleanup costs, including 5 historical impoundment failures: the three used in the proposed rule analysis, plus the Widows Creek re lease and the 2011 Oak Creek release in Wisconsin. The two new data points used in estimating cleanup costs had smaller volumes released with higher unit costs of cleanup. See Section 6.1 of the BCA for more details on this analysis.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 302 EPA also disagrees wit h the commenter’s characterization of natural resource damages and transaction costs as “indirect costs,” or that values used by EPA are significantly overstated. Again, the commenter does not provide data to support the assertion. For a response to the

co mmenter’s assertion that the failure probability is overstated by a factor of 10, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 (excerpt 38).
EPA recognizes that there is a difference between the release rates associated with catastrophic failures (i.e., wall breaches) and other types of generally more minor releases that are more prevalent in the historical release data. For the analysis of the proposed rule, EPA had calculated one overall release rate based on all release events, large or small. For the benefit analysis of the final rule, EPA revised the analysis of release rates by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity. The analysis differentiates between the typ es of releases both on the basis of the probability of a release, and the capacity factor (i.e., quantity of CCR released in the event of a release as a share of impoundment capacity). For further description of this revised approach, see Section 6.1 of th e BCA for the final rule.
Finally, EPA disagrees with the commenter that the documentation that accompanied the proposed rule provided insufficient details about the analysis to allow external review and comments on the analysis. The BCA described the meth odology and data extensively, including by providing a listing of individual observations used to derive the capacity factor and the release rate. The BCA also described the basis for these parameters. EPA expanded on this already extensive documentation f or the final rule. See Chapter 6 of the BCA for the final rule for details.
For more information on how EPA estimated the changes in the quantity of CCR managed in impoundments see memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis ” (DCN SE05825) in the record for the final steam electric ELG.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

EPA also disagrees with the commenter’s characterization of natural resource damages and transaction costs as “indirect costs,” or that values used by EPA are significantly overstated. Again, the commenter does not provide data to support the assertion. For a respo nse to the commenter’s assertion that the failure probability is overstated by a factor of 10, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 (excerpt 38).
EPA recognizes that there is a difference between the release rates associated with catastrophic fa ilures (i.e., wall breaches) and other types of generally more minor releases that are more prevalent in the historical release data. For the analysis of the proposed rule, EPA had calculated one overall release rate based on all release events, large or s mall. For the benefit analysis of the final rule, EPA revised the analysis of release rates by distinguishing between wall breaches and other types of events that are likely to release a smaller share of impoundment capacity. The analysis differentiates be tween the types of releases both on the basis of the probability of aEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 303 release, and the capacity factor (i.e., quantity of CCR released in the event of a release as a share of impoundment capacity). For further description of this revised approach, see Sect ion 6.1 of the BCA for the final rule.
Finally, EPA disagrees with the commenter that the documentation that accompanied the proposed rule provided insufficient details about the analysis to allow external review and comments on the analysis. The BCA descr ibed the methodology and data extensively, including by providing a listing of individual observations used to derive the capacity factor and the release rate. The BCA also describes the basis for these parameters.

For more information on how EPA estimated the changes in the quantity of CCR managed in impoundments see memorandum titled “Avoided Impoundment Failures Capacity Reduction Analysis” (DCN SE05825) in the record for the final steam electric ELG.

Commenter Name: Jerry Schwartz Commenter Affiliati on: American Forest & Paper Association (AF&PA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4656

- A2 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
the agency overesti mated the benefits resulting from reduced coal combustion residuals (CCR) that will be placed in impoundments by using questionable methods and assumptions.
Comment Response:
EPA disagrees that it has overestimated the impoundment benefits. The commente r did not provide examples of data or methods that the commenter deemed “questionable” and as such EPA cannot provide a more detailed response.
However, see EPA’s answer to other, more detailed, comments on this analysis (e.g. response to DCN EPA

- HQ

- OW

- 200 9

- 0819

- 4655

- A2, Excerpt Number 38) for a discussion of methods and assumptions.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number Number 3 (in Comme nt Code 6.e).

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 304 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 36 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Reduced risk of impoundment failures due to changes in the use of impoundments: Benefits to the proposed steam electric ELGs are dominated by the benefit for reduced impoundment failures

— this single benefit accounts for nearly half o f the value of benefits monetized for Option 4. EPA’s estimate of the value of avoided failures is based on a national average probability of impoundment failures (a 0.58 percent chance of failure in each year) applied to all impoundments. EPA also present s, but does not include in its final valuation, an alternative methodology that takes account of specific differences in impoundment characteristics. (The Benefit

‐ Cost Analysis notes that, “because of the limited data available to develop and validate the statistical model, EPA did not use the model in the primary benefit estimates presented in this chapter but instead relied on historical failure rates.” 76 ) This method raises the benefit of avoided impoundment failures by a factor of 2.7 to 3.2 depending o n the regulatory option, such that for Options 4 and 5 this benefit rises from $295 million to $918 million. 77 Using this alternative method, total Option 4 benefits rise to $1,228 million, and EPA’s benefit

‐ cost ratio for this Option rises from 0.44 to 0. 89.
EPA’s method also fails to account for two other important, closely related categories of benefits associated with the rule. First, EPA expressly notes in the Benefit

‐ Cost Analysis that its analysis “does not account for the effect of best management practices (BMPs)

— including integrity inspections and preventive maintenance

— that would help reduce the probability of impoundment failures.” 78 Second, EPA’s method does not account for the costs of any litigation that may occur around the cleanup of an imp oundment failure that would be avoided as a result of the rule. EPA does not attempt to quantify, let alone monetize, either of these two categories of benefits, both of which would also result from the rule’s reduction in impoundment failures.

76 Benefit

‐ Cost Analysis, p.7

‐ 2.

77 Benefit

‐ Cost Analysis, Appendix G.

78 Id. at 7

‐ 2.
Comment Response:
As noted by the commenter and discussed in the proposed rule BCA (Appendix G), the simplified approach may result in an underestimate of benefits and EPA also ag rees that the use of a single release rate across all impoundments does not account for all variables that may affect the risk of impoundment releases or their consequences. However, data limitations limit EPA’s ability to develop a more sophisticated mode ling of the risk of impoundment failure at this time.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 305 For the final rule, EPA modified the approach to incorporate consideration of the impoundment characteristic and type of release, following the approach the Agency used for the final CCR rule analysis ( U.S. EPA, 2014). EPA distinguished between “big” impoundments which may be subject to both large

- scale structural failures and other releases, and “small” impoundments which may have smaller non

- wall breach (i.e., other) releases. The Agency calculated sep arate release rates for each impoundment category and release type. For further description of this revised approach, see Section 6.1 of the BCA. Note that the release rates used for the ELG analysis reflect compliance with inspections and management pract ices required under the final CCR rule.
The commenter states that EPA does not account for the costs of litigation that may occur around the cleanup of an impoundment failure; however, this is an incorrect characterization of the analysis. EPA includes lit igation costs (or “transaction costs”) in the costs associated with impoundment failures, together with cleanup costs and natural resource damages. These transaction costs include the costs associated with negotiating NRD, determining responsibility among potentially responsible parties, and litigating details regarding settlements and remediation. The costs do not include fines, cleanup costs, damages, or other costs that constitute transfers or are already accounted for in the other categories analyzed se parately.
For additional information on consideration of benefits in the development of the final ELGs, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3 (in Comment Code 6.e).

References:
United States Environmental Protection Agency (U.S. EPA). 2014. Regulatory Impact Analysis for EPA’s 2015 RCRA Final Rule Regulating Coal Combustion Residue (CCR) Landfills and Surface Impoundments at Coal

- Fired Electric Utility Power Plants.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjust ice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 37 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Reduced risk of impoundment failures due to changes in the use of impoundments: Benefits to the proposed steam electric ELGs are dominated by the benefit for reduced impoundment failures

— this single benefit accounts for nearly half of the value of benefits monetized for Option 4. EPA’s estimate of the value of avoided failures is based on a national average probability of impoundment failures (a 0.58 percent chance of failure in each year) applied to all impoundments. EPA also presents, but does not include in its final valuation, an alternativeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 306 methodology tha t takes account of specific differences in impoundment characteristics. (The Benefit

‐ Cost Analysis notes that, “because of the limited data available to develop and validate the statistical model, EPA did not use the model in the primary benefit estimates presented in this chapter but instead relied on historical failure rates.” 76 ) This method raises the benefit of avoided impoundment failures by a factor of 2.7 to 3.2 depending on the regulatory option, such that for Options 4 and 5 this benefit rises from $295 million to $918 million. 77 Using this alternative method, total Option 4 benefits rise to $1,228 million, and EPA’s benefit

‐ cost ratio for this Option rises from 0.44 to 0.89.
EPA’s method also fails to account for two other important, closely relat ed categories of benefits associated with the rule. First, EPA expressly notes in the Benefit

‐ Cost Analysis that its analysis “does not account for the effect of best management practices (BMPs)

— including integrity inspections and preventive maintenance

— that would help reduce the probability of impoundment failures.” 78 Second, EPA’s method does not account for the costs of any litigation that may occur around the cleanup of an impoundment failure that would be avoided as a result of the rule. EPA does not attempt to quantify, let alone monetize, either of these two categories of benefits, both of which would also result from the rule’s reduction in impoundment failures.

76 Benefit

‐ Cost Analysis, p.7

‐ 2.

77 Benefit

‐ Cost Analysis, Appendix G.

78 I d. at 7

‐ 2.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 36.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 307 29.h. Benefits

– Air

- related benefits

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number : EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 201 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
By internalizing the externality costs of the power plants' wastewater, a fraction of 1 p ercent of electricity generation will switch to cleaner energy sources. Under Option 3 in the plan, this will reduce CO2 emissions by as much as taking roughly 300,000 cars off the road, as many as Washington, D.C., or Boston has.
Option 4 would reduce ab out double that amount of CO2 emissions, which is equivalent to all the registered cars in both cities combined.
It should be noted also that the benefit and cost analysis uses the Interagency Working Group on Social Cost of Carbon’s 2010 estimates, which were also updated a month after that analysis came out. So the new Social Cost of Carbon estimates are about 60 percent higher than before, and when this is taken into account, the total monetized benefits will be about 5 or 10 percent higher. And I thin k that's worth noting, if someone hasn't already.
Comment Response:
EPA thanks the commenter for putting the emission changes in perspective and for noting the changes in the Social Cost of Carbon estimates.
For the final rule, EPA again estimated reductions in air emissions associated with changes in generation profile, auxiliary power, and transportation. The final rule will reduce annual CO 2 emissions by approximately 1.8 to 4.8 million metric tons, or the equivalent of emissions from roughly 380 ,000 to 1 million cars (at 4.75 metric tons CO 2 e per vehicle per year).

EPA noted the 2013 revisions to the Social Cost of Carbon estimates and used these new values to estimate the benefits of CO 2 emission reductions associated with ELG implementation (IW GSCC, 2013). See Chapter 7 of the BCA for details.

References:
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2013. Technical Update of the Social Cost for Regulatory Impact Analysis under Executive Order 12866. Revi sed November 2013.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 308 Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The Environmental Protection Agency (EPA) is proposing a regulation on discharges from certain steam electric power plants. 1 EPA believes the rule will result in carbon dioxide reductions. Carbon dioxide em issions matter because carbon dioxide is an important greenhouse gas. But instead of examining the impact on global temperature or sea level

— as EPA had done in similar analyses in the past

— for the present rule EPA quantifies the alleged benefits of emissio ns reduction by using a metric called the “social cost of carbon.” EPA’s omission of the actual impacts on climate, such as the impact on temperature and sea level rise, is arbitrary and inappropriate. Furthermore, EPA’s use of the social cost of carbon is also inappropriate, because the three models EPA uses

— according to a recent peer

- reviewed paper by an MIT economist in a prestigious journal

— are themselves “close to useless,” because they generate estimates of the social cost of carbon using “damage func tions” that are “arbitrary” and not calibrated to observations or even based on any underlying economic theory. 2

IMPACT OF CARBON DIOXIDE EMISSIONS
According to EPA, carbon dioxide is an important greenhouse gas. EPA states in the benefit and cost analysis that:

CO 2 is an important greenhouse gas that is linked to climate changes effects, including: an increase in temperature; sea level rise; changes in weather patterns toward an intensified water cycle with stronger floods and droughts; and stress on ecosy stems, especially in the Arctic, mountain and tropical areas, resulting in the shift of species habitat range. 3

Despite EPA’s explanation that carbon dioxide is linked to climate change effects such as “an increase in temperature” and “sea level rise,” EPA ’s analysis omits any analysis of the actual changes the proposed rule would have on these specific factors. This is an arbitrary and inappropriate omission, inconsistent with past analyses conducted by EPA.
For example, EPA and the National Highway Traffi c Safety Administration’s (NHTSA) 2017 and Later Model Year Light

- Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards , analyzed these climate change factors. As EPA explained:

EPA examined the reductions in CO2 and other GHGs associated with this rulemaking and analyzed the projected effects on atmospheric CO2 concentrations, global mean surface temperature, sea level rise, and ocean pH which are common variables used as indicators of climate change. The analysis projects that the final rule will reduce atmospheric concentrations of CO2, global climate warming, ocean acidification, and sea level rise relative to the referenceEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 309 case. Although the projected reductions and improvements are small in comparison to the total projected climate change, they are quantifiable, directionally consistent, and will contribute to reducing the risks associated with climate change.

... EPA determines that the projected reductions in atmospheric CO2, global mean temperature, sea level rise, an d ocean acidification are meaningful in the context of this action. The results of the analysis demonstrate that relative to the reference case, by 2100 projected atmospheric CO2 concentrations are estimated to be reduced by 3.21 to 3.58 part per million b y volume (ppmv), global mean temperature is estimated to be reduced by 0.0074 to 0.0176°C, and sea

- level rise is projected to be reduced by approximately 0.071

- 0.159 cm, based on a range of climate sensitivities (described below). The analysis also demons trates that ocean pH will increase by 0.0017 pH units by 2100 relative to the reference case (ie, reduced acidification).
This was not the only rule that looked at actual climate change impact on temperature and sea level rise. EPA also conducted this anal ysis in the Greenhouse Gas Emissions Standards and Fuel Efficiency Standards for Medium

- and Heavy

- Duty Engines and Vehicles rule, the Light

Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standard rule, and the Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program rule.
In the past, EPA has acknowledged that its estimated impact of a rule on temperature change is “small,” but EPA nevertheless quantified these climate change indicators that it c laimed were (part of) the justification for the rule. EPA should quantify these same climate change indicators for this rule.

1 Environmental Protection Agency, Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point S ource Category , 78 Fed. Reg. 34432, June 7, 2013.

2 See Robert S. Pindyck, “Climate Change Policy: What Do the Models Tell Us?” Journal of Economic Literature, September 2013.

3 Environmental Protection Agency, Benefit and Cost Analysis for the Proposed Effl uent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category , Apr. 2013.
Comment Response:
The commenter suggests that EPA has omitted the actual impacts on climate, including temperature changes and sea level rise, of the final rule. While EPA has not explicitly reported changes in temperature or sea level rise, these impacts were not excluded. In fact, these changes are implicitly incorporated into the social cost of carbon values used by EPA in estimating theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 310 impact of changes in CO 2 emissions under the final rule (IWGSCC, 2010; IWGSCC, 2013). EPA recognizes that other analyses have directly reported changes in climate change indicators but for this analysis EPA followed the findings of the Interagency Working Group on Social Cost of Carbon (IWGSCC) and reported the impact of the final rule on climate change using the social cost of carbon values. The goal of the IWGSCC was to determine a transparent and defensible method for estimating values, designed for the rulemaking process, that would lead to consistent benefits estimations across agencies (IWGSCC, 2010; GAO, 2014a). EPA’s use of the Social Cost of Carbon for the steam electric ELG analysis is consistent with that in other regulatory impact analyses (GAO, 2014b). EPA maintains that the approach is appropriate and provides reasoned benefit estimates to inform policy decisions.
Regarding the critiques leveled against the basis and development of the SCC, including those in the Pindyck (2013) paper cited by t he commenter, refer to detailed discussion in Response to Comments: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866 (IWGSCC, 2015)
For information on the role of benefits analysis in establishing effluent limitations based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

References:
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2010. Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866. February 2010.
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2013. Technical Update of the Social Cost for Regulatory Impac t Analysis under Executive Order 12866. Revised November 2013.
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2013. Response to Comments: Social Cost for Regulatory Impact Analysis under Executive Order 12866. July 2 015.
Government Accountability Office (GAO). 2014a. Development of Social Cost of Carbon Estimates, GAO

- 14

- 663, July 24, 2014.

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 3 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 311 Comment Excerpt:

THE USE OF THE SOCIAL COST OF CARBON TO ASSESS REDUCTIONS IN CARBON DIOXIDE EMISSIONS IS NOT APPROPRIATE

Inst ead of providing the public with valuable information concerning actual climate change indicators, EPA estimated the benefits of carbon dioxide reduction using the social cost of carbon (SCC).
According to EPA:
The SCC is an estimate of the monetized damag es associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services due to climate change. 4

The SCC, however, it not an appropriate measure of climate change impacts. It is an arbitrary calculation that is not based in actual economic theory according to the peer reviewed literature.
According to a recent peer

- re viewed paper by MIT economist Robert Pindyck, the so

- called Integrated Assessment Models (IAMs), three of which the Interagency Working Group on Social Cost of Carbon used to estimate the SCC, are literally made up and not based on theory.
According to Pro fessor Pindyck, the “ developers of IAMs can do little more than make up functional forms and corresponding parameter values. And that is pretty much what they have done.” 5

Pindyck further explains:
Most IAMs (including the three that were used by the Inter agency Working Group to estimate the SCC) relate the temperature increase T to GDP through a “loss function” L(T), with L(0) = 1 and L’(T ) < 0. For example, the Nordhaus (2008) DICE model uses [an] inverse

- quadratic loss function...
Weitzman (2009) suggeste d the exponential

- quadratic loss function...which allows for greater losses when T is large. But remember that neither of these loss functions is based on any economic (or other) theory . Nor are the loss functions that appear in other IAMs. They

are just ar bitrary functions , made up to describe how GDP goes down when T goes up.
The loss functions in PAGE and FUND, the other two models used by the Interagency Working Group, are more complex but equally arbitrary... [T]here is no pretense that the equations are b ased on any theory. [Pindyck p. 11, bold added.]
Finally, in Professor Pindyck’s conclusion he writes:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 312 I have argued that IAMs are of little or no value for evaluating alternative climate change policies and estimating the SCC. On the contrary, an IAM

- base d analysis suggests a level of knowledge and precision that is nonexistent, and allows the modeler to obtain almost any desired result because key inputs can be chosen arbitrarily.
Professor Pindyck demonstrates the arbitrary nature of the SCC, rendering i t unfit for use by agencies in assessing the value of regulation.
It should be noted that just because the individual IAMs have been cited in the peer

- reviewed literature, does not justify their use for regulation. According to the OMB’s Information Qualit y Bulletin for Peer Review , “prior peer review and publication is not by itself sufficient grounds for determination that no further review is necessary.” 6

4 Environmental Protection Agency, Benefit and Cost Analysis for the Proposed Effluent Lim itations Guidelines and Standards for the Steam Electric Power Generating Point Source Category , p. 8

- 6, Apr. 2013.

5 Robert S. Pindyck, “Climate Change Policy: What Do the Models Tell Us?”, Journal of Econo mic Literature
, September 2013, available at: http://web.mit.edu/rpindyck/www/Papers/Climate

Change

- Policy

- What

- Do

- the

- Models

- Tell

- Us.pdf.

6 Office of Management and Budget, Information Quality Bulletin for Peer Review
, http://www.w hitehouse.gov/site s/default/files/omb/memoranda/fy2005/m05

- 03.pdf.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 1 on use of the social cost of carbon to provide appropriate and reasoned benefit estimates to inform policy decisions.
EPA’s analysis of the CO 2 - related benefits of the steam electric ELG regulation is consistent with consensus guidance from the Interagency Working Group on Social Cost of Carbon (IWGSCC, 2010; 2013). The IWGSCC had its own review and comment process (GAO, 2014) and comments on the development of SCC values are outside the scope of this rule.

References:
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2010. Technical Support Document: Social Cost of Carbon for Regulator y Impact Analysis under Executive Order 12866. February 2010.
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2013. Technical Update of the Social Cost for Regulatory Impact Analysis under Executive Order 12866. Revis ed November 2013.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 313 Government Accountability Office (GAO). 2014. Development of Social Cost of Carbon Estimates, GAO

- 14

- 663, July 24, 2014.

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 4 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

THE USE OF THE SOCIAL COST OF CARBON TO ASSESS REDUCTIONS IN CARBON DIOXIDE EMISSIONS IS NOT APPR OPRIATE
Instead of providing the public with valuable information concerning actual climate change indicators, EPA estimated the benefits of carbon dioxide reduction using the social cost of carbon (SCC).
According to EPA:

The SCC is an estimate of the mon etized damages associated with an incremental increase in carbon emissions in a given year. It is intended to include (but is not limited to) changes in net agricultural productivity, human health, property damages from increased flood risk, and the value of ecosystem services due to climate change. 4

The SCC, however, it not an appropriate measure of climate change impacts. It is an arbitrary calculation that is not based in actual economic theory according to the peer reviewed literature.
According to a re cent peer

- reviewed paper by MIT economist Robert Pindyck, the so

- called Integrated Assessment Models (IAMs), three of which the Interagency Working Group on Social Cost of Carbon used to estimate the SCC, are literally made up and not based on theory.

Acco rding to Professor Pindyck, the “ developers of IAMs can do little more than make up functional forms and corresponding parameter values. And that is pretty much what they have done.” 5

Pindyck further explains:
Most IAMs (including the three that were used by the Interagency Working Group to estimate the SCC) relate the temperature increase T to GDP through a “loss function” L(T), with L(0) = 1 and L’(T ) < 0. For example, the Nordhaus (2008) DICE model uses [an] inverse

- quadratic loss function...Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 314 Weitzman (20 09) suggested the exponential

- quadratic loss function...which allows for greater losses when T is large. But remember that neither of these loss functions is based on any economic (or other) theory . Nor are the loss functions that appear in other IAMs. They

are just arbitrary functions , made up to describe how GDP goes down when T goes up.
The loss functions in PAGE and FUND, the other two models used by the Interagency Working Group, are more complex but equally arbitrary... [T]here is no pretense that the equations are based on any theory. [Pindyck p. 11, bold added.]
Finally, in Professor Pindyck’s conclusion he writes:
I have argued that IAMs are of little or no value for evaluating alternative climate change policies and estimating the SCC. On the contra ry, an IAM

- based analysis suggests a level of knowledge and precision that is nonexistent, and allows the modeler to obtain almost any desired result because key inputs can be chosen arbitrarily.
Professor Pindyck demonstrates the arbitrary nature of the S CC, rendering it unfit for use by agencies in assessing the value of regulation.
It should be noted that just because the individual IAMs have been cited in the peer

- reviewed literature, does not justify their use for regulation. According to the OMB’s Inf ormation Quality Bulletin for Peer Review , “prior peer review and publication is not by itself sufficient grounds for determination that no further review is necessary.” 6

4 Environmental Protection Agency, Benefit and Cost Analysis for the Propos ed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category , p. 8

- 6, Apr. 2013.

5 Robert S. Pindyck, “Climate Change Policy: What Do the Models Tell Us?”, Journal of Econo mic Literature
, September 2013, ava ilable at: http://web.mit.edu/rpindyck/www/Papers/Climate

Change

- Policy

- What

- Do

- the

- Models

- Tell

- Us.pdf.

6 Office of Management and Budget, Information Quality Bulletin for Peer Review
, http://www.w hiteh ouse.gov/sites/default/files/omb/memoranda/fy2005/m05

- 03.pdf.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 3.

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 315 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA FAILS TO FOLLOW OMB’S CIRCULAR A

- 4 ON THE PRESENTATION OF COST/BENEFIT ANALYSES

O MB Circular A

- 47 (relying in turn on Circular A

- 94) states that “a real discount rate of 7 percent should be used as a base

- case for regulatory analysis,” as this is the average before

- tax rate of return to private capital investment. However, Circular A

- 4 acknowledges that in some cases, the displacement of consumption is more relevant, in which case a real discount rate of 3 percent should be used. Thus it states: “For regulatory analysis, you should provide estimates of net benefits using both 3 percent and 7 percent.” Note that Circular A

- 4 does not say that a discount rate should be chosen based on the impacts; instead it says quite clearly that estimates should be made using both rates.
In the economics of climate change academic literature, there are disputes over the proper discount rate, with some economists arguing that very low rates should be used in order to place future generations on a nearly equal footing with the present generation in policy analysis. Circular A

- 4 and the White House’s primer on Circular A

- 4, 8 explicitly cited the work of Martin Weitzman, one of the leading scholars in the field on this issue, who argues for a low discount rate in climate change analysis. 9 Nonetheless, after this discussion the 2011 primer still concluded:

If the regulatory action will have important intergenerational benefits or costs, the agency might consider a sensitivity analysis using a lower but positive discount rate, ranging from 1 to 3 percent, in addition to calculating net benefits using discount ra tes of 3 percent and 7 percent. [“Regulatory Impact Analysis: A Primer,” p. 12, bold added.]
But instead of following OMB’s guidance and calculating the social cost of carbon at a 7 percent discount rate, EPA refuses and only uses a 5 percent discount rate . EPA states:
Because SCC values are not available for the 7 percent discount rate, EPA used the SCC based on a 5 percent discount rate to estimate values presented for the 7 percent discount rate. EPA uses 5 percent to discount CO2

- related benefits and 7 percent to discount benefits from changes in NOX and SO2 emissions. 10

This is an arbitrary and capricious deviation from OMB’s guidance on the use of discount rates. EPA could have run the social cost of carbon models at a 7 percent discount rate, but it f ailed to do so.
It certainly is possible to run social costs of carbon models at a 7 percent discount rate. Recently, the Heritage Foundation ran the DICE model, 11 one of the three models that the administration used to estimate the social cost of carbon. Here are the results from the DICE mode at a 2.5Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 316 percent, 3 percent, 5 percent, and 7 percent discount rate, according to the Heritage Foundation analysis.

It is easy to see why EPA would be reticent to include the 7 percent discount rate as required by OMB

— the SCC at the 7 percent discount rate is substantially lower, at roughly only 50 percent of the 5 percent discount rate. This demonstrates why EPA’s exclusion of the SCC at the 7 percent discount rate is arbitrary and capricious. Furthermore, although the Heritage Foundation only tested the effect of including a 7 percent discount rate using the DICE model, the results would presumably be even more striking had they done the same procedure with the FUND model. This is because the DICE projects immediat e (and rising) net damages from global warming. In contrast, the FUND model projects decades of global benefits from global warming, which only switches over to net damages after the year 2050. 12 Therefore, applying a 7 percent discount rate (rather than t he highest rate of 5 percent as the Working Group chose to do) to the stream of benefits and damages in the FUND model, would yield a present

- value SCC very close to $0/ton, if not negative.

7 OMB Circular A

- 4 available at: http://www.whitehouse.gov/omb/circulars_a004_a

- 4.

8 “Regulatory Impact Analysis: A Primer,” available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/circular

- a

4_regulatory

- impact

- analysi s

- a

- primer.pdf.

9 See: http://www.whitehouse.gov/sites/default/files/omb/inforeg/regpol/circular

- a

- 4_regulatory

impact

- analysis

- a

- primer.pdf.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 317 10 Environmental Protection Agency, Effluent Limitations Guidelines and Standards for the Steam Electri c Power Generating Point Source Category , 78 Fed. Reg. 34432, 34517, June 7, 2013.

11 Kevin Dayaratna & David Kreutzer, Re: Social Cost of Carbon
, http://www.scribd.com/doc/168715712/Comment

- to

- EPA

- on

- the

- Social

- Cost

- of

Carbon

- Sept

- 16

- 2013.

12 See Figure 1B (page 10) from the 2010 report of the Working Group on Social Cost of Carbon.
Comment Response:
See response to this question in 29.b, DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 5.

Commenter Name: Daniel Simmons Commenter Affiliation: Institute for Energy Research Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

CONCLUSION

To assess the value of carbon dioxide reductions, the EPA should e xamine the impact of the rule on climate change indicators such as temperature and sea level rise. These factors are why climate change matters.

EPA should not use the social cost of carbon to value carbon dioxide reductions. The social cost of carbon is the result of “arbitrary functions” because it is not based on economic theory and the developers of the models “can do little more than make up functional forms.” 13 This type of arbitrary modeling should not be used for cost

- benefit analyses.

Furthermore, EPA’s implementation of the social cost of carbon is arbitrary and capricious. OMB has clearly stated that a number of discount rates could be used “in addition to calculating net benefits using discount rates of 3 percent and 7 percent.” 14 But EPA failed to follow OMB’s guidance and instead omitted the calculation of the social cost of carbon at 7 percent. Because the social cost of carbon is much lower at a 7 percent discount rate, this omission could have the appearance that EPA was intentionally omitti ng this information from the public in an effort to more easily justify the regulation.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 318 EPA should revise this regulation to omit the use of the social cost of carbon and instead use the impacts on climate change indicators such as temperature and sea leve l rise.

13 Robert S. Pindyck, “Climate Change Policy: What do the Models Tell Us?”, Journal of Econo mic Literature, September 2013, available at: ht tp://web.mit.edu/rpindyck/www/Papers/Climate

Change

- Policy

- What

- Do

- the

- Models

- Tell

- Us.pdf.

14 Office of Management and Budget, Regulatory Impact Ana lysis: A Primer.
Comment Response:
Concerns over the use of the SCC rather than climate change indicators are addressed in the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 1.

The concern over the use of alternate discount rates is addresse d in Section 29.b in response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 5.

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 129 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
For example, several aspects of the air quality benefits analysis are highly uncertain. As detailed in UWAG’s Comments, these uncertainties are mainly related to oversimplifications in the modeling, assumptions regarding association of air impacts with health effects, and a highly uncertain interpretation of the social costs of increased CO2. This uncertainty is particularly significant given rel atively high estimates of associated benefits, which account for 18

- 40% (depending on the option and discount rate applied) of the overall benefits associated with EPA’s proposal.
As another example, based on a model prediction, EPA claimed that nationally SO2 emissions would decrease by

- 0.1% and

- 0.2% for the ELG rule options 3 and 4, respectively, compared to baseline emissions. Given these small decreases and the uncertainty surrounding these estimates, it is likely that a sensitivity analysis that exp lored a large range of possible assumptions could show that the benefits from reduced air emissions under the ELG regulatory options as low as

zero.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 31 9 In yet another example, EPA claimed benefits based on a social cost of carbon estimate, developed by an out side agency working group, without the opportunity for notice and public comment. This estimate has significant flaws, identified in the Gradient report attached to the UWAG Comments. EPA assumed benefits related to the social cost of carbon by assuming that the rule will result in a reduction in CO2 emissions. Like SO2, the CO2 analysis was largely driven by projected changes to the energy

- generating profile as a result of the estimated ELG cost burden.
As explored further in the UWAG Comments, it is li kely that plausible benefits of the various options, or even the basic support for the need for additional regulation, could be significantly lower and would be insufficient to support particular regulatory options.
Comment Response:
The commenter argues that, because the relative changes in emissions are small, a sensitivity analysis exploring a large range of possible assumptions might result in air emissions benefits as low as zero. EPA notes that such an analysis could also show greater emission reduc tions and higher benefits. As stated in previous analyses that have relied on IPM, EPA determined the outputs of the model to provide reasonable estimates of changes in emissions.
Modeled emissions may increase or decrease depending on the generation mix I PM uses to meet demand and other constraints. Thus, for the final rule analysis, EPA estimated an increase in 2030 of 0.1% in SO 2 nationally relative to baseline emissions for Option B and a decrease of 0.1% nationally for Option D. (See Chapter 7 in BCA f or details, including discussion of the uncertainties). However, for pollutants for which there are systematic differences in emission factors between units incurring incremental costs under the ELGs (i.e., coal

- fired generators) and other electricity gene rating units, any shift in generation away from the units incurring incremental costs will have results of a predictable direction. Thus, coal

- fired generating units have consistently higher CO 2 emission factors and changes in the generation profile away f rom coal

- fired units will predictably result in lower CO 2 emissions overall.
Regarding SCC values, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excerpt Number 3.
Finally, for information on the role of benefits analysis in establishing effluent limitat ions based on Best Available Technology Economically Achievable (“BAT”), see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: E PA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 204 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 320 Comment Excerpt:

E. Air Quality Modeling and Impacts to Humans
Several aspects of the air quality benefits anal ysis are highly uncertain. This is particularly important because the air

- related impacts account for 18

- 40% of the overall benefits depending on the option and discount rate that is applied. These uncertainties are mainly related to oversimplifications in the modeling, assumptions regarding association of air impacts with health effects, and a highly uncertain interpretation of the social costs of increased carbon dioxide (CO 2 ).
EPA’s Integrated Planning Model (IPM), which was used to estimate the change in emissions of NO x , SO 2 , and CO 2 for two of the eight proposed ELG options, relied on several simplifying assumptions regarding energy use, price points, plant characteristics, and the effect of other air regulations on energy generation to calculate bas eline and predicted changes in conditions under the different regulatory options. Additionally, the IPM modeling was run for only two years (2020 and 2030). EPA does not specify how it extrapolated between these time points to derive an overall benefit o ver the period of interest. The impact of all of these assumptions is unclear, but all assumptions introduce significant uncertainty into the benefit calculations.
EPA conducted regional modeling to evaluate how modeled emissions would vary across the U.S

. In its analysis, however, EPA evaluated benefits based on an average national estimate. This is misleading, because based on the model estimates, some areas of the country would see benefits, but others would not, leading to a disproportionate burden t o some areas compared to others from this rule. EPA should present a range of possible benefits that would reflect this variability.
In the assessment of reduced mortality from changes in SO 2 emissions, EPA disregarded the variability in regional estimates, and used linear regression to interpolate between years for which benefits per ton estimates were not available. Both of these assumptions decrease the reliability of the assessment for es timating air quality benefits. By conducting sensitivity analyses, if only to a limited extent ( e.g. , using different model inputs to gauge the impact on benefits calculations), EPA could have presented a range of estimates that better represent these

unc ertainties.
Additional uncertainty lies in the calculations related to the development of the benefits per ton estimates. One of the key sources of uncertainty is the concentration

- response function (CRF) used to determine benefits from reduced mortality. The assumption that the CRF is linear at low doses ( i.e. , that any increase or decrease in exposure will affect risk) will misrepresent the benefits from low

- level reductions. That is, a small reduction in PM 2.5 is unlikely to confer any added health benefit for populations currently exposed at levels that do not pose a health risk. The low

- dose linearity assumption is not consistent with toxicity, occupational, and human exposure evidence, which by and large support a threshold ( i.e. , the exp osure level below which no health effects occur).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 321 Overall, the national results indicate that SO 2 emissions would change by

- 0.1% and

- 0.2% for the ELG rule Options 3 and 4, respectively, compared to baseline emissions. Given these small decreases and th e uncertainty surrounding these estimates, it is likely that a sensitivity analysis that explored a range of alternative plausible assumptions could show that the benefits from reduced air emissions under the ELG regulatory options could be as low as zero. That is, EPA only presents a point estimate that does not reflect the uncertainty associated with all the model assumptions. A range of possible benefits that reflects this uncertainty would likely include a zero benefit.

Also, the social cost of carbon estimates, developed by an interagency working group, accounted for global impacts of carbon emissions. Given the national (not international) nature of the ELG assessment, it would have been more appropriate to also consider national costs only, which

w ould have led to a 93 to 77% reduction in estimated benefits from carbon emissions savings. Given the complexity of making global environmental and socioeconomic projections over multiple centuries, the predicted international social cost of carbon estima tes are highly uncertain, but contribute a large portion of the estimated air

- related benefit of the proposed rule.
Comment Response:
The commenter raises issues in four principal areas, addressed in turn below:
1. Integrated Planning Model

The comment er expresses a general concern about “several simplifying assumptions” of the Integrated Planning Model (IPM) without being specific about the exact nature of the concerns. Without more detail, EPA cannot provide a direct response to the comment. However, EPA notes that it has used IPM extensively over the past two decades to forecast the costs, emission changes, and power sector impacts of numerous regulations including the Clean Air Interstate Rule, Cross

- State Air Pollution Rule, the Mercury and Air Toxi cs Standards, the proposed Carbon Pollution Standards for New and Existing Power Plants, the Cooling Water Intake Structures regulation, and the Coal Combustion Residuals regulation. As EPA noted in the RIA for the Clean Power Plan rule (U.S. EPA, 2014), t he model and EPA's assumptions input into the model undergo periodic formal peer review. The rulemaking process also provides opportunity for expert review and comment by a variety of stakeholders, including owners and operators of capacity in the electric ity sector that is represented by the model, public interest groups, and other developers of U.S. electricity sector models. The feedback that the Agency receives provides a highly detailed review of key input assumptions, model representation, and modelin g results. IPM has received extensive review by energy and environmental modeling experts in a variety of contexts. For example, in the late 1990’s, the Science Advisory Board reviewed IPM as part of the CAA Amendments Section 812 prospective studies that are periodically conducted. The model has also undergone considerable interagency scrutiny when it has been used to conduct over a dozen legislative analyses (performed at Congressional request) over the past decade. The Agency has also used the model in a number of comparative modeling exercises sponsored by Stanford University’s Energy Modeling Forum over the past 15 years. Finally, IPM has also been employed by states (e.g., for RGGI, the Western Regional Air Partnership, Ozone Transport Assessment Group ), other Federal and state agencies, environmental groups, andEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 322 industry, all of whom subject the model to their own review procedures. Given this extensive history, EPA determined that IPM is an appropriate tool for estimating the electricity market and

em issions impacts of the ELGs.
Regarding the IPM run years, the commenter asserts that IPM was only run for two years, 2020 and 2030, and that EPA does not explain how it extrapolated data from those years to other years in order to estimate total benefits o ver the analysis period. In fact, as EPA explains in Chapter 7 of the BCA for the final rule, it used IPM outputs data for 2020, 2025, 2030, and 2040 to represent each of the periods 2019

- 2022, 2023

- 2027, 2028

- 2033, and 2034

- 2042, respectively. This is sim ilar to the approach EPA used for the proposed rule, as was explained in the BCA.

References:
U.S. EPA. 2014. Regulatory Impact Analysis for the Proposed Carbon Pollution Guidelines for Existing Power Plants and Emission Standards for Modified and Reconstr ucted Power Plants
2. Use of national benefit

- per - ton values
The commenter expresses concerns over the application of average national estimates to estimate benefits. EPA notes that the commenter’s statements oversimplify EPA’s approach. As described in C hapter 7 of the BCA, EPA used the total national emissions, not an average across the regions, as the basis for estimating the benefits. For monetization, it is true that EPA used a uniform benefit

- per

- ton value but this value was derived from detailed mod eling of the electricity generation units (EGUs) responsible for emissions in the baseline and the value therefore reflects the underlying spatial distribution of both the emissions sources and populations. To the extent that there are differences between the spatial distribution of the emissions changes due to the final rule and spatial distribution of the sources in the baseline, EPA recognizes that the benefit values may be over/understated, but the direction of the uncertainty is more likely to result i n an underestimate of the benefits.

EPA used a benefit

- per

- ton value that lies at the lower end of the range of regional benefit

- per

ton values. Table 4A

- 2 in the Clean Power Plan rule analysis (U.S. EPA, 2014), presents benefit

per

- ton values for SO 2 in 2 020 ranging from $38,000 to $86,000 at the national level (2011 dollars, at 3%), and ranges of $7,800

- $18,000 in the West region and $40,000

- $90,000 in the East region (the analysis also shows the range for California of $160,000 to $360,000). By compariso n, EPA uses a national SO 2 value of $38,209 (2011 dollars) for the ELG analysis. For NOx, the Clean Power Plan rule analysis shows a range of $5,600 to $13,000 at the national level, with ranges in the West and East regions of $6,700

- $15,000 and $1,200

- $2, 600, respectively. By comparison, EPA used a national NOx value of $5,576 (2011 dollars) for the ELG analysis. The relative comparisons hold for other years and for the 7 percent discount rates. In 2020, 99.7 percent of SO 2 reductions and 68 percent of NOx reductions projected in IPM for the ELG rule occur in the East region, which has higher benefit

- per

- ton values for both pollutants. Using the lower end of the national benefit

- per

- ton values therefore underestimates the benefits.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 323 Thus, following the comme nter’s request that EPA use a range of regional values to reflect the uncertainty in the estimates, EPA also calculated the benefits of changes in SO 2 and NO X emissions using emissions changes projected for each region and the corresponding low and high be nefit

- per

- ton estimates. Results are shown in the table below for 2020. The table also includes values calculated using the national totals for comparison. As apparent by these results, not only are the benefit estimates EPA presented based on the national totals for the final rule reasonable, they are actually similar to the lower end of the range of benefits EPA would obtain using the approach suggested by the commenters.

Pollutant Benefits in 2020 based

on National Benefit

- per

ton Values (Million, 2013$) Benefits in 2020 based on Regional Range Benefit

- per

- ton Values (Million, 2013$)

Low High
SO 2 $217.0 $229.5 $516.4 NO X $82.7 $74.0 $165.4 TOTAL SO 2 +NO x $300.0 $303.5 $681.8 a. The benefits are as of 2020 and not discounted to 2015.
b. Benefit per ton estimates restated in 2013 dollars using the GDP deflator
c. Emissions changes for the East region calculated by summing changes for NERC regions FRCC, MRO, NPCC, RFC, SERC, SPP, and TRE; emissions changes for the West based on the WECC region.

d. EPA did not adjust the method used to estimate (dis)benefits from changes in air emissions from auxiliary power and transportation; these changes reduce the total benefits by approximately $4.1 million.

The commenter also expressed concerns regarding EPA’s use of a linear regression to interpolate data for the years when direct estimates were not available. EPA considered various possible functional forms and found that a linear form offered the best fit, with regression coefficients ranging between 0.99 and 1.0. Given small differences in values between the years, any uncertainty introduced by linearly interpolating between years is expected to be small.

3. Concentration

- response function at low doses.
For EPA’s response to the concerns regarding the concent ration

- response function for low doses, see comment EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 37.
4. Use of global impacts of carbon emissions to support decisions on national policies.
EPA recognizes that the final rule is a matter of domestic policy, n ot international; however, as stated by the Interagency Working Group on Social Cost of Carbon (IWGSCC), the issue of climate change is unusual in that it involves a global externality and cannot be solved solely byEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 324 the United States. The IWGSCC acknowledg es the OMB guidance in Circular A

- 4 which requires a domestic perspective for analyses, while making an international perspective optional, but after taking these and other issues into consideration IWGSCC concludes that relying on the global measure of be nefits from reducing U.S. emissions is preferable (IWGSCC, 2013). Therefore, EPA relied on the guidance of the IWGSCC and used social cost of carbon values that incorporate a global measure of benefits for estimation of CO 2 emissions impacts for the final rule.
Interagency Working Group on Social Cost of Carbon (IWGSCC), United States Government. 2013. Technical Update of the Social Cost for Regulatory Impact Analysis under Executive Order 12866. Revised November 2013.

Commenter Name: Elizabeth E. Aldrid ge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Air Quality Model ing and Impacts to Humans Several aspects of the air quality benefits analysis are highly uncertain. This is particularly important because the air

- related impacts account for 18

- 40% of the overall benefits depending on the option and discount rate that is applied. These uncertainties are mainly related to oversimplifications in the modeling, assumptions regarding association of air impacts with health effects, and a highly uncertain interpretation of the social costs of increased CO2. More specifically:

 US EPA's Integrated Planning Model (IPM), which was used to estimate the change in emissions of NOx, SO2, and CO2 for two of the eight proposed ELG options, relied on several simplifying assumptions regarding energy use, price points, plant characteristics, and the effect of other air regulations on energy generation to calculate baseline and predicted changes in conditions under the different regulatory options. Additionally, the IPM modeling was run for only two years (2020 and 2030). US EPA does not specif y how it extrapolated between these time points to derive an overall benefit over the period of interest. The impact of all of these assumptions are unclear, but all assumptions introduce significant uncertainty into the benefit calculations.

 US EPA conduc ted regional modeling to evaluate how modeled emissions would vary across the US. In their analysis, however, they evaluate benefits based on an average national estimate. This is misleading, because based on the model estimates, some areas of the country would see benefits, but others would not, leading to a disproportionate burden to some areas compared to others from this rule. US EPA should present a range of possible benefits that would reflect this variability.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 325  In the assessment of reduced mortality f rom changes in SO2 emissions, US EPA disregarded the variability in regional estimates, and used linear regression to interpolate between years for which benefits per ton estimates were not available. Both of these assumptions decrease the reliability of t he assessment for estimating air quality benefits. By conducting sensitivity analyses, if only to a limited extent (e.g., using different model inputs to gauge the impact on benefits calculations), US EPA could have presented a range of estimates that bett er represent these uncertainties.

 Additional uncertainty lies in the calculations related to the development of the benefits per ton estimates. One of the key sources of uncertainty is the concentration

- response function (CRF) used to determine benefits fr om reduced mortality. The assumption that the CRF is linear at low doses (i.e., that any increase or decrease in exposure will affect risk) will misrepresent the benefits from low

- level reductions. That is, a small reduction in PM2.5 is unlikely to confer any added health benefit for populations currently exposed at levels that do not pose a health risk. The low

- dose linearity assumption is not consistent with toxicity, occupational, and human exposure evidence, which by and large support a threshold (i.e., the exposure level below which no health effects occur).

 Overall, the national results indicate that SO2 emissions would change by

- 0.1% and

- 0.2% for the ELG rule Options 3 and 4, respectively, compared to baseline emissions. Given these small decreases and the uncertainty surrounding these estimates, it is likely that a sensitivity analysis that explored a range of alternative plausible assumptions could show that the benefits from reduced air emissions under the ELG regulatory options could be as low as zero. That is, US EPA only presents a point estimate that does not reflect the uncertainty associated with all the model assumptions. A range of possible benefits that reflects this uncertainty would likely include a zero benefit.

 The social cost of carbon (SCC) estimates, developed by an interagency working group, accounted for global impacts of carbon emissions. Given the national (not international) nature of the ELG assessment, it would have been more appropriate to also consider national costs on ly, which would have led to a 93 to 77% reduction in estimated benefits from carbon emissions savings. Given the complexity of making global environmental and socioeconomic projections over multiple centuries, the predicted international SCC estimates are highly uncertain, but contribute a large portion of the estimated air

- related benefit of the proposed rule.
Comment Response:
See responses to comments EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 204 and EPA

- HQ

OW

- 2009

- 0819

- 4487

- A1, Excerpt Number 204.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 37 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 326 Comment Excerpt:
In Section XIV of the proposed ELG rule, benefits related to air quality (NOx, SO 2 , and CO 2 ) are estimated for regulatory Options 3 and 4 (see Table XIV

- 6). In our comments, we have not addressed whether it is appropriate or not to incl ude air

- related benefits in the cost

- benefit associated with ELGs as air emissions and impacts on air quality are covered by other regulatory actions that specifically address these impacts. Instead, we have focused on the scientific merit of US EPA's anal ysis and some of the technical issues associated with the development of the air

related impacts. Under the proposed regulatory options, US EPA has determined that the benefits related to air quality improvements are substantial. Depending on the option an d applied discount rate, air quality improvements are projected to account for 36

- 40% of the total benefit for Option 3 and 18

- 28% for Option 4. For both of these options, most of the air quality benefits stem from the assumption of increased operating cos ts associated with implementation of the ELG rule that would result in an overall shift in the electricity generating profile in the US, resulting in reduced SO 2 and CO 2 emissions. 6 These estimated improvements to air quality are based on a number oversimp lified analyses conducted for baseline (current) conditions and purported improvements to air quality as a result of the ELG rule. As acknowledged by US EPA, reduction in emissions are very small, both compared to baseline emissions and relative to overall industry

- wide emissions ( e.g. , less than 0.1%). These small air quality improvements, however, are then translated to large estimates of improved health, generating large benefits because of the use of conservative modeling assumptions. Specifically, thes e analyses, are subject to a high degree of conservatism and uncertainty ( e.g. , use of a linear CRF) which likely overestimated the total benefits. The uncertainty in the benefit is not reflected in the point estimates presented by US EPA for the two optio ns considered in this analysis. That is, in the face of these uncertainties and conservatisms, US EPA conducts no sensitivity analyses to determine how using different model inputs would impact the benefits estimates. Without such an analysis, the air

- bene fits analysis is highly uncertain and an ineffective metric for use in the ELG rule making.

The sections below focus on the air

- related benefits from reduced SO2 and CO 2 emissions from the assumed change in electricity generation profiles. We focus on SO 2 (although US EPA also included NO 2 ) because the net SO 2 emission reductions account for the large majority of the air

related benefits for Option 3, and 50% or more of the benefits for Option 4, depending on the discount rate. The rest of the benefits are from reductions in CO 2 emissions (US EPA, 2013d, Table 8

- 8). For example, for Option 3 and a discount rate of 3%, SO 2 benefits are 75% of the total benefits and CO 2 benefits make up the other 25% (small negative benefits were calculated for NOx increases). For Option 4 and a 3% discount, SO 2 benefits are 47% of the total, and CO 2 benefits are 53% of the total estimated benefits. Air

- related benefit calculations were not performed for the other proposed alternatives, but US EPA expected these benefits to be relevant for understanding the preferred Options 3a, 3b, and 4a as well.

Section XIV(B)(5). Air

- Related Benefits (Reduced Mortality)
The overall methodology used by US EPA to calculate the benefits from reduced SO 2 emissions involved both an estimate of r eduction in nationwide emissions from the changed electricity generation profile and an analysis of how these emissions translated into health benefits. More specially, as described in Section 8 of the Benefit and Cost Analysis for Proposed ELGs (USEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 327 EPA, 2013d), in the initial step, US EPA estimated SO 2 reductions using the IPM. Although, typically more extensive analyses are conducted to estimate benefits from reduced emissions, US EPA instead used a simplified or "reduced

- form" approach to estimate benef its. Specifically, it obtained "benefits per ton" estimates for electricity generating units (EGUs) reported by Fann et al . (2012). Benefit per ton estimates relate the reductions in air emissions (in this case, SO 2 ) to reduced mortality from PM 2.5 exposur e. That is, SO 2 emissions are converted to PM 2.5 and it is the reduction in PM 2.5 , as a result of reduced SO 2 , and its relationship to mortality that forms the basis for the estimated air

- benefits). The final benefits calculation simply involved multiplyin g the benefits per ton estimates for EGUs by the tons of SO 2 reduced (generated from the IPM model) to obtain the overall benefits associated with SO 2 . The key assumptions associated with this simplified methodology and implications of these methodologies are discussed in more detail below.

[...]
Although the results generated by the IPM model reflect rough projections, it is noteworthy that when compared to actual 2009 industry

- wide emissions, the model predicted that net reductions in SO 2 were a very small fraction of overall EGU emissions. For example, under Options 3 and 4, SO 2 emissions are estimated to represent only 0.045% and 0.055% of overall industry

- wide emissions, respectively (US EPA, 2013b). Such small net contributions to over all emissions suggest that the impact of ELG is minimal and raises questions regarding the validity of the large air

- related benefits (i.e., whether such a small incremental change in air emissions would have a true public health benefit).
Moreover, region al analyses conducted by US EPA demonstrated significant variability across regions. For SO 2 the emissions ranged from

- 1.9 to 0.3% for Option 3, and from

- 2.2 to 1.2% for Option 4. This indicates that in different regions of the US, net SO 2 emissions actu ally can vary from a net reduction in emissions to a net increase in emissions. Similar results were obtained for the "transition" 2020 year analysis. Because of regional heterogeneity (showing both increases in emissions or decreases), it is not appropria te for US EPA to quantify the health associated benefits based on average national emissions. At the very least, US EPA should provide a range of benefits that would reflect the heterogeneity observed across different regions of the US, and even account fo r the reduced benefit that would be experienced by certain segments of the population.
Uncertainty in the Benefits per Ton Estimates
US EPA's "benefit per ton" estimate for the proposed ELG rule is largely based on a publication by Fann et al. (2012). Fann et al . (2012) estimated benefit per ton estimates from point and mobile sources, including electric utilities, with special consideration of the dynamic conversion of various air contaminants (including SO 2 ) to PM 2.5 , which is the air fraction that ultima tely links SO 2 to health effects.
There are several key uncertainties related to how US EPA applied the estimates from Fann et al

. (2012) to estimate benefits per ton under the ELG options. Importantly, US EPA's analysis rests on two key assumptions that i ntroduce substantial uncertainty into the analysis:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 328  A significant uncertainty in the reduced

- form approach that US EPA used, is that the assumptions that went into key model attributes such as population distributions, meteorology, and source parameters ( e .g. , plant stack heights) between the ELG calculated emissions reductions and the emissions reductions estimated by Fann et al. (2012). This assumption is not necessarily valid. For example, Fann et al . (2009) demonstrated significant variability in the es timated benefits per ton across different urban areas to show how these assumptions could impact the benefits per ton estimates. For SO 2 emissions (reported as sulfur oxides or SOx) from EGUs, the benefits ranged from $6,300/ton in Seattle to $350,000/ton in San Joaquin (2006$, 3% discount rate and based on the mortality estimate from Laden et al ., 2006). Therefore, if the assumptions used in the US EPA analysis are not the same as those in the Fann et al. (2012) analysis, the calculated estimates could be significantly under or overestimated. Without any sensitivity analyses to show how this might impact the benefits calculations there is no way to know the magnitude or direction of this source of uncertainty. The second source of uncertainty is related to the use of linear regression to interpolate between years for which benefits per ton estimates were not available [because estimates were obtained from Fann et al . (2012) only for the years 2020, 2025, and 2030]. As discussed by US EPA, this introduce s additional uncertainty because the benefits p
er ton estimates do not account for air quality changes that vary from year to year (US EPA, 2013d). Also, the assumption that changes in air emissions is linear between years may not be valid. US EPA i ndicated that the impact of this is uncertain and that annual estimates should be considered "rough estimates" (US EPA, 2013d, pg. 8

- 11).
US EPA did not attempt to quantify these sources of uncertainty in the aforementioned assumptions nor fully discuss th eir impact on benefits calculations. By conducting sensitivity analyses, if only to a limited extent ( e.g. , using different model inputs to gauge the impact on benefits calculation), US EPA could have presented a range of estimates that better reflect

unce rtainties in the adaption of estimates of Fann et al . (2012) to the analysis in the supporting documentation for the ELG rule.
In addition to issues with the application of the model from Fann et al ., uncertainty lies in model itself. Specifically, the mod el relies on an air quality model inputs that tends to overestimate the benefits of reduced air emissions, as well as the unsupported assumption that the function between reduced PM 2.5 emissions and morality is linear, such that any reduction PM 2.5 will al so have a health benefit. These issues are discussed below.
Air Quality Model

 Fann et al . (2012) developed benefits per ton estimates using the Comprehensive Air Quality Model with Extensions (CAMx) air quality model together with a particulate source app ortionment technology (PSAT) module within CAMx to estimate emissions from different sources. This model approach estimates the contributions from precursor emissions ( e.g. , NOx and SO 2 ) to modeled concentrations of PM 2.5 . As discussed by Fann et al. (2012 ), the selection of air quality model can have a significant impact on benefits per ton estimates. There is no consensus air quality model to estimate changes in PM 2.5 concentrations from changes in precursor emissions suchEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 329 as SO 2
. Researchers have attem pted to validate these models by comparing multiple estimated concentrations to field measured air concentrations. For example, Koo et al. (2009) compared the emissions reductions predicted by different air quality models, including the PSAT approach use d by Fann et al. (2012), and reported that for SO 2 - related PM 2.5 (PM 2.5

– sulfate) the PSAT approach showed higher source contributions than those estimated by other more reliable models. In another study, Baker and Scheff (2007) showed a regional over

- pred iction by the CAMx air quality model compared to measured concentrations. Therefore, based both on comparisons across different air quality modeling approaches as well as comparisons with measured air concentrations, the air quality modeling approach used by Fann et al. (2012) likely over

- predicted PM 2.5 - sulfate emissions associated with EGUs. This in turn, resulted in overestimated benefits per ton values that US EPA used in its benefits calculations.

Concentration

- Response Function

 One of the largest sources of uncertainty in the benefits estimation is the choice of health impact function or CRF that relates the reduction in air concentrations to reductions in adverse health outcomes. Fann et al. (2012) used BenMAP to estimate the health impacts and as sociated monetary values. BenMAP applies CRFs that are derived from epidemiology studies. In this case, Fann et al. (2012) selected the study by Krewski et al. (2009) as the source of this CRF. Krewski et al. (2009) reported a weak but statistically signif icant association between PM 2.5 concentrations and all

- cause mortality. However, this study has several methodological limitations that affect the interpretation of results. These include issues with the proper control for confounders, exposure measurement error, model selection error, and assumptio

ns of linearity. By effectively ignoring these limitations, benefits estimates are likely to b e overestimated.

 One important issue is confounding. PM mortality studies are subject to confounding bias. There is evidence that co

- pollutants can confound the PM mortality association, especially because many of the pollutants are strongly correlated, and disentangling the effects of any single pollutant (if any) is difficult ( e.g. , Krewski et al., 2000; Burnett et al., 2004). Th e issue of confounding is important because it relates both to the assumption of causality, where another factor may actually be the causal agent, and to the magnitude of the association, where a co

- factor may account for some of the observed risk. In eith er case, ignoring the effects of confounding caused by co

- pollutant results in overstated benefits estimates. US EPA should discuss the potential role that confounding effects could affect the estimated benefits.

 Exposure measurement error is another impor tant limitation. The study by Krewski et al. (2009) also relies on data from central

- site monitors to estimate personal exposures, which can results in exposure measurement error. The direction and magnitude of the bias depends on the type of measurement e rror. For PM 2.5 , however, because of the spatial variability of air pollutant concentrations the bias is likely to result in effects being overestimated (Goldman et al., 2011; Rhomberg et al., 2011). Because the estimated mortality risk is so small, it is possible that exposure measurement error accounts for some or all of the observed risks.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 330  An additional source of uncertainty that is not discussed by US EPA involves how different statistical models impact epidemiology findings. To address this question, K rewski et al. (2009) conducted extensive sensitivity analyses, including tests of the effects of various model assumptions ( e.g. , lags and smoothing functions for time trends), to assess the impacts on health estimates. Krewski et al. (2009) showed that st atistical model assumptions impact the mortality risks. US EPA should provide some discussion on the appropriateness of the selected model in the context of the proposed ELG rule, and explore how different models may have produced different outcomes.

Lastl y, another important assumption is that CRFs are linear at low PM 2.5 concentrations, meaning that health outcome is directly proportional to the ambient air pollutant concentration. This is not consistent with toxicity, occupational, and human exposure evi dence, which by and large support a threshold (i.e., the exposure level below which no health effects occur). For example, toxicity studies demonstrate that the physiological impact of inhaled air pollutants results from overwhelming the lung's natural def ense mechanisms ( e.g. , Oberdorster, 1996, 2002; Pauluhn, 2012; Valberg et al., 2009). In actuality, a small reduction in SO 2 , as has been estimated by US EPA (less than 0.1%, on average), and the resulting reduction in PM 2.5 will likely not confer any adde d health benefit for most individuals, and particularly those individuals currently exposed below levels of public health significance. Traditionally, estimating the benefits associated with reductions in air pollution levels involves complex air models an d benefits analyses software. Instead of relying on these more complex models, US EPA used a reduced

- form approach to estimate air

- related benefits from the ELG rule. In doing so, US EPA made a number of assumptions that may not be valid and provided no sc ientific support for these assumptions. Importantly, US EPA did not discuss or consider numerous sources of uncertainty at each stage of the benefits calculation, including the choice of air quality model, CRF, and valuation methods (not discussed in these comments). As acknowledged by US EPA, net changes in the emissions of SO 2 were estimated to be very small as a result of the ELG rule, and represent much less than 0.1% of industry

- wide emissions. Given this small increase (which has a significant effect on the overall benefits calculation) and large amount of uncertainty surrounding this value, US EPA should include a sensitivity analyses into the proposed rule to determine uncertainty bounds for the estimated benefits.

Section XIV(B)(5). Air

- Related Ben efits (Avoided Climate Change Impacts)
Using the IPM model (discussed above) US EPA also calculated the expected reduction in CO 2 emissions (in metric tons CO 2 per year through the year 2040). Like SO 2 , the CO 2 analysis was largely driven by projected chan ges to the energy

- generating profile as a result of the estimated ELG cost burden. This estimate was then multiplied by the SCC [as estimated by the Interagency Working Group on Social Cost of Carbon (IWGSCC) (IWGSCC, 2010)]. The Social Cost of Carbon (SCC ) comprises a net cost/benefit analysis for incremental CO 2 emissions that considers, among other impacts:

 Changes to net agricultural productivity

 Human health

 Property damages from increased flood risk

 Value of ecosystem services due to climate changeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 331 Th e values established by the IWGSCC were developed to support rule

- making activities related to CO 2 emissions across the agency (i.e., the derived values were not developed for the ELG analysis, specifically). Thus our analysis below remarks on general limi tations of the SCC values developed by IWGSCC. Where applicable we note the implications of these uncertainties for the proposed ELG rule.

 To calculate the SCC, the underlying models "translate emissions into changes in atmospheric greenhouse concentration s, atmospheric concentrations into changes in temperature, and changes in temperature into economic damages" (IWGSCC, 2010, pg. 5). US EPA's estimate of the social cost of carbon deviates from the guidelines of OMB Circular A

- 4 by incorporating global rath er than domestic cost. Accounting for estimated global costs, though appropriate given the global nature of climate change concerns, is also a conservative choice for domestic decision making, and adds to uncertainty in the overall estimate by requiring so cioeconomic projections in unpredictable economies. The working group proposed that the domestic SCC would be approximately 7

- 23% of the global SCC. Given that the proposed ELG rule is national, rather than international in scope, it would have been approp riate for the US EPA to adjust the SCC values to reflect national benefits only

— effectively that would reduce CO 2 related savings estimated for the proposed rule by 93 to 77%.

 The SCC values developed by the working group reflect the average results from t hree underlying integrated assessment models. Several important points should be noted here. First, the 3 models differ in their underlying assumptions ( e.g. , how regional damages are calculated as a function of GDP, whether the rate of temperature change is taken into account, or whether temperature affects consumption and investment). As a result, the three models differ strikingly in their predicted SCC, particularly at low to intermediate levels of temperature change (< 3 °C). For context, an increase o f 3 °C is the most likely value predicted by Solomon et al . (2007) for a doubling of atmospheric CO 2 , which is clearly much higher than the range of carbon emissions being considered as a result of the proposed ELGs. Solomon et al . (2007) predicts that war ming over the next several decades will be 0.1 to 0.2 °C per decade; this means that predicted temperature increases over the next several hundred years are well within the range of substantial disagreement between SCC models. In fact, one of the three mod els predicts a net economic benefit from additional carbon emissions in this range, attributed to beneficial impacts such as CO 2 fertilization of agricultural productivity.

 In addition to model selection, the choice of a discount rate has a significant imp act on the ELG benefits calculation. The appropriate choice of discount rate for climate impacts is highly disputed among economists, particularly in light of the intergenerational nature of potential future costs of climate change (IWGSCC, 2010) a nd leads to a factor of 3

- 7 difference in estimated benefits due to CO 2 reduction from the proposed ELGs. Variability between and within each model depends on the discount rate chosen; at higher discount rates, a greater proportion of the present value cos t is related to costs incurred in the near term when the cumulative temperature change is low (and when other socioeconomic parameters are more predictable). This means that a lower discount rate leads to higher predicted costs and creates more emphasis o n predictions further in the future, about which there is greater uncertainty. US EPA considered a 3% discount rate and a 7% discount rate (which was calculated based on the 5% discounted SCC) inEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 332 their final cost benefit assessment. US EPA should provide f urther justification for their choices of discount rates for this issue and discuss the implications of their choice, particularly considering the higher uncertainty associated with air

- related benefit estimates at the lower discount rate.

6 The calculat ion of air benefits involved the evaluation of three mechanism that US EPA (2013c) assumed would affect air emissions: "1) additional auxiliary electricity use by steam electric plants to operate wastewater treatment, ash handling, and other systems needed to comply with the new effluent limits and standards; 2) additional transportation

- related emissions due to the increased trucking of coal combustion residue (CCR) waste to on

- site or off

- site landfills; and 3) the change in the profile of electricity gen eration due to relatively higher cost to generate electricity at plants incurring compliance costs for the proposed ELGs." Because most of the air quality benefits are driven by changes in SO 2 and CO 2 from mechanism #3 (the change in energy profile), we ha ve focused our analysis on these issues. Changes in NO 2 emissions from all three mechanisms, and changes in SO 2 emissions from mechanisms #1 and #2 did not contribute significantly to the benefits analysis or were associated with net cost.

Comment Response:
Regarding the concern that EPA did not conduct sensitivity analyses, see response to DCN EPA

HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 42 (in comment code 28.c) which discusses related comments on sensitivity analyses for Integrated Planning Mode l (IPM) runs. Also see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 204 (in comment code 29.h) for additional discussion of the use of the Integrated Planning Model to support the air

- related benefit analyses, use of national benefit

- per

- ton va lues, and use of values that reflect global impacts of carbon emissions.
The commenter raises several concerns regarding the methodology used to quantify and monetize air

- related human health benefits, which the commenter suggests results benefits being

ov erstated. The three concerns raised by the commenters are addressed below:
1. Uncertainty in the Benefits per Ton Estimates . The commenter points to two specific sources of uncertainty in the application of benefit

- per

- ton estimates from Fann et al., notab ly the variability of benefit

- per

- ton values across areas of the country and use of linear interpolation of the benefit

- per

- ton estimates between years. Regarding the first source of uncertainty, EPA notes that the national value used for the steam electri c ELG analysis actually falls toward the low end of the range and using regional values would likely yield higher benefit estimates. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 204 for more details on differences between national and regio nal benefit per ton estimates. Regarding the second source of uncertainty, which relates to the assumption of linearity in benefit per ton values over time, EPA recognizes that the values projected for any given future year do not account for potential cha nges in atmospheric conditions over time, but maintains that the analysis provides a reasonable basis for estimating the general magnitude of benefits resulting from the regulation where those changes represent marginal increases or decreases as is the cas e for the final ELGs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 333 2. Uncertainty inherited from the air quality model . Fann et al 2012 includes supporting information that presents model performance for sulfate and nitrate. EPA notes the greater confidence in the level and distribution of EGU emissi ons of NO X and SO 2 , since these sources are stationary and monitored, in turn making the Agency more confident in the magnitude of the benefit per ton estimates for this sector.
3. Uncertainty associated with the choice of a response function. After review ing the entire body of hundreds of peer

- reviewed clinical, toxicological and epidemiological studies on PM 2.5 - related health effects, EPA concluded that PM 2.5 is causally associated with a variety of health effects, including premature mortality. EPA’s ind ependent Science Advisory Board agreed with this conclusion. For benefits analysis, EPA use mortality risk estimates from the American Cancer Society cohort (Pope et al. 2002) and the Harvard Six Cities cohort (Laden et al, 2006), which are seminal long

- te rm multi

- city cohort studies that have been extensively validated and re

analyzed by other investigators. EPA’s choice of two epidemiology studies for assessing mortality benefits was supported by separate panels of EPA’s independent Science Advisory Board (CASAC, reviewing the PM Risk and Exposure Assessment, and Council, reviewing the Costs and Benefits of the CAA).
Based on our review of the current body of scientific literature, EPA estimated PM

- related mortality without applying an assumed concentratio n threshold. The PM Integrated Science Assessment, which was reviewed by EPA’s Clean Air Scientific Advisory Committee, concluded that the scientific literature consistently finds that a no

- threshold log

- linear model most adequately portrays the PM

- mortali ty concentration

- response relationship while also recognizing potential uncertainty about the exact shape of the concentration

- response function.
For response to concerns regarding the use of SCC to value reductions in CO 2 emissions, see response to commen ts EPA

- HQ

- OW

- 2009

- 0819

- 4473

- A1, Excepts 1 and 5 (in Section 29.b).

Cited Literature:
Pope, CA III, Burnett RT, Thun MT, Calle EE, Krewski DD, Ito K, and Thurston GD 2002. Lung cancer, cardiopulmonary mortality, and long

- term exposure to fine particulate air pollution. Journal of the American Medical Association 287:1132

- 1141.
Laden, F, Schwartz J, Speizer FE, and Dockery DW 2006. Reduction in fine particulate air pollution and mortality. American Journal of Respiratory and Critical Care Medicine 173:667

- 6 72.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 38 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 334 Commen t Excerpt:
Reduced mortality from exposure to NOx, SO2 and particulate matter and reduced CO2 emissions resulting in avoided climate change impacts: EPA also underestimates the benefits associated with reduced mortality from exposure to NOx, SO2 and p articulate matter (PM2.5) as well as from avoided climate

‐ change

‐ related impacts. EPA uses IPM modeling to determine air emissions reductions from the steam electric ELGs. The IPM analysis includes emission factors known to be highly variable and sometimes incomplete. 79 In addition, EPA assumes a linear relationship between CO2 emissions and benefits, which may underestimate the value of large changes in emissions. 80 EPA also uses the 2010

— now outdated

— per ton estimates of the social cost of carbon. In the latest estimates released by the Interagency Working Group, the 2020 social cost of carbon at the 3

‐ percent discount rate has risen from $27 to $45 (by 65 percent); 81 benefits of reduced CO2 emissions due to the proposed ELGs would, therefore, be 65 perce nt higher.
EPA points to several other deficiencies in their air quality analysis: “This analysis does not include all of the human health benefits associated with air pollution reductions because the benefits per ton estimates that were used are based onl y on mortality, and not morbidity endpoints. Thus the quantified human health benefits included in this analysis represent only a subset of the total potential health benefits expected to result from the proposed ELGs.” 82 Correction of these assumptions wo uld increase the expected benefits from reduced air emissions associated with this rulemaking. Assuming that Option 5 would have, at a minimum, the same air

‐ benefits as Option 4, raises the Option 5 benefits by 39 percent to $605 million. This single chang e raises the Option 5 benefit

‐ cost ratio from 0.19 to 0.26.

79 EPA Office of Inspector General Report No. 2006

‐ P

‐ 00017, ”EPA Can Improve Emissions Factors Development and Management.” March 22, 2006. And EPA Office of Inspector General Report No. 13

‐ P

‐ 0161, “EPA Needs to Improve Air Emissions Data for Oil and Natural Gas Production Sector.” February 20, 2013.

80 Benefit

‐ Cost Analysis, p.8

‐ 9, Table 8

‐ 9.

81 2010 Interagency Working Group 2020 social cost of carbon (in 2010$) is $28 (see Benefit

‐ Cost Analy sis, p.8

‐ 7, Table 8

‐ 6. 2013 Interagency Working Group 2020 social cost of carbon (in 2011$) is $46 (see h ttp://www.epa.gov/climatechange/EPAactivities/economics/scc.html) ; converted to 2010$ using the CPI

‐ U (see ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt).

82 Benefit

‐ Cost Analysis, p.8

‐ 9, Table 8

‐ 9.
Comment Response:
The commenter raises three key concerns regarding EPA’s analysis of the human health benefits

r esulting from air quality improvements.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 335 First, the commenter expresses concerns that the emission factors used in IPM are variable and incomplete. IPM does not use “emissions factors” per se for those pollutants that are direct output of the model, namely SO 2 , NO X , Hg, CO 2 , and HCl. For NOx and for the overwhelming majority of the fossil fleet (e.g., Electricity Generating Units (EGUs) larger than 25 MW), reported emissions are available through Continuous Emissions Monitoring and those historical emissions form the basis of EGU emissions projections. For SO 2 , projected unit level emissions are also based on permits. Only in those cases where historical reported emissions are not available (usually smaller oil and gas units) does IPM use available emission f actors and EPA strives to update and improve those emission factors with each IPM platform update based on the most current information and comments received. Therefore, for SO 2 and NO X (as well as for CO 2 , HG and HCl which are the direct outputs of the IP M model), uncertainty in emission rates is very low, especially for the large coal and natural gas units which makes up the overwhelming portion of the total emissions. For all EGUs, primary PM emissions are post

- calculated and the uncertainty associated w ith those primary PM emissions maybe somewhat higher than the direct model outputs of SO 2 and NO X. However, primary PM emissions from power sector are small compared to secondary PM formation in the atmosphere through photochemical processes. Detailed info rmation on IPM inputs, outputs and documentation can be found at: http://www.epa.gov/powersectormodeling/
The referenced report by the Office of Inspector General (footnote 79) relates to oil and gas production, not emissions resulting from the combustion of oil and gas in the electric power sector for which IPM is used. Further, the referenced OIG report covers inventories up through 2008. There have been many improvements since the referenced report was written.

Second, the commenter notes that EPA used o utdated values of the Social Cost of Carbon (SCC). These values were revised after EPA completed its analysis of the proposed rule. For the final rule, EPA used the revised SCC estimates to estimate the benefits of CO 2 emission reductions associated with E LG implementation (IWGSCC, 2013). See Chapter 7 of the BCA for details.
Third, the commenter notes that focusing strictly on mortality understates the benefits of air quality improvements. This would be true if it were the case. In fact, the benefit

- per

- to n estimates EPA used to estimate benefits reflect not only mortality but also morbidity endpoints (e.g., asthma); this limitation was erroneously left in Table 8

‐ 9 from a draft version, even though EPA had subsequently updated the benefit

- per

- ton values to provide a more comprehensive measure of the benefits. EPA apologizes for its oversight and any resulting misinterpretation. The final rule analysis uses benefit

- per

- ton estimates that reflect mortality and a variety of morbidity endpoints (see Chapter 7 o f the BCA).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 336 29.i. Benefits

– Benefits from reduced water withdrawals

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 18 External Review Flag: Economics/Benefits External Review Incorporated into Response: No
Comment Excerpt:
Potential water savings under Options 4 and 5 will have an especially constructive impact on water

- scarce regions of the U.S.

In the southeastern and southwe stern U.S., where the water

- energy nexus problem is most visible, the benefit of reduced water withdrawals will be especially useful. In the past decade, the southeast has experienced particularly acute drought conditions and continues to suffer problems

o f decreasing water availability. In the southwest, where surface water resources are stretched thin, there is little available to meet growing demand, including new power sector needs. Even without factoring in the exacerbating role of climate change, wate r supply conflicts involving several major Southwest cities

– including Denver, Albuquerque, Las Vegas, and Salt Lake City

– are considered highly likely by 2015. 35 Thus, if EPA selected Option 5, or at a minimum Option 4, as the final rule, the resulting wa ter savings will be especially helpful for those states facing deepening challenges posed by the water dependency of steam electric power plants.

35 Union of Concerned Scientists, The Energy

- Water Collision: Power and Water at Risk (June 2011).

Comment R esponse:
The commenter discusses issues of water scarcity in certain regions of the U.S. and argues that a final rule that reduces water withdrawals will help states facing such water issues. EPA agrees that reducing plant dependence on water can help im prove water scarcity issues or mitigate their effects. Reducing the quantity of intake water also benefit power plants directly by making the plants less susceptible to drought

- induced reduction in generation or unit closures and by reducing the cost assoc iated with finding replacement water sources. For more details on these impacts, see paper titled “Water Withdrawals in Water Stressed Areas: Impacts of the Steam Electric Effluent Limitations Guidelines” (DCN SE05943) in the record for the final steam ele ctric ELG rule.
Benefits would be highly location specific. EPA estimated that the final rule will reduce water withdrawals by 155 million gallons per day; relative to total surface water withdrawals for thermoelectric plants of 116 billion gallons per day in 2010 (Maupin et al, 2014) (which are primarily for cooling purposes), or a reduction of 0.1 percent.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 337 These changes are small, but will nonetheless marginally reduce the water dependency of steam electric power plants in water scarce regions.
Maupin, M. A., Kenny, J.F., Hutson, S.S., Lovelace, J.K., Barber, N.L., and Linsey, K.S., 2014, Estimated use of water in the United States in 2010: U.S. Geological Survey Circular 1405, 56 p., http://pubs.usgs.gov/circ/1405/.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 19 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Based on re sponses from the technical questionnaire of the Electric Steam industry survey, the Allen Steam Station, located in Belmont, NC and employing a wet fly ash handling system, reported that it generates approximately 9.61 MGD of fly ash transport water. The p lant also indicated that 100% of its source for fly ash transport water is intake water, none of which is recycled back to the plant process. If the Allen plant were to comply with the effluent limitations standard pursuant to Options 4 or 5, it would most likely convert its existing fly ash wet handling system to a dry handling method and potentially reduce its water use by 9.61 MGD. In addition, the Marshall Steam Station, located in Terrell, NC reported that it, too, uses wet fly ash handling methods and generates approximately 10.56 MGD of fly ash transport water. The Marshall plant also draws its fly ash sluice water from nearby surface waters, and does not engage in recycling. Thus, if this plant were to comply with Option 5, it too would be likely to convert to dry fly ash handling and reduce its water consumption by 10.56 MGD. Both these plants in North Carolina draw water from the Catawba River; hence, if Options 4 or 5 were selected as the final rule, it could potentially result in a combined water savings of 20 MGD for the Catawba River Basin, augmenting the reliability of cooling water supplies for power generation as well as enhancing public water supplies and recreation uses downstream in North and South Carolina.
Further responses from the techn ical questionnaire reveal that the Four Corners Generating Station, located near Fruitland, NM, uses a wet bottom ash handling system and generates 7.27 MGD of bottom ash transport water. The plant also indicated that 100% of the source for the bottom ash transport water is intake water, none of which are recycled back to the plant process. Hence, if Options 4 or 5 were selected as the final rule, this New Mexico plant would be expected to switch to a dry bottom ash handling system, and consequently, the pl ant would reduce its water use by 7.27 MGD. In an arid state like New Mexico, where access to water can be highly contentious, 7.27 MGD is a significant amount of water to be saved.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 338 The commenter discusses water withdrawals for pollutio n control technologies for specific plants and suggests that if each plant were to switch to a dry system there would be corresponding water savings.
EPA has accounted for reductions in intake water volumes associated with the conversions to dry fly ash an d/or dry bottom ash handling technologies and with plants recycling FGD wastewater as part of their treatment system (see Section 12.4 of the TDD for details). Chapter 8 of the BCA for the final rule discusses benefits of reducing water withdrawals.

Comm enter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The potential water savings resulting from the proposed guidelines may be particularly important for those regions of the U.S. where water is already in short supply. Given the enormous threat that steam electric power plants pose to the availability and quality of our water resources, any reductions in a plant’s dependency on water will yield significant environmental and economic benefits. Yet, EPA identified only one type of benefit associated with reduced surface water withdrawals , which the agency limited to a very minimal qualitative discussion. Moreover, EPA failed to even mention

– let alone quantify or monetize

– other associated benefits to reduced surface water withdrawals. EPA must provide an accurate analysis of the full env ironmental and economic benefits to be gained as a result of the proposed guidelines

– this is to ensure that in the end, the most environmentally protective regulatory option, which satisfies the BAT standard, will be chosen as the final rule.
Comment Resp onse:
EPA estimates that the final rule will reduce the use of water by 155 million gallons per day, relative to total surface water withdrawals for thermoelectric plants of 116 billion gallons per day in 2010 (Maupin et al, 2014), or a reduction in the order of 0.1 percent. Reductions in water withdrawals are relatively small, and the implied water savings are even smaller when considering net consumption of water by the plants.

EPA has accounted for reductions in intake water volumes associated with the conversions to dry fly ash and/or dry bottom ash handling technologies (see Section 12.4 of the TDD for details).
Small changes in withdrawals are expected to provide marginal benefits, particularly in regions that are prone to drought, as well as margina lly reduce the impingement and entrainment mortality from intakes. Reducing withdrawals is also expected to provide direct benefits to theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 339 power plants by reducing impacts of drought on their operations. For more details on these impacts, see paper titled “Water Withdrawals in Water Stressed Areas: Impacts of the Steam Electric Effluent Limitations Guidelines” (DCN SE05943) in the record for the final steam electric ELG rule. Because of the data limitations, EPA did not monetize the benefits. EPA discusses these benefits qualitatively in Chapter 8 of the BCA.
The commenter argues that all benefits associated with this change in surface water withdrawals should be quantified and monetized and then says that EPA must provide an accurate analysis of all benefit s in order to determine the regulatory option which satisfies the BAT standard. EPA notes that ELG determinations are based on the specific factors in the CWA (see preamble for details), but notes that when looking at the benefits of a regulation, EPA look s at all benefits, whether quantified and monetized or analyzed qualitatively.
Maupin, M.A., Kenny, J.F., Hutson, S.S., Lovelace, J.K., Barber, N.L., and Linsey, K.S., 2014, Estimated use of water in the United States in 2010: U.S. Geological Survey Circul ar 1405, 56 p., http://pubs.usgs.gov/circ/1405/.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 22 External Review Flag: Economi cs/Benefits External Review Incorporated into Response: No
Comment Excerpt:
In EPA’s Benefit and Cost Analysis 37 for the proposed guidelines, the agency identified “reduced impingement and entrainment mortality” as a type of benefit associated with reduc ed surface water withdrawals. However, EPA went on to state, “Due to data limitations, EPA did not quantify and monetize these benefits as part of this analysis.” 38 While we would like further explanation regarding why EPA could not quantify or monetize su ch benefits, we are more concerned with EPA’s failure to take into account other associated benefits to reduced surface water withdrawals in addition to reduced impingement and entrainment mortality. It is well

established that large water withdrawals have many adverse impacts, including but not limited to, lowering groundwater recharge or natural stream flow levels (thus impacting instream flow 39 ), and affecting fish, wildlife, or other living resources and their habitat. 40 Changes in instream flows in tur n affect surrounding property values and recreational use (discussed further below). Said another way, reducing withdrawals can restore natural flows (in particular for water bodies with low flow conditions) and thereby impact aquatic life, property prices , and recreation.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 340 37 U.S. EPA, Benefit and Cost Analysis for the Proposed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category (April 2013) (“BCA”).

38 BCA at 9

- 1.

39 Instream flow refers to the state in which water remains in its natural course as opposed to water that has been diverted artificially for other purposes.

40 U.S. Geological Survey, Simulation of the Effects of Water Withdrawals, Wastewater Return Flows, and Land

- Use Change on Streamflow in the Blackstone River Basin, Massachusetts and Rhode Island (2007); Susquehanna River Basin Commission, Low Flow Protection Policy Related to Withdrawal Approvals (Dec. 14, 2012).
Comment Response:
EPA discussed potent ial reductions in impingement mortality and entrainment (IM&E) in its qualitative assessment of the benefits of the ELGs. Impingement mortality occurs when fish and other aquatic life are trapped against the entrance of an intake structure and entrainment occurs when aquatic life is pulled into the cooling system, so it is possible that even a small reduction in surface water withdrawals by regulated plants may lead to a reduction in IM&E. However, the reductions in surface water withdrawals associated with the final rule are small, relative to total plant withdrawals. EPA estimates that the final rule will reduce the use of water by 155 million gallons per day; this represents a reduction in the order of 0.1 percent of the total surface water withdrawals fo r thermoelectric plants of 116 billion gallons per day in 2010 (Maupin et al, 2014). Furthermore, many of the plants with cooling water intake systems will be complying with the CWIS regulation which is expected to reduce impingement mortality and potentia lly reduce entrainment. To avoid double counting benefits already associated with the CWIS regulation, because of data limitations, and because IM&E benefits would be relatively small, EPA chose not to quantify and monetize IM&E reductions from the final r ule.

The commenter also takes issue with the fact that benefits from reduced water withdrawals other than IM&E were not considered. As mentioned above, the reduction in water withdrawals is relatively small, and the implied water savings would be even smal ler. EPA notes that the ash handling technologies are generally not “consumptive” processes, meaning that most of the water that is withdrawn from the receiving water is returned in the form of impoundment effluent discharges. Because of the data limitatio ns, EPA did not monetize the benefits. EPA discusses these benefits qualitatively in Chapter 8 of the BCA.
Maupin, M.A., Kenny, J.F., Hutson, S.S., Lovelace, J.K., Barber, N.L., and Linsey, K.S., 2014, Estimated use of water in the United States in 2010: U .S. Geological Survey Circular 1405, 56 p., http://pubs.usgs.gov/circ/1405/

.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 341 Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 24 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Streamflow levels can also influence recreation benefits through a variety of mechanisms. Flow levels directly influence of quality of whitewater boa ting experiences as well as stream aesthetics for general shoreline use. Streamflow at any given time affects fishing via influences on the locations, distribution, and behavior of fish and aquatic insects. Flow levels also directly affect recreation carry ing capacity

– for example, the number of anglers that can use the same stretch of river at any one time without congestion problems may increase with flow. Over time, streamflows affect fish stock levels and associated angler catch rates, as well as general recreation and aesthetics via effects on streamside vegetation. 42 There exists a vast amount of literature examining the recreation benefits of instream flows. Most, if not all, of the studies have confirmed that recreation value is directly correlated wi th protecting instream flows and/or increasing natural flows. 43 Furthermore, in these studies, the recreation value of instream flow has been monetized using a WTP methodology, measuring the maximum a person would be willing to pay in excess of actual trip costs rather than to forego the experience. 44

42 Brown, T.C., J.G. Taylor, and B. Shelby, Assessing the direct effects of streamflow on recreation: A literature review, Water Resource Bulletin, 27(6), 979

- 989 (1991).

43 Duffield, J.W., C. J. Neiler, and T.C. Brown, Recreation Benefits of Instream Flow: Application to Montana’s Big Hole and Bitterrot Rivers, Water Resources Research, Vol. 28, No. 9, pgs. 2169

- 2181 (Sept. 1992); U.S. Dept. of the Interior Bureau of Reclamation, Economic Nonmarket Valuation of Instream Flows (April 2001).

44 Id.
Comment Response:
As discussed in responses to other comments (DCN EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1, Excerpt Number 18), EPA expects that changes in the amount of water withdrawn by steam electric power plants will be s mall. Further, the vast majority of steam electric power plants withdraw and discharge to the same surface waters. Accordingly impacts on streamflow are expected to be marginal.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 342 Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defen se Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 26 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
There are various benefits to be gained from redu ctions in surface water withdrawals, and hence an improvement in water quality, for agriculture purposes. 48 Furthermore, there is ample evidence to show a significant direct correlation between water quality and surrounding property values. 49 Thus, if we o perate under the assumption that large amounts of withdrawals negatively affect water quality, then we can draw the logical conclusion that reducing water withdrawals may also yield the additional benefits of increasing agricultural productivity and proper ty prices.

48 Such agricultural benefits gained from a water quality improvement have been measured in two ways: through changes in price to consumers, and through changes in the incomes received by owners of inputs used in the production of the good. Se e id.

49 Steinnes, D.N., Measuring the Economic Value of Water Quality: The Case of Lakeshore Land.” Annals of Regional Science 26: 171

- 176 (1992) (concluding that water quality measures significantly impact property values and each additional unit of chan ge in Secchi disk readings (SDR)

– used as a measure of objective water quality

– resulted in a $206 change in average lot price near the lake).
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1, Excerpt Number 28.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 27 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excerpt:
We urge EPA to provide a more detailed explanation regarding why it failed to monetize and quantify the benefits of reduced impingement and entrainment mortality associated with reductions in surface water withdrawals.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 343 Comment Response:

See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1, Excerpt Number 22.

Commenter Name: Becky Hayat Commenter Affiliation: Natural Resources Defense Council (NRDC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1 Comment Excerpt Number: 28 External Revie w Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA must take into account other benefits associated with reduced surface water withdrawals, including but not limited to, healthier aquatic ecosystems, higher rec reational value, agricultural benefits, and increase in property values. EPA’s failure to quantify/monetize the one type of benefit it identified in relation to reduced surface water withdrawals, along with its undercounting of other associated benefits, r esults in an unfair balancing act where the agency weighs complete costs against incomplete benefits. This biased cost

- benefit analysis is especially troublesome for the most stringent regulatory options (e.g. Options 4 and 5) where EPA overestimated compl iance costs and blatantly underestimated the benefits.
Comment Response:
As discussed further in responses to other comments (e.g., DCN EPA

- HQ

- OW

- 2009

- 0819

- 4490

- A1, Excerpt Number 18), EPA expects that changes in the amount of water withdrawn by steam el ectric power plants will be small; accordingly quantity impacts on water availability for downstream water users or property owners are expected to be marginal. Given the magnitude of the changes, EPA analyzed the benefits of reductions in surface water wi thdrawals qualitatively (see Chapter 8 of the BCA for the final rule and paper titled “Water Withdrawals in Water Stressed Areas: Impacts of the Steam Electric Effluent Limitations Guidelines” (DCN SE05943) in the record for the final steam electric ELG ru le).

Commenter Name: Cathy S. Woollums Commenter Affiliation: MidAmerican Energy Holdings Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4495

- A1 Comment Excerpt Number: 45 External Review Flag: No External Review External Review Incorporated in to Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 344  When assessing benefits for reduced groundwater withdrawals, EPA relied on state

specific water prices in Florida and Nebraska to estimate the monetary value of reduced groundwater withdrawal. But according to EPA, these states are potentially or currently water

- stressed, resulting in above

- average water prices in comparison to the national average, and thereby an inflated benefit estimate.
Comment Response:
EPA disagrees with the commenter’s assertion that benefits ar e inflated because EPA used state

specific water prices. Only certain plants withdraw groundwater for their processes. Therefore, it is appropriate to use the water prices for the states in which each plant is located to estimate the monetary value of redu ced groundwater withdrawal for these plants.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 225 External Review Flag: No External Review External Re view Incorporated into Response: No
Comment Excerpt:
Additionally, the attached analysis from NRDC explains that EPA did not account for the significant benefits from Options 4 and 5 of reduced surface water withdrawals. 696 EPA calculated that power pla nts would reduce water use by 153 billion gallons per year, or about 419 million gallons per day, under Options 4 and 5, due to reductions in water use for handling ash transport and for the recycling of FGD wastewater. 697 Although power plant withdrawals of cooling water are substantially greater than this amount, the amount of process water that can be saved by the proposed rule’s two most stringent options is about as much water as is used by all the homes in North Carolina, 698 and thus a significant am ount of water to save with any single regulatory measure. The water savings resulting from the rule will be especially helpful for those states facing deepening water

- scarcity challenges caused by climate change. Yet EPA did not describe any of these benef its of the rule, let alone attempt to quantify or monetize them. Significant water withdrawals such as those from power plants have many adverse impacts, including lowering groundwater recharge or natural stream flow levels (thus impacting instream flow 699 ), and affecting fish, wildlife, or other living resources and their habitat. 700 Any measure that reduces surface water withdrawals, thereby restoring natural flows, provides both environmental and economic benefits. 701 Reduced withdrawals will either restore instream flows in areas with low flow conditions, or increase natural stream flows, both of which improve aquatic ecosystems and enhance recreational opportunities, such as by increasing fish stocks. 702

In addition, reducing surface water withdrawa ls may directly improve water quality, such as by increasing dilution of pollutants or decreasing temperature. 703 This increased water quality has the added benefit of increasing agricultural productivity and property values. 704Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 345 696 NRDC, Associated Wat er Savings and Benefits to Reduced Surface Water Withdrawals.

697 TDD at 12

- 13

– 12

- 14; Becky Hayat & Ed Osann, Natural Resources Defense Council, “Steam Electric Effluent Guidelines: Associated Water Savings and Benefits to Reduced Surface Water Withdrawa ls” (Sept. 20, 2013) [hereinafter “NRDC Memo”]. Option 4a would reduce water use by 103 billion gallons per year. TDD at 12

- 14. Options 3, 3a, and 3b would reduce water use by 52.7 billion, 49.9 billion, and 52.1 billion gallons per year, respectively. I

d. Options 1 and 2 would only reduce water use by 2.82 billion gallons per year each. Id.

698 NRDC Memo at 1 (citing Kenny, J.F., Barber, N.L., Hutson, S.S., Linsey, K.S., Lovelace, J.K., and Maupin, M.A., 2009, Estimated use of water in the United States in 2005: U.S. Geological Survey Circular 1344).

699 Instream flow refers to the state in which water remains in its natural course as opposed to water that has been diverted artificially for other purposes.

700 NRDC Memo at 1 (citing U.S. Geological Surve y, Simulation of the Effects of Water Withdrawals, Wastewater Return Flows, and Land

- Use Change on Streamflow in the Blackstone River Basin, Massachusetts and Rhode Island (2007); Susquehanna River Basin Commission, Low Flow Protection Policy Related to Wi thdrawal Approvals (Dec. 14, 2012)).

701 Id. at 9

- 11.

702 Id. at 10.

703 Id. at 10

- 11.

704 Id. at 11.
Comment Response:
EPA agrees with the commenter’s points that there are a number of potential benefits associated with a reduction in surface water withdrawals.
However, these benefits, such as improved water quality from dilution, instream flows, and groundwater recharge are mostly a function of net changes in water volume. EPA estimates that the final rule will reduce the use of water by 155 million gallons per day (see Section 12.4 of the TDD for details), relative to total surface water withdrawals for thermoelectric plants of 116 billion gallons per day in 2010 (Maupin et al, 2014), or a reduction in the order of 0.1 percent. Reductions in water w ithdrawals are relatively small, and in

- stream effects are even smaller when considering net consumption of water by the plants.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 346 Small changes in withdrawals may provide marginal benefits, particularly in regions that are prone to drought, as well as margi nally reduce the impingement and entrainment mortality from intakes. Reducing withdrawals is also expected to provide direct benefits to the power plants by reducing impacts of drought on their operations. For more details on these impacts, see paper title d “Water Withdrawals in Water Stressed Areas: Impacts of the Steam Electric Effluent Limitations Guidelines” (DCN XX ) in the record for the final steam electric ELG rule. Because of the data limitations, EPA did not monetize these benefits, but describes t hem qualitatively in Chapter 8 of the BCA.
The commenter compares water withdrawal reductions to North Carolina residential water use. EPA offers that the metrics are not equivalent in their effect and the comparison is therefore not appropriate. In 2010, domestic water withdrawals and deliveries for North Carolina totaled 668 million gallons per day, which exceeds the water withdrawal reductions estimated for the final rule. The water withdrawal reductions for the final rule will occur at plants distribute d across the United States with impacts spread across a number of waterbodies and watersheds.
Maupin, M.A., Kenny, J.F., Hutson, S.S., Lovelace, J.K., Barber, N.L., and Linsey, K.S., 2014, Estimated use of water in the United States in 2010: U.S. Geologica l Survey Circular 1405, 56 p., http://pubs.usgs.gov/circ/1405/.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 347 29.j. Benefits

– Total benefits

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The benefits of cleaning up this pollution far outweigh the costs. EPA's own cost benefit analysis, which we believe undercount o r do not monetize many of the benefits of cleaning up this harmful pollution, demonstrates the benefits of a strong rule. These benefits include the health benefits of restoring hundreds of miles of our rivers so that their fish are safe to eat and pregna nt women and children are exposed to less harmful mercury and lead, not to mention benefits to wildlife, drinking water quality, recreation and tourism, and property values.
Comment Response:
EPA thanks the commenter for the support for the regulations t o reduce the discharge of harmful pollution to surface waters.
The Agency has been as comprehensive as possible in its analysis given limitations in data and information and tools for estimating benefits. EPA estimated annualized benefits of the final rule ranging between $450.6 million and $565.6 million (using a 3 percent discount rate), as compared to annualized costs of $479.5 million. Using a 7 percent discount rate, the annualized benefits range between $387.3 million to $478.4 million, as compared to costs of $471.2 million. The Agency provided detailed discussion on additional, non

- monetized benefit categories. The BCA provides detail on the health, ecological, and economic benefits associated with the final regulation, including additional benefit c ategories not presented at proposal.

Commenter Name: Public Hearing Transcript Commenter Affiliation: Public Hearing Transcript Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 3920

- A1 Comment Excerpt Number: 19 External Review Flag: No External Review E xternal Review Incorporated into Response: No
Comment Excerpt:
Stringent limitations on power plant effluent could pass many benefits onto Virginians, including cleaner water, improved public health, reduced environmental degradation, and job creation wi th minimal cost to ratepayers.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 348 Comment Response:
EPA agrees that reducing power plant pollutant discharges will confer many benefits in Virginia and elsewhere. For more detail on the health, ecological, and economic benefits associated with the final reg ulation, see the BCA for the final rule.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 1 External Review Flag: No External Review Exte rnal Review Incorporated into Response: No
Comment Excerpt:
we have found that substantial portions of both the monetized and non

- monetized benefits asserted by the US EPA are overstated or not adequately detailed, calling into question whether the prop osed rule is adequately supported.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 13 (Section 29.b) regarding the concern that EPA substantially overstated expected cost reductions quantified as benefits of the final rule, and details provided in supporting documents.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2 Comment Excerpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Air

- related benefits, which are tangential to an analysis of utility related effluent discharge, are a significant driver in the benefits analysis, accounting for 18

- 40% of the total benefits under the evaluated regulatory options. Furthermore, these estimates are highly uncertain because of the numerous model assumptions that are needed to calculate these benefits.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 349 EPA disagrees that air

- related benefits are tangential to the analysis, but acknowledges that these benefits are indirect (i.e., a large share of these benefits arise from changes in the emissions profile of the industry as a result of anticipated actions by the industry in response to the regulatio n).
The Agency notes that including benefits of reduced air emissions in the total benefit estimate is consistent with the Office of Management and Budget’s (OMB) guidance to Federal agencies on the development of regulatory analysis (Circular A

- 4). The OM B guidance specifically states that benefit cost analysis should identify and account for “ancillary benefits of the proposed regulatory action and the alternatives.”
For a more detailed response on the uncertainty, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 204 (section 29.h).

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Valuation of the benefits of regulation involves a sequence of stages, each of which can be the locus of uncertainty. Three main stages can be distinguished:

 An event , such as release of a pollutant, occurs

.

 The event has a health or environmental impact on a human or natural receptor.

 A monetary valuation is assigned to the impact.
For example, there could be uncertainty about whether and to what extent a coal ash impoundment or landfill failure, or other u nplanned release of polluted wastewater, will occur (and more particularly, uncertainty about whether a proposed ELG standard affects the likelihood of such a release); subsequent uncertainty about the health or environmental impact of any toxic chemicals released in that event; and finally, uncertainty about appropriate monetary valuation of those impacts, once they have occurred.
Monetization: Are uncertain values always zero?
Another problem with benefits calculations is perhaps even more serious than t he uncertainty in physical risks. In order to enter a benefit

‐ cost calculation, benefits must be not only quantified, but also monetized. EPA maintains relatively strict and demanding standards for monetization; the default for benefit categories that can not meet the standard is a qualitative discussion with a zero value. While often informative, EPA’s qualitative discussions of suchEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 350 benefits do not result in numerical valuations, and are therefore treated as equivalent to a finding of zero in any simple summary of benefits and costs. This imparts an asymmetric bias to the overall calculations: There is no comparable category of costs that default to zero for lack of data; there are no offsetting categories of benefits where there is a structural bias tow ard overestimation.
The difficulty in monetization results from the artificial, synthetic nature of benefits valuations. One of the widely discussed virtues of a market economy is that up

‐ to

‐ date prices for marketed goods are continually available to all, at little or no cost; it is difficult to imagine another system that provides equally timely, inexpensive information on prices. It is unfortunately clear that environmental economics has not come close to matching that performance in pricing non

‐ marketed health and environmental benefits. Research standards for monetizing benefits are sufficiently demanding that EPA frequently relies on “benefit transfers”

– that is, making the best available approximations based on the published literature on valuation o f similar benefits experienced elsewhere.
Even with extensive use of benefit transfer calculations, there are large gaps remaining in the valuation of benefits, due to inherent limitations of quantification and/or monetization. In the benefit

‐ cost analysi s conducted for the proposed steam electric ELGs, numerous benefits are effectively valued at zero dollars due to lack of data, including the following examples:
EPA expects that there would also be material health benefits via the fish consumption pathwa y arising from reduced discharges of other steam electric pollutants, such as cadmium, selenium, and zinc. Analyses of these health benefits are not possible due to lack of data... 49

EPA quantified but did not monetize the expected reduction of pollutant con centrations in excess of human health

‐ based aquatic water quality criteria (AWQC) limits. 50

By reducing discharges of pollutants to receiving reaches, the proposed ELGs would reduce the future contamination of waterbody sediments, thereby mitigating impact s to benthic organisms and reducing the probability that the pollutants would later be released into the water column and affect surface water quality and the waterbody food chain. Due to data limitations, EPA did not quantify or monetize this benefit. 51

E PA did not quantify or monetize benefits from enhanced quality of drinking and agricultural water sources arising from the proposed ELGs due to data limitations. 52

Reduced surface water intake would reduce impingement and entrainment mortality. Due to data limitations, EPA did not quantify and monetize these benefits as part of this analysis. 53

The last of these example omissions is particularly striking, since in other proceedings EPA has devoted extensive effort to quantification and monetization of chang es in impingement and entrainment mortality, due to changes in cooling water intake systems. It should have been possible to arrange a “benefits transfer” between different parts of EPA itself.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 351 The asymmetric bias in benefits monetization, with substantial benefit categories omitted from monetization (implicitly valued at zero) but no comparable offsetting bias in the other direction, causes a fundamental distortion in bottom

‐ line benefit

‐ cost estimates. The virtue of benefit

‐ cost analysis, in theory, is th at it provides objective, transparent comparison of costs and benefits, calculated on an equal footing. This requires comparably complete estimates on both sides. There is no theoretical argument for the use of an “overestimated cost

— incomplete benefit”

es timate; no useful conclusion can be drawn from the finding that relatively complete estimates of costs exceed substantially incomplete estimates of benefits. 54

As the above quotes from EPA confirm, the benefit

‐ cost calculations for the proposed steam elect ric ELGs are indeed comparisons of complete and often over

‐ estimated costs with incomplete benefits. The bottom

‐ line estimates presented in this case are the estimates that would apply if all the un

‐ monetized benefits were known to be worth precisely zero

— which is a very different state of knowledge from genuine uncertainty about the magnitude of these important but hard

‐ to

‐ measure (and sometimes impossible

‐ to

‐ measure) categories. EPA presents no argument that the un

‐ monetized benefits are all worthless; no r could it, as many of them are of obvious value. As a result, the conclusion is inescapable that EPA’s bottom

‐ line comparisons of costs and benefits are fundamentally wrong, albeit by uncertain amounts.

49 U.S. Environmental Protection Agency, Benefit a nd Cost Analysis for the Proposed Effluent Limitation Guidelines and Standards for the Steam Electric Power Generating Point Source Category, EPA

‐ 821

‐ R

‐ 13

‐ 004, April 2013; hereafter, Benefit

‐ Cost Analysis; p.2

‐ 4.

50 Benefit

‐ Cost Analysis, p.2

‐ 5.

51 Benefi t

‐ Cost Analysis, p.2

‐ 8. Receiving reaches are areas into which effluents are discharged.

52 Benefit

‐ Cost Analysis, p.2

‐ 10.

53 Benefit

‐ Cost Analysis, p.2

‐ 11.

54 Ackerman, F. and L. Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing (New York: New Press, 2004).
Comment Response:
EPA disagrees with the commenter that its comparison of costs and benefits in the final rule are “fundamentally wrong.” The commenter notes several categories of benefits that EPA was not able to monetize in the benefit analysis, and EPA agrees with the co mmenter that the listed benefits are real and of critical ecological, social, and economic importance. EPA notes that the Agency has expanded its benefits analysis for the final rule to include additional categories not monetized in the proposed rule, incl uding reduced incidence of cardiovascular disease from exposure to lead and arsenic, avoided cost of maintenance dredging of reservoirs and navigational waterways, and increased marketing of coal combustion residuals for beneficialEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 352 reuse (see Chapters 3, 9 and 10 in the BCA). However, the Agency was not able to quantify and monetize several of the categories listed by the commenter due to data and methodological limitations. Chapter 2 of the final BCA provides detailed qualitative discussion and, in some

ca ses, screening level analyses for non

- monetized benefit categories. The Agency has been as comprehensive as possible in its analysis given limitations in data and information and tools for estimating benefits, and appropriately documented the associated un certainties.
Regarding impingement and entrainment mortality benefits specifically, EPA agrees with the commenter that benefit transfer from the 316b benefits analysis is possible in principle to estimate benefits of reduced water withdrawal. However, as d iscussed in Chapter 8 of the BCA, given the intake volume affected by the ELG (i.e., 147 million gallons per day for the final rule, which is approximately 0.1% of the total intake volume affected by the 316b rule) the expected benefits to aquatic life are likely to be minimal. The Agency however, evaluated potential benefits of reducing water use in power plant operations to the regulated facilities located in water stressed zones (see DCN SE05943).
EPA disagrees with the commenter that benefits that canno t be quantified or monetized imply that these benefits have no value, EPA fully documents limitations of cost

- benefit analysis in the record for the rule.
For information on the role of benefits analysis in establishing effluent limitations based on Best A vailable Technology Economically Achievable (“BAT”), see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4464

- A1, Excerpt Number 3.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Commen t Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Benefits assigned monetary values by EPA
EPA enumerates 23 benefits from water pollution reductions due to the proposed steam e lectric ELGs, fifteen of which are monetized (see Table 7 below). Of these, thirteen benefits have been

— by EPA’s own account

—underestimated in the total monetary benefits of the regulatory options; just one is overestimated. The dollar values attributed t o each benefit are summed to the total monetized value of each option (see Table 8 for a summary by each benefit category). EPA provides a summary description of its benefits in Table 2

‐ 1 of the Benefit

‐ Cost Analysis

. 75

Under Option 4, 49 percent of all mo netized benefits (including air

‐ related benefits) are derived from reduced impoundment failures, 28 percent from reduced air pollution, and 19 percent fromEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 353 improved ecological conditions. The remaining benefits

—human health, groundwater quality, and reduce d water withdrawals

— are assigned just 4 percent of the total monetized benefits of the proposed ELGs. EPA calculated the benefit of reduced air pollution due to the proposed steam electric ELGs only for Options 3 and 4, and, from this, imputed this benefit for Options 3a, 3b, and 4a.
Here we review the benefits for the proposed steam electric ELGs that EPA identifies as underestimates.
Table 7. Proposed steam electric ELG benefits (as discussed in EPA Benefit

‐ Cost Analysis )

Benefit Inclusion Quantification Monetization
Reduced incidence of cancer from reduced exposure to arsenic from fish consumption Included Quantified (Low) Montized (Low) Reduced IQ losses to infants from reduced in

‐ utero mercury exposure from maternal fish consumption Included Quantified (Low) Monetized (Low)

Reduced IQ losses to children ages 0 to 7 from reduced childhood exposure to lead from fish consumption Included Quantified (Low) Monetized (Low)

Reduced need for specialized education from reduced childhood exposure to lead from fi h consumption Included Quantified (Low) Monetized (Low)

Reduced mortality from exposure to NOx, SO2 and particulate matter (PM2.5) Included Quantified (Low) Monetized (Low) Improved aq uatic and wildlife habitat from improved ambient water quality in receiving reaches Included Quantified (Low) Monetized (Low)

Enhanced swimming, fishing, boating, and near

‐ water activities from improved water quality Included Quantified (Low) Monetized (Low) Increased aesthetics from improved water clarity, color, odor, including nea by site amenities (residing, working, traveling) Included Quantified (Low) Monetized (Low)

Enhanced existence, option, and bequest values from improved ecosystem health. I ncluded Quantified (Low) Monetized (Low) Reduced risks to aquatic life from exposure to steam electric pollutants Included Quantified (Low) Monetized (Low) Improved T&E habitat and thus potential increase in T&E population Included Quantified (Low) Monetized (Low)

Reduced air emissions of CO2 resulting in avoided climate change/global warming impacts Included Quantified (Low) Monetized (Low)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 354 Increased availability of groundwater resources from reduced groundwater withdrawals Included Quantified (Low) Monetization

(Uncertain) Reduced groundwater contamination Included Quantified (Low) Monetized (High) Reduced risk of impoundment failures due to changes in the use of impoundments Included Quantified (Low) Monetization

(Uncertain)

Source: Benefit

‐ Cost Analysis, pp.2

‐ 12 and 2

‐ 13, Table 2

‐ 1; authors’ analysis
Table 8. Annualized monetized benefits of steam electric ELGs (millions of 2010$)
Monitized Value of Benefits in Million 2010$, all Values at Mean Benefit Estimates and 3 Percent Discount Rate Benefit Category Option 1 Option 2 Option 3 Option 4 Option 5 Reduced Impoundment Failures $62.1 $62.1 $114.8 $295.1 $295.1
Reduced Air Pollution omitted omitted $127.6 $170.5 omitted Improved Ecological Conditions and Recreational Uses $15.3 $45.0 $59.9 $116.1 $115.2

Human Health Benefits $3.9 $4.0 $7.7 $17.2 $17.2 Groundwater Quality Benefits $0.7 $0.7 $1.6 $6.5 $6.5
Reduced Water Withdrawals $0.0 $0.0 <0.1 $0.1 $0.1
Total benefits, Excluding Air

‐ Related Benefits $82.0 $111.7 $184.1 $435.0 $434.1

Total Benefits (Including Air

‐ related Benefits) n/a n/a $311.7 $605.5 n/a

Note: All values at mean benefit estimates and 3

‐ percent discount rate Source: 78 Fed. Reg. at 34,518, Table XIV

‐

8

75 Benefit

‐ Cost Analysis, p.2

‐ 13.
Comment Response:

The commenter provides a summary of the benefit categories monetized in the BCA for the proposed rule, and notes that several of them are underestimated. As was the case for the proposed rule, EPA acknowledges that it made several conservative assumptions in the benefits analyses for the final rule, as discussed in the BCA. The Agency has been as comprehensive as possible in its analysis given limitations in data and information and tools for estimating benefits, and appropriately documented the associated unc ertainties.
In addition, EPA has expanded the categories of benefits that are quantified and monetized and updated its analyses for the final rule, including the analysis of human health, surface water quality, and economic productivity benefits. Appendix A of the BCA highlights the additions.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 355 For more details on changes EPA made to the benefit analysis of the final rule to address comments, also see response to related comment DCN EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1, Excerpt Number 13.

Commenter Name: Thomas Cm ar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 35 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Reduced surface water withdrawals and consumptive use: EPA calculated that power plants would reduce water use by 153 billion gallons per year, or about 419 million gallons per day, under Options 4 and 5, due to reductions in water use for ash transport and recycling of F GD wastewater. 73 Although power plant withdrawals of cooling water are substantially greater than this amount, the amount of process water that can be saved by these effluent guidelines is about as much water as is used by all the homes in South Carolina, 7 4 and thus a significant amount of water to save with any single regulatory measure. The water savings resulting from the rule will be especially helpful for those states facing deepening water

‐ scarcity challenges caused by climate change. Yet EPA did not describe any of these benefits of the rule, let alone attempt to quantify or monetize them.

73 TDD at 12

‐ 13

– 12

‐ 14.

74 Kenny, J.F., Barber, N.L., Hutson, S.S., Linsey, K.S., Lovelace, J.K., and Maupin, M.A., 2009, Estimated use of water in the United States in 2005: U.S. Geological Survey Circular 1344.
Comment Response:
EPA agrees with the commenters that reduced surface water withdrawals may result in ecological and economic productivity benefits. For the final rule analysis, EPA quantified the

re duced water intake as part of its analysis of the non

- water quality impacts of the rule. EPA also expanded on its discussion of the potential benefits arising from reduced water withdrawals associated with ash transport and FGD wastewater. The assessment i ncluded discussion of the potential benefits to regulated facilities located in water stressed areas (see DCN SE05943 in the docket for the final rule).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 356 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: E PA

- HQ

- OW

- 2009

- 0819

- 4686

- A1 Comment Excerpt Number: 42 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Of sixteen benefits quantified by EPA, fifteen are assigned monetary values and included in th e total monetized benefits of the regulatory options. While the benefit from “reduced other adverse health effects (cancer and non

‐ cancer) from reduced exposure to other pollutants (arsenic, lead, etc.) via fish consumption” is quantified (albeit a low est imation), EPA was unable to complete the monetization step; as a result, this benefit is effectively assigned a zero dollar value in the total monetized benefit of the regulatory options.
It is important to note that for all of the benefits, the monetizat ion step extends any underestimation from the quantification step. As a result, a low estimation during quantification results in an undervaluation of the final monetized benefit even when the monetization method is based on the most accurate assumptions a nd techniques possible.
Comment Response:
EPA agrees with the commenter that some human health benefits were omitted from the proposed rule analysis and, as a result, health benefits of the proposed rule were likely understated. For the final rule, EPA q uantified and monetized additional non

- cancer health benefits; specifically, the Agency estimated the benefits to adults of reduced cardiovascular mortality from exposure to lead and arsenic via fish consumption. These analyses are described in greater det ail in Sections 3.4 and 3.7, respectively, of the BCA for the final rule. Although EPA has been as comprehensive as possible in its analysis of benefits, some human health benefits could not be estimated given limitations in available data and methods. Cha pters 2 and 3 in the BCA discuss the remaining limitations of the human health benefits analysis.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 357 31. Numeric Limits

Commenter Name: Doris Cooksey Commenter Affiliation: City Public Service of San Antonio (CPS Energy) Document Control Number: EPA

- HQ

- O W

- 2009

- 0819

- 4283

- A1 Comment Excerpt Number: 17 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The limits proposed for mercury and selenium will be very difficult to achieve on a daily basis and difficult for labs to analyze accurately. EPA states that while the limits are stringent, a well operated plant should be capable of complying with the effluent limitations at all times, which is not accurate. If the daily maximum limitation is set at the 991h percentile of daily measurements and the monthly average limitation is set at the 951h percentile of the distribution of monthly averages, the statistical result is one exceedance every twenty months.
Comment Response:
EPA disagrees with the co mment’s assertion that the limitations will be difficult to achieve. EPA’s analysis concluded that plants would be able to meet the effluent limitations at all times. The statistical analysis is designed to identify the long term average which is what pl ants should design for to meet the limitations. EPA also does not agree that the limitations based on 99 th and 95 th percentiles mean that plants would be expected to exceed the effluent limitations at times. See Appendix A, Essay Section 5 and the Statist ical Support Document for Effluent Limitations. In addition, EPA does not agree that laboratories will have difficulty analyzing the wastewater and quantifying the analytical result at the level needed to demonstrate compliance.
For example, EPA Method 163 1E can measure mercury at very low concentrations with a quantitation limit of 0.5 nanogram/liter (ng/L), orders of magnitude lower than the effluent limitation. Plants have not had difficulty obtaining quantified results at very low levels in FGD wastewat er. See, e.g., the EPA sampling data, CWA 308 sampling data, and self

- monitoring data submitted by industry and used for calculating the effluent limits. These data are compiled in DCN SE06277 and summarized in DCN SE05733. Also see the wastewater treatmen t system data submitted by AEP for the Mountaineer Plant (data submittal dated March 2104).
The quantitation limit for selenium is also sufficiently below the effluent limitations that plants will be able to obtain laboratory results that demonstrate compl iance. The monthly average limitation is 12 ug/L month; 23 ug/L daily maximum. EPA Method 200.8 is a sensitive analytical method capable of quantifying selenium at low concentrations. A study EPA conducted prior to collecting data for the purpose of establ ishing effluent limitations, which was done to develop laboratory standard operating procedures, demonstrated that the method can be used to quantify selenium in the FGD wastewater matrix and that typical well

- operated laboratories would be able to quantif y concentrations of selenium down to at least 5 ug/L. In practice, based on the data EPA has compiled for this rulemaking, laboratories are often able to quantify the concentrationEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 358 of selenium at levels much lower than 5 ug/L (see, e.g., self

- monitoring da ta submitted by Duke Energy and AEP).

Commenter Name: Chris M. Hobson Commenter Affiliation: Southern Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment Excerpt Number: 170 External Review Flag: No External Review External Review In corporated into Response: No
Comment Excerpt:
Proposed Limits Are Not Supported By the Record EPA proposes the following limits for FGD wastewater at existing power plants.

Pollutant Units of

Measure Daily Maximum

Limit Monthly Average

Limit Total Arsenic μg/L 8 242 Total Mercury ng/L 242 119 Total Selenium μg/L 16 10 Nitrate/Nitrite as N mg/L 0.17 0.13

As discussed below, an exceedance frequency analysis of these limits indicates that the limits cannot consistently be met even by Allen and Belews Creek, the two proposed BAT plants.
Comment Response:
EPA disagrees with the comment’s interpretation of exceedance analyses, as discussed in Appendix A, Essay Section 4.1.3 and Section 5. EPA also disagrees that “limits cannot consistently be met even by Allen and Belews Creek.” EPA expects well operated and designed facilities to be capable of complying with the final limitations, as described in Essay Section 5. EPA notes that commenters submitted additional effluent data for FGD wastewater in c omments on the proposed rule and EPA used this expanded dataset to calculate effluent limits for the final rule. EPA’s engineering review of the effluent limits for the final rule, the effluent data, and other wastewater characterization data and treatment system process information, concluded that plants would be able to meet the effluent limitations. See DCN SE05733.

Commenter Name: Chris M. Hobson Commenter Affiliation: Southern CompanyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 359 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment E xcerpt Number: 172 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s selection of datasets omitted years of relevant data from the model plants. EPA removed valid data pointsrepresenting eleva ted concentrations that would be expected in the tails of the distributions. EPA substituted baseline values for reported measurements which had the effect of reducing estimated variability factors. EPA used inappropriate statistical methods for estimating under lying parameters of the Delta LogNormal distribution which resulted in underestimates of variability factors. For selenium and nitrate/nitrite, EPA abandoned the Delta LogNormal distribution and treated all reported values as if they were above the detection limit causing variability factors to be biased low. As implemented, EPA’s series of procedures systematically reduced estimates of long term averages and variability factors, and consequently reduced calculated limits.
Comment Response:

EPA dis agrees with the comment’s assertions that it omitted “years of relevant data from the model plants” and that EPA has removed valid data points. EPA notes that the dataset used to calculate the BAT effluent limitations for FGD wastewater is expanded from th e dataset used at proposal, as a result of comments and data submitted on the proposed rule. Both the data submitted after proposal and the data EPA used at proposal were carefully evaluated to ensure they were valid analytical results and were representat ive of the BAT technology that is the basis for the effluent limitations. In some cases, EPA determined that the data were not appropriate for use in calculating the limitations. See Appendix A, Essay Section 3.4 and DCN 05733.
EPA disagrees that it applie d inappropriate statistical methods. EPA’s statistical methodology and the basis for that methodology are explained in Essay Section 4 and Section 13 and Appendix B of the TDD. EPA also does not agree that, when calculating the effluent limitations, it ina ppropriately substituted baseline values for reported results that were below a specified value. EPA’s methodology and rationale for incorporating baseline substitution was clearly explained at proposal. However, in response to comments, EPA reevaluated ba seline substitution and determined that certain adjustments were warranted; the effluent limitations for the final rule reflect these adjustments. See DCN SE05733 and Essay Section 3.5. Based on comments, EPA also made a correction to the autocorrelation p rocedure (see Essay 4.1.1 for a discussion of autocorrelation).
EPA disagrees that the procedures used systematically reduced estimates of long term averages and variability factors, and consequently reduced the calculated limits. For example, where for th ose instances where commenters argue that baseline substitution resulted in reducing the variability of the dataset, they fail to also mention that the substitution actually increased the long

- term average. Regardless, the final rule addresses the comment er’s concern in this regard. EPA notes that the effluent limitations for the final rule are higher than the proposed limitations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 360 Commenter Name: Jared Morrison Commenter Affiliation: Westar Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4469

- A1 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The numeric limits within the guidelines will be difficult to consistently and accurately measure for regulatory purposes.
Comment Response:
EPA does not agree. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4283

- A1, Excerpt Number 17. In addition to the information regarding mercury and selenium in the referenced response, EPA notes that the quantitation levels for arsenic an d nitrate

- nitrite as N are also substantially lower than the effluent limitations. EPA’s study to develop laboratory standard operating procedures for EPA Method 200.8 demonstrated that the method can be used to quantify selenium in the FGD wastewater matr ix, and that typical well

- operated laboratories would be able to quantify concentrations of arsenic down to at least 2 ug/L. Nitrate

- nitrite as N can be measured as low as 0.05 mg/L using EPA Method 353.2.
EPA notes that the comment doesn’t identify any sp ecific barriers that would create difficulties for facilities to “consistently and accurately measure for regulatory purposes.”

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 39 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

E. EPA’s Proposed Limits for FGD Wastewater are Not Supported by the Data and Result from Flawed Sta tistical Approaches
Similarly, and as further detailed in the UWAG Comments, flaws in the data relied upon in limitation development are compounded by inappropriate EPA statistical analysis. For example, EPA proposes the following limits for FGD wastewater at existing power plants.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 361 Pollutant Units of

Measure Daily Maximum

Limit Monthly Average

Limit Total Arsenic μg/L 8 6 Total Mercury ng/L 242 119 Total Selenium μg/L 16 10 Nitrate/Nitrite as N mg/L 0.17 0.13

An exceedance frequency analysis of these limits undertaken by UWAG consultant, AKRF, Inc., as described in more detail in the UWAG Comments, indicates that the limits cannot consistently be met even by Allen and Belews Creek, the two model plants that EPA used to set the proposed limits.

Co mment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4283

- A1, Excerpt Number 17.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Num ber: 15 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Key Comments on Statistical Approach Used to Determine Proposed Numeric Limits

EPA underestimated the standard deviations in its statistical approach to determine long

- term averages, variability factors, and effluent limitations and standards. The underestimated standard deviations further propagate and impact the variability factors and ultimately, the regulatory limits and standards.

 Use of small data sets leads to underestimation of standard deviations, and hence, underestimation of regulatory limits.

 The same data used to compute limits in the rulemaking were also used to determine what percent exceeded limits.

 Since the option long

- term av erage is defined as the median of the plant

- specific long

term averages, 50% of the current plants will have an average that is above the median, leading to a limitation that will also be exceeded more frequently by existing data.

 Additional information is needed to use the correlation coefficient to adjust the variability factor.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 362  The modified delta

- lognormal distribution used by EPA to compute the percentiles for censored data does not give accurate results when non

- detects are present.

 Averaging a 4

- day event to obtain a single number incorrectly decreases variability, as compared to using a single monthly sample.

 Treating all data that are less than the quantitation limit as one

- half of the sample

- specific quantitation limit for all analytes decreases th e variability of the resulting estimates, leading to a standard deviation of the fitted distribution that is too low.

 Averaging duplicates reduces variability compared to what is actually measured.
Comment Response:

EPA addresses each of the comment’s bu lleted items in the Essay as follows:

 Use of small data sets leads to underestimation of standard deviations, and hence, underestimation of regulatory limits.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 65.

 The same data used to compute limits in the rulemaking were also used to determine what percent exceeded limits.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 132.

 Since the option long

- term average is defined as the median of the pl ant

- specific long

term averages, 50% of the current plants will have an average that is above the median, leading to a limitation that will also be exceeded more frequently by existing data.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Num ber 133

 Additional information is needed to use the correlation coefficient to adjust the variability factor.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 134.

 The modified delta

- lognormal distribution used by EPA to compute the per centiles for censored data does not give accurate results when non

- detects are present.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 66.

 Averaging a 4

- day event to obtain a single number incorrectly decreases variability, as compared to using a single monthly sample.

o See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 135Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 363  Treating all data that are less than the quantitatio n limit as one

- half of the sample

- specific quantitation limit for all analytes decreases the variability of the resulting estimates, leading to a standard deviation of the fitted distribution that is too low.

o The comment is incorrect in stating that EPA h as substituted 1⁄2 of the sample

specific quantitation limit in developing the limitations. For non

- detected observations, EPA’s methodology used either the sample

- specific reporting limit for that observation, or substituted a baseline value. See Essay Sect ion 3.5 and DCN SE05733.

 Averaging duplicates reduces variability compared to what is actually measured.

o See Essay Section 3.3.

Commenter Name: S. Dear Schramm

- Satayathum Commenter Affiliation: Wabash Valley Power Association, Inc. (WVPA) Document Con trol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4534

- A2 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Further, the limit for arsenic of 4 μg/L is equivalent to the quantitation limit

– this is very low. The quantitation limit allows for bias and imprecision in the test method. The Technical Development Document also states that for arsenic, ‘...the limitations for gasification wastewater based on vapor

- compression are each based on dat a from one plant. As such, the option long

- term averages and variability factors for these options are the same as the plant

specific long

- term averages and variability factors. Also, in special cases where there are too few detected results, the statistic al models are not appropriate for calculating limitations since reliable estimates could not be obtained from the models. In such instances, EPA has established the daily maximum limitations based on the detection limit (i.e., “minimum level”). Also, month ly average limitations are not established when the daily maximum limitation is based on the detection limit.’ 6 For all effective purposes, it is possible for a gasification plant to not meet the proposed standard if arsenic is detected at all in the waste stream.

6 Id at Section 13.8.2, Page 13

‐ 21 to 13

‐ 22.
Comment Response:
EPA does not agree that the effluent limitations for gasification wastewater are too stringent, nor with the commenter’s implication that bias and imprecision in the test method may contribute to a gasification plant not meeting the effluent limitation for arsenic. The data used to establish the effluent limitations reflect multiple sources of variability, including sampling and analyticalEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 364 variability. Because of this, the effluent l imitations similarly reflect the sampling and analytical variability inherent in the data, as well as other sources of variability. See Appendix A, Essay Section 3.1.
EPA also does not agree that establishing the daily maximum effluent limitation for arsen ic equal to the quantitation limit would result in gasification plants not meeting the arsenic limitation. EPA has established similar effluent limitations in previous ELGs (see, e.g., BAT effluent limitations at 40 CFR 430.24 for the Pulp, Paper, and Pape rboard Point Source Category, where EPA established “<ML” daily maximum limitations for certain pollutants). EPA notes that although the commenter, who has ownership interest in a petroleum coke gasification plant (in fact, one of the plants for which EPA obtained data for establishing these effluent limitations), asserts that additional data are needed, they did not provide any such effluent data with their comments on the proposed rule. See Essay Section 2.5 and the response to DCN EPA

- HQ

- OW

2009

- 0819

- 449 9

- A1, Excerpt Number 15.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 121 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

A. Proposed Limits Are Not Supported By the Record
EPA proposes the following limits for FGD wastewater at existing power plants.

Pollutant Units of Measure Daily

Maximum Limit Monthly

Average Limit

Total Arsenic μg/L 8 6 Total Mercury ng/L 242 119 Total Selenium μg/L 16 10 Nitrate/Nitrite as N mg/L 0.17 0.13

As discussed below, an exceedance frequency analysis of these limits indicates that the limits cannot consistently be met even by Allen and Belews Creek, the two model plants.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4283

- A1, Excerpt Number 17.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 365 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 200 9

- 0819

- 4655 Comment Excerpt Number: 234 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s selection of datasets omitted years of relevant data from the model plants. EPA removed valid data po ints representing elevated concentrations that would be expected in the tails of the distributions. EPA substituted baseline values for reported measurements which had the effect of reducing estimated variability factors. EPA used inappropriate statistical methods for estimating underlying parameters of the Delta LogNormal distribution which resulted in underestimates of variability factors. For selenium and nitrate/nitrite, EPA abandoned the Delta LogNormal distribution and treated all reported values as i f they were above the detection limit causing variability factors to be biased low. As implemented, EPA’s series of procedures systematically reduced estimates of long term averages and variability factors, and consequently reduced calculated limits.

Comme nt Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 172.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 1 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
To calculate ELGs for FGD effluent, EPA implemented a series of procedures that included selection of datasets, removal of data points from the da tasets, substitution of data, and estimation of underlying parameters of the Delta LogNormal distribution. As implemented, EPA’s series of procedures systematically reduced estimates of long term averages and variability factors, and consequently reduced c alculated ELGs.
EPA’s selection of datasets omitted years of relevant data from the model facilities. EPA identified as outliers and removed valid data points representing elevated concentrations (that would be expected in the tails of the distributions). EPA substituted baseline values for reported measurements which had the effect of reducing estimated variability factors. EPA used inappropriate statistical methods for estimating underlying parameters of the Delta LogNormalEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 366 distribution which resulted in underestimates of variability factors. For selenium and nitrate

nitrite, EPA abandoned the Delta LogNormal distribution and treated all reported values as if they were above the detection limit causing variability factors to be biased low.
Comment Respons e:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 172.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 14 Extern al Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s selection of datasets omitted years of relevant data from the model facilities. EPA identified as outliers and removed valid data points representin g elevated concentrations (that would be expected in the tails of the distributions). EPA substituted baseline values for reported measurements which had the effect of reducing estimated variability factors. EPA used inappropriate statistical methods for estimating underlying parameters of the Delta LogNormal distribution which resulted in underestimates of variability factors. For selenium and nitrate

nitrite, EPA abandoned the Delta LogNormal distribution and treated all reported values as if they were above the detection limit causing variability factors to be biased low. The resulting magnitude of bias in EPA’s calculated ELGs for FGD effluent is so large that the proposed ELGs are invalid for their intended purpose.
Comment Response:
See the respo nse to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 172.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 367 31.a. Engr NL

– Selection of Facilities for FGD Wastewater

Commenter Name: Bruce W. Ramme Commenter Affiliation: We Energies Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1 Comment Excer pt Number: 8 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The proposed rule establishes BAT effluent limitations based on data collected at steam electric generating units operating the candida te technologies. We Energies is concerned, however, that effluent limitations derived for FGD wastewater cannot be met by all coal

- fueled facilities, even those facilities that have already installed chemical precipitation treatment systems. This is espe cially the case for plants burning subbituminous coal. EPA sampled discharges at We Energies Pleasant Prairie Power Plant, a site that burns subbituminous coal, but excluded the data because its chemical precipitation system consists of a two

- stage treatm ent system, which EPA considered to be more advanced than the one

- stage system it is using as the basis for the chemical precipitation technology option. Yet actual operating data reveal that Pleasant Prairie cannot consistently meet the proposed arsenic and mercury limitations associated with EPA’s proposed chemical precipitation technology option. Further, nothing in the rulemaking record demonstrates that facilities burning subbituminous coal can meet the proposed selenium and nitrate/nitrite limitatio ns. We encourage EPA to recalculate effluent limitations for FGD wastewater using a more robust set of data that represents the variability of FGD wastewater across the industry. We believe EPA needs to include data from at least one site (preferably

mor e) solely burning subbituminous coal in its effluent limitations derivation, and we are providing self

- monitoring data from Pleasant Prairie to use in this calculation.
Comment Response:

EPA used data from Pleasant Prairie to calculate effluent limitatio ns for arsenic and mercury for the final rule. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.
Also see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 53 (in Comment Code 9.a) regarding the inclusion of data from the Pleasa nt Prairie plant in the development of the final effluent limitations. EPA based the limits for arsenic and mercury on treatment system effluent data from four plants, with 183 observations for arsenic and 670 observations for mercury. These data represent approximately 41⁄2 years of operation for these plants. The selenium and nitrate

- nitrite limits are based on treatment system effluent data for two plants, with 398 observations for selenium and 70 observations for nitrate

- nitrite. These data represent

more than 5 years of data for one plant and more than 4 years of data for the other. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 124 in Comment Code 4.b regarding the representativeness of EPA’s FGD wastewater dataset. Also see the response to DCN EPA

HQ

- OW

- 2009

- 0819

- 5552

- A2, Excerpt Number 2. In addition, see the Statistical SupportEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 368 Document for Effluent Limitations (DCN SE05733) for the results of EPA’s engineering evaluation of the data used to calculate the effluent limitations for the fina l rule.
By including Pleasant Prairie in the dataset, the effluent limitations are based on data that include plants burning bituminous coal, subbituminous coal, and blends of bituminous and subbituminous coals. The record demonstrates that the chemical pr ecipitation plus biological treatment BAT basis is effective at removing the pollutants present in FGD wastewater regardless of the type of coal that is burned, and in particular those pollutants for which EPA is establishing effluent limitations. See, e.g ., the pollutant removal performance for arsenic and mercury. The data in the record also shows that the biological treatment technology is effective at removing nitrate

- nitrite and the different forms of selenium present in FGD wastewater; that is proven true for every type of coal that has been tested with the technology. There is nothing unique about the form of selenium or nitrate

- nitrite that is present in FGD wastewater at plants burning subbituminous (or any other type of coal), therefore there is no theoretical reason why the technology would not also be equally effective at treating the wastewater from such plants, nor does the commenter provide any reason why that would be so. EPA also considered whether there were other pollutants or wastewater ch aracteristics unique to subbituminous coal that would potentially interfere with operation of the biological treatment technology. EPA did not identify any such potential interferences and notes that the characteristics of wastewater from subbituminous pla nts (as evidenced by the data for Pleasant Prairie, as well as Hatfield’s Ferry burning a coal blend that includes subbituminous) are similar to the characteristics of wastewater from plants burning bituminous coal (i.e., Allen, Belews Creek, Miami Fort, K eystone). Also see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 in Comment Code 10.a.

Commenter Name: Bruce W. Ramme Commenter Affiliation: We Energies Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1 Comment Excerpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA should include data from plants exclusively burning subbituminous coal to develop technology

- based limits. EPA derived technology

- based limits f or arsenic and mercury using data from only three plants using chemical precipitation technology. Two of the plants burn Eastern Bituminous coal, while the third plant burns a blend of Eastern Bituminous and subbituminous coal. FGD wastewaters from sites solely burning subbituminous coal have different wastewater characteristics than sites burning Eastern Bituminous coal. Data from our Pleasant Prairie Power Plant, which burns subbituminous coal and operates a state

- of

- the

- art chemical precipitation FGD wastewater treatment system with organosulfide addition, demonstrates that plants burning subbituminous coal may not be able to consistently meet the proposed technology

- based limitations for arsenic or mercury. This is particularly importantEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 369 because the l imits derived for arsenic and mercury from the chemical precipitation technology option are carried over and used as the limits for chemical precipitation plus biological treatment. EPA should recalculate the proposed limitations including data from a pla nt solely burning subbituminous coal.
Comment Response:
EPA used data from Pleasant Prairie to calculate effluent limitations for arsenic and mercury for the final rule. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.

Commenter Name: Bruce W. Ramme Commenter Affiliation: We Energies Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1 Comment Excerpt Number: 39 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Chemical Precipitation BAT Evaluation Did Not Include Data from Plants Exclusively Burning Subbituminous Coals; Subsequently, EPA Should Recalculate BAT FGD Wastewater Limits to Account for Different Coal Types.
In the preamble, EPA described what sites were ch osen for the field sampling program (emphasis added):
EPA evaluated 10 FGD wastewater treatment systems. EPA selected these FGD systems because at the time it believed all were among the better performing FGD wastewater treatment systems in the industry, based on information obtained during the site visits and discussions with industry representatives about the design/operation of the treatment system and optimization efforts performed at the plant. In addition, these plants represent geographical variabil ity, different coal types (i.e., bituminous, subbituminous, coal blends) , and different operating practices (e.g., baseload vs. cycling). 78 Fed. Reg. at 34,444 col. 3.
Furthermore, the Technical Development Document (“2013 TDD”) described how EPA conside red the type of coal burned when selecting plants for sampling (emphasis added):
EPA considered the type of coal that the plant burns and selected plants burning different types of coal because the types and concentration of metals present in the FGD waste water could differ based on the fuel source

. Most of the plants sampled burn bituminous coal because the majority of plants with wet FGD systems burn bituminous coal; however, EPA also sampled wastewater at plants that burn subbituminous coal. 2013 TDD at 3

- 10.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 370 Yet, when EPA calculated the limits for FGD wastewater based on chemical precipitation as BAT under Regulatory Option 1, no steam electric generating units exclusively burning subbituminous coal were included in the evaluation. (EPA then transferred the BAT FGD wastewater effluent limitations for arsenic and mercury calculated for the chemical precipitation technology option to the biological treatment technology option. Therefore, the arsenic and mercury effluent limitations derived for Regulatory Option 1 are the same as the effluent limitations proposed for Regulatory Options 2, 3b, 3, 4a, and 4.) This is especially troublesome because 15

- 20 of the plants discharging FGD Wastewater burn subbituminous coal, and another 23

- 28 plants burn a blend of coals. Id. at 6

- 5, Table 6

- 2.
Data used to derive the chemical precipitation BAT effluent limitations were from Duke Energy’s Miami Fort Station (“Miami Fort”), RPI Energy’s Keystone Generating Station (“Keystone”), and Allegheny Energy’s Hatfield’s Ferr y Power Generating Station (“Hatfield’s Ferry”). 78 Fed. Reg. at 34,488 col. 1. Miami Fort and Keystone both burn Eastern Bituminous coal and Hatfield’s Ferry burns a blend of bituminous and subbituminous (Powder River Basin or “PRB”) coal. 2013 TDD at 3

- 11, Table 3

- 3.
EPA sampled one plant which solely burns subbituminous coal: We Energies Pleasant Prairie Power Plant. However, data from PPPP was not used to derive the chemical precipitation BAT effluent limitations. EPA described their rationale for not including PPPP data as follows (emphasis added):
Based on data EPA has evaluated for the steam electric industry and other industry sectors, two

stage chemical precipitation systems generally achieve better pollutant removals than one

- stage systems. S ince the technology basis for chemical precipitation treatment of FGD wastewater in the proposed rule is a one

- stage system and that is the configuration used to estimate compliance costs, EPA concluded that effluent data for the two

- stage system (Pleasant Prairie) should not be used when calculating effluent limits for the technology option. 78 Fed. Reg. at 34,487, fn. 62.
According to EPA’s justification, one could rationally derive that plants with two

- stage systems, such as Pleasant Prairie, should have no problem meeting the proposed arsenic and mercury effluent limitations. Yet, this is not the case for Pleasant Prairie Power Plant.
Pleasant Prairie’s dedicated wastewater treatment plant (“WWTP”) to treat FGD blowdown employs current state

- of

- the

- art technology for mercury removal: lime desaturation and primary clarification, addition of organosulfide, ferric chloride addition for iron co

- precipitation, and the addition of a polymer, followed by a parallel plate clarifier. The wastewater treatment pl ant currently removes over 99.9 percent of mercury. The WWTP also removes a portion of arsenic and selenium. (Removal efficiencies have been calculated at 95% and 78%, respectively.)
Pleasant Prairie has acquired an extensive database of mercury samples collected at the FGD WWTP effluent as required by Wisconsin Department of Natural Resources (“WDNR”), the permitting authority, to demonstrate compliance with a 1.5 ug/L (or 1500 ng/L) best professional judgment (“BPJ”) limit. The proposed monthly average limit of 119 ng/L is about 13 times lower than the BPJ limit. PPPP mercury sample results at the FGD WWTP Effluent (SamplingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 371 Point 102) are presented on a logarithmic scale on Figure 1 below. (Note, data greater than the method detection limit, but less than the quantification limit, are shown as half the quantification limit, consistent with the methodology EPA used to treat non

- detect and flagged data. 2013 TDD at 10

- 5. Fourteen samples meet this criterion. All of the substituted values are less tha n the laboratory measured values.) Data is also available in tabular format in Appendix I.
Reviewing the results of the 441 samples collected from November 2007

– July 2013, one fifth of the samples are below the proposed monthly average limit of 119 ng/L. One third of the samples are greater than the proposed monthly limit, but less than the proposed daily maximum limit of 242 ng/L. About half of the samples are greater than the proposed daily maximum limitation. The average concentration of all of the data is 334 ng/L.

We Energies collected samples from November 2007 through May 2010 to determine the mercury removal efficiency of the Pleasant Prairie FGD WWTS. A comparison of the total and dissolved mercury in the FGD WWTS influent (Reaction Tank #1 Influent) compared to the total mercury in the FGD WWTS effluent (Sampling Point 102) is presented on a logarithmic scale on Figure 2 below. While the “dissolved” mercury data accurately portrays the concentration of the samples passing through a 0.45 um filter, some or all of this mercury is believed to be present in very fine or colloidal particles that are not truly dissolved. The data demonstrates that Pleasant Prairie’s chemical precipitation wastewater treatment system achieves a 99.9% mercury remov al efficiency. Data is also available in tabular format in Appendix I.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 372 We Energies also collected samples to determine the mercury concentration at various stages of the PPPP FGD WWTS. A comparison of the total mercury concentration at the FGD WWTS infl uent (Reaction Tank #1 Influent), Primary Clarifier Effluent, Secondary Clarifier Effluent, and FGD WWTS effluent (Sampling Point 102) is presented on a logarithmic scale on Figure 3 below. The mercury concentration in the FGD wastewater is significantly reduced (by about 99.5%) after the first clarification stage. The organosulfide and ferric chloride additions occur after the primary clarifier. The mercury concentration in the FGD wastewater is further reduced (by about 85% of the primary clarifier ef fluent concentration) leading to an ultimate removal efficiency of 99.9% for the FGD WWTS. Data is also available in tabular format in Appendix I.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 373 Pleasant Prairie has also sampled its FGD WWTP effluent for arsenic. Sample results can be viewed in Figu re 4 below. (Note, non

- detect data and data greater than the method detection limit, but less than the quantification limit, are shown as half the quantification limit, consistent with the methodology EPA used to treat non

- detect and flagged data. 2013 T DD at 10

- 5. Five samples meet this criterion.) Data is also available in tabular format in Appendix I.
Only a quarter of the samples had arsenic concentrations less than the proposed monthly average limit of 6 ug/L. 13 A third of the samples had arsenic concentrations greater than the proposed monthly limit, but less than the proposed daily maximum limit of 8 ug/L. 14 The balance of the samples had arsenic concentrations greater than the proposed daily maximum limitation. The average arsenic concentratio n of all of the data is 7.8 ug/L.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 374 In 2008, We Energies collected samples at various points within its Pleasant Prairie FGD WWTS. A comparison of the arsenic concentrations in the FGD WWTS influent (reaction tank #1 influent), primary clarifier effluent, and secondary clarifier effluent is presented on a logarithmic scale on Figure 5 below. The data demonstrates that Pleasant Prairie’s chemical precipitation wastewater treatment system achieves a 95% arsenic removal efficiency and illustrates that the se cond stage of clarification accomplishes additional removal beyond the first stage. Arsenic is typically removed from water by iron addition and the ferric chloride addition at Pleasant Prairie occurs after the primary clarifier. Despite the iron addition and two stages of clarification, the effluent concentrations still appear to be higher than the concentrations of the single stage systems at the Eastern Bituminous coal fueled plants sampled by EPA. Data is also available in tabular format in Appendix I

.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 375 The only other site EPA sampled that burns a portion of subbituminous coal is Hatfield’s Ferry. At Hatfield’s Ferry, during the 4

- day EPA Sampling, coal blends ranged from 16% PRB and 84% Eastern Bituminous to 42% PRB and 58% Eastern Bituminous .15 The footnote in Table 3

- 10 (of the Sampling Episode Report) indicates that the 42% blend of PRB is very atypical for Hatfield’s Ferry as the normal fuel blends typically run around 20% PRB/80% Eastern Bituminous. Data obtained from sampling at Hatfield’s Ferry was used to derive the chemical precipitation BAT effluent limitations; however, the data collected shows that Hatfield’s Ferry cannot meet the proposed monthly arsenic and mercury limitations at all times. In fact, the Hatfield’s Ferry plant speci fic Long

- Term Average for Total Arsenic, as calculated by EPA, is 6.682 ug/L, and the plant

- specific monthly variability factor is 1.373. Two Total Mercury samples were higher than the proposed monthly mercury limitation.

As described in an attachment to UWAG’s comments, AKRF conducted a technical review of the statistical methods and data used by EPA to estimate limitations for FGD effluent. Their review indicated that self

- monitoring data from Hatfield’s Ferry (over 120 days) was not used by EPA to deri ve arsenic or mercury limitations for the chemical precipitation technology option. As AKRF described, “EPA provided no explanation of why it excluded the self

- monitoring data from Hatfield’s Ferry...from its final selection of data to use in its calculation of ELGs.” The Long

- Term Average for Total Arsenic, as calculated by AKRF (using a combined dataset of theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 376 EPA 4

- day sampling, CWA 308 Sampling, and self

- monitoring data), is 9.084 ug/L, the plant

specific daily variability factor is 2.095, and the month ly variability factor is 1.316. Based on the combined dataset, AKRF calculated that Hatfield’s Ferry exceeded the proposed Total Arsenic daily maximum limitation of 8 ug/L over half of the time (52%) and exceeded the proposed monthly average limit of 6 ug /L most of the time (96.4%). Evaluating Hatfield’s Ferry for Total Mercury, AKRF calculated the Long

- Term Average to be 117.575 ng/L, with a daily variability factor of 6.690 and a monthly variability factor of 2.344. Hatfield’s Ferry exceeded the propo sed Total Mercury daily maximum limitation of 242 ug/L a little over one tenth of the time (11.7%) and exceeded the proposed monthly average limit of 119 ug/L a little less than a third of the time (29.2%).

In both EPA and AKRF’s evaluations, Hatfield’s Fe rry’s Total Arsenic Long Term Average exceeds the proposed monthly average limitation. In fact, when considering Hatfield’s Ferry’s self

- monitoring data, the Total Arsenic Long

- Term Average exceeds the proposed daily maximum limitation most of the time. Hatfield’s Ferry, which burns a blend of Eastern Bituminous and PRB coals, cannot consistently meet the proposed Total Arsenic and Total Mercury limits derived by EPA.
While a majority of the plants with wet FGDs in the country burn bituminous coal, EPA sh ould consider and evaluate whether all of the coal plants with existing chemical precipitation systems can meet the proposed BAT effluent limitations for FGD effluent. According to EPA, out of the 117 plants discharging FGD wastewater, 15

- 20 plants burn s ubbituminous coal and 23

- 28 burn a blend of coals. 2013 TDD at 6

- 5, Table 6

- 2. Therefore, upwards of 48 plants (or 41% of the coal plants discharging FGD wastewater) may have difficulties meeting the proposed limits simply because they burn subbituminous coal. Nothing in the record demonstrates that plants burning PRB coal with existing chemical precipitation systems (including a more advanced two

stage clarification system at Pleasant Prairie) can comply with the limits for FGD wastewater that EPA is p roposing. In fact, the record demonstrates that the proposed mercury and arsenic limits cannot be consistently met by the only two sites EPA sampled that burn subbituminous coal.
EPA should include a dataset from at least one plant (preferably more) solel y burning subbituminous coal to derive the BAT effluent limitations for the chemical precipitation technology option (which were subsequently transferred as the effluent limitations for the biological treatment technology option). Without including data f rom a site which exclusively burns subbituminous coal, EPA is biasing the dataset used to calculate the BAT limitations because, as EPA correctly pointed out in the TDD, “the types and concentrations of metals present in the FGD wastewater could differ bas ed on the fuel source.” Id. at 3

- 10. Thus, We Energies urges EPA to recalculate the arsenic and mercury limitations derived for FGD wastewater using chemical precipitation as BAT (and subsequently transferred as the effluent limitations for the biological treatment technology option) by including a facility (or facilities) that exclusively burns subbituminous coal. The full Pleasant Prairie dataset has been provided to EPA in Appendix I and we encourage EPA to use this data in recalculating the BAT limita tions for FGD wastewater.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 377 13 Three of the eight samples below the proposed monthly average limitation were taken during the four

- day EPA sampling.

14 One of the eleven samples above the proposed monthly average limitation and below the proposed daily maxi mum limitation was taken during the four

- day EPA sampling. All four of the monthly CWA 308 samples were above the proposed monthly average limitation and below (or at) the proposed daily maximum limitation.

15 Sampling Episode Report, Allegheny Energy’s Ha tfield’s Ferry Power Station
, EPA

- HQ

- OW

2009

- 0819

- 0813, p. 3

- 22, Table 3

- 10.
Comment Response:
In response to comments, EPA used data from Pleasant Prairie to develop effluent limitations for arsenic and mercury for the final rule. See response to DCN EP A

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.
Regarding the representativeness of the FGD wastewater data used to characterize the effluent from the treatment technologies, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 20 in Comment Code 8.c and EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 107 in Comment Code 10.a and 124 in Comment Code 4.b. For the final rule, EPA updated its loadings analysis and development of the effluent limitations and standards to include available self

- monitoring dat a from Pleasant Prairie, Hatfield’s Ferry, Miami Fort, and Keystone. EPA also included additional self

- monitoring data from Allen and Belews Creek for its biological treatment evaluation. Based on the additional data, the effluent limitations were revised for the final rule. See DCN SE05733 for more information about the effluent limitations and the data used.
EPA notes that the commenter neglects to mention the chemical addition rate of organosulfide or ferric chloride that was added to the chemical preci pitation system at the plants that are mentioned. The chemical addition rate is a key parameter that plants can adjust to improve the performance of chemical precipitation systems. The injection point within the chemical precipitation system can also affe ct the degree of pollutant removal. A plant that needs to take steps to optimize pollutant removals may need to adjust the dosage for chemical additives, the pH of the wastewater within the reaction tanks, clarifier flows to reduce turbulence that would in terfere with settling, clarifier sludge wasting protocols, and a number of other factors.
EPA notes that the commenter is incorrect in stating that, for non

- detect data and data greater than the method detection limit, but less than the quantification li mit, EPA’s methodology for calculating effluent limitations substitutes those observations with one

- half the quantification limit. For all observations lower than the quantitation limit, EPA replaced the observation with the sample

- specific quantitation li mit (or the analyte

- specific baseline substitution value). See TDD Section 13 and DCN SE05733.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 378 EPA also notes that, although the dataset used to calculate the effluent limitations was supplemented since proposal in response to comments, certain data summar ized by the commenter were excluded from the dataset for reasons articulated in DCN SE05733.

Commenter Name: Bruce W. Ramme Commenter Affiliation: We Energies Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1 Comment Excerpt Number: 79 External Re view Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
When calculating the chemical precipitation BAT effluent limitations for FGD wastewater, EPA must include data from sites burning subbituminous coal.

 The types and concentrations of metals present in FGD wastewater varies dependent upon the fuel source.

 EPA’s arsenic and mercury effluent limitations calculations only include three plants

– two that burn bituminous coal and one that burns a blend of bituminous and subbituminous coal.

 Nothing in the rulemaking record demonstrates that plants burning subbituminous coal with existing chemical precipitation systems (including a more advanced two

- stage clarification system at Pleasant Prairie) can comply with the propos ed arsenic and mercury effluent limitations.

 Nothing in the rulemaking record demonstrates that plants burning subbituminous coal can achieve the proposed selenium and nitrate/nitrite effluent limitations.

 Upwards of 48 plants (or 41% of the coal plants di scharging FGD wastewater) may have difficulties meeting the proposed limits simply because they burn subbituminous coal.

 We Energies Pleasant Prairie data has been provided to EPA through these comments and we encourage EPA to use this data in recalculatin g the BAT effluent limitations for FGD wastewater.
Comment Response:
In response to comments, EPA used data from Pleasant Prairie to calculate effluent limitations for arsenic and mercury for the final rule. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.
Regarding the representativeness of the FGD wastewater data used to characterize the effluent from the treatment technologies, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 20 in Comment Cod e 8.c, DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 in Comment Code 10.a, EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 124 inEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 379 Comment Code 4.b, and EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1, Excerpt Number 8 in Comment Code 31.a.
Regarding whether the record demonstra tes that facilities burning subbituminous coal can meet the selenium and nitrate/nitrite

- N limitations, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 in Comment Code 10.a and EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1, Excerpt Number 8 in Comment Code 31.a.
Regarding the use of the Pleasant Prairie data provided in the comments, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4475

- A1, Excerpt Number 39.

Commenter Name: John W. Myers Commenter Affiliation: Tennessee Valley Authority (TVA) Document Control Nu mber: EPA

- HQ

- OW

- 2009

- 0819

- 4607

- A1 Comment Excerpt Number: 8 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

a. Proposed Biological Treatment

- Based FGD ELGs are Inappropriate and Their Compliance Reliability Unproven for the Industry
TVA believes the ELGs for FGD wastewaters being proposed have not been demonstrated by EPA to be achievable and therefore do not represent BAT for the coal

- fired industry as a whole. Each of the four preferred EPA FGD options in the proposal requires a combination of chemical precipitation and biological treatment. The proposed FGD ELG numerical limits for arsenic and mercury are calculated from three plants with chemical precipitation treatment systems (Hatfield’s Ferr y, Keystone, and Miami Fort). BAT limits for selenium and nitrate/nitrite are based on selected performance data of advanced wastewater treatment systems at two sites: Duke Energy’s Allen and Belews Creek facilities. TVA has several concerns with the devel opment and applicability of the proposed FGD BAT limits based on these few sites.
Comment Response:
EPA disagrees with the commenter that “the ELGs for FGD wastewaters being proposed have not been demonstrated by EPA to be achievable and therefore do not represent BAT for the coal

fired industry as a whole.” See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 in Comment Code 10.a.
Regarding the representativeness of the FGD wastewater data used to characterize the effluent from the treatment technologies, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 20 in Comment Code 8.c and EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 107 in Comment Code 10.a and 124 in Comment Code 4.b. EPA disagrees with theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 380 commenter that “[e]ach of the f our preferred EPA FGD options in the proposal requires a combination of chemical precipitation and biological treatment.” EPA notes that the regulations do not require facilities to implement the specific technologies that form the bases of the final limit ations and standards, but only that the appropriate facility effluent limitations and standards be achieved. There are a number of other treatment technologies and processes available to plants for meeting the effluent limitations. See the preamble for in formation on the extent to which plants that generate FGD wastewater will have processes or equipment in place to meet the effluent limitations by the time they will need to meet the final ELGs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 381 31.a.i. Engr NL Select Facs for FGD

– Chemical Precipitatio n Treatment

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 59 External Review Flag: No External Review External Review Incorporated i nto Response: No
Comment Excerpt:



### 5.8 It is unclear why EPA based its BAT determination only on sites that employ organosulfide addition, which is not typically used for arsenic removal. Data from Pleasant Prairie (a 2

- stage clarification system) and Dic kerson (an iron addition system) should also be included.

Arsenic is typically removed from water by iron addition; adding organosulfide does not remove significant amounts of iron. Therefore, data from sites using iron addition should be included in the BAT determination, even if organosulfide is not added. Data from 2

- stage clarification systems should also be included in the BAT determination. According to EPA, Pleasant Prairie data were not included because the facility has 2

- stage clarification. While Pleasant Prairie employs lime desaturation in the first stage and iron and organosulfide precipitation in the second stage, this approach should be comparable in performance to a one

- stage clarification system. Dickerson’s chemical precipitation system in cludes iron addition. Thus, data sets from both of these plants should be included in evaluating limits for arsenic. The EPA sampling data at Pleasant Prairie chemical precipitation effluent are generally below the daily limit of 8 μg/L but above the month ly average limit of 6 μg/L. Dickerson chemical precipitation effluent data are below the limit.



### 5.9 The Pleasant Prairie data should also be included in the evaluation of limits for mercury.

As discussed in Section 5.8, the Pleasant Prairie data were exclu ded because the plant employed a 2

- stage clarification treatment approach. However, this approach should have no impact on mercury capture and, if anything, may slightly improve mercury removal performance. Thus, these data should be included in the variou s evaluations of mercury, as well as arsenic, limits.
Comment Response:
EPA disagrees with the commenter that “[i]t is unclear why EPA based its BAT determination only on sites that employ organosulfide addition, which is not typically used for arsenic

r emoval.” It is clear in the record that EPA identified chemical precipitation including hydroxide and sulfide precipitation, as well as iron coprecipitation, as the basis for the chemical precipitation technology option for FGD wastewater treatment to opti mize removals of both arsenic and mercury. The organosulfide addition primarily targets the removal of mercury, but can also be helpful in removing other metals. Because Dickerson does not use organosulfide inEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 382 its FGD wastewater treatment system, it was no t identified as operating a treatment system consistent with the BAT basis and was, therefore, excluded from EPA’s analyses. EPA also notes that during the EPA sampling episode, the plant experienced an upset in the operation of its clarifier:
“In the afte rnoon of day 3 of the sampling episode, the clarifier sludge bed overturned. The condition was identified by turbidity measurements and wastewater treatment operators added polymer to counteract the situation. At 1630 on August 25, the wastewater treatment operator stated that turbidity levels were still elevated, although the polymer addition had reduced the turbidity. The operator said that SP

- 2 day 1 and 2 samples should be unaffected, but day 3 and 4 samples would be affected. The sampling team monitore d sample color and turbidity of the samples during the remainder of the sampling episode.” [DCN SE01308]
This type of upset in the FGD wastewater treatment system is not indicative of a well

- operated system. Therefore, in addition to the plant not adding organosulfide to optimize the removal of mercury and other metals, EPA also determined that the data collected from the FGD wastewater treatment system during the EPA sampling episode at the Dickerson plant is not representative of a BAT system because the system was not well operated at the time the samples were collected. Even if EPA were to determine that the data obtained by the CWA 308 sampling were sufficient, it still would not represent the BAT level of control for arsenic and mercury in FGD wastewa ter because Dickerson was not adding organosulfide and therefore was not operating one of the key components of the BAT basis.
In response to this and other comments about the plants included in the dataset used to develop the effluent limitations, EPA rea ssessed the characteristics of plants for which it had sampling data to characterize chemical precipitation treatment of FGD wastewater over a period of time, in order to determine whether any additional data should be used in the limitations development. As it did for the proposed rule, for the final rule, EPA rejected using data collected during the detailed study because these data represent time periods that were too short to adequately characterize treatment system performance (either one or two days o nly) and because the data were later found to be subject to analytical interferences. In addition, as it did for the proposed rule, for the final rule, EPA determined that data from Dickerson are not consistent with the BAT level of control, for the reason s described above in this response. Similarly, as it did for the proposed rule, for the final rule, EPA determined that the Allen and Belews Creek data for arsenic and mercury at the bioreactor influent are not consistent with the BAT level of control beca use the plants were not adding organosulfide, a critical component of the BAT basis to optimize removals of mercury and other metals.
For the final rule, EPA also determined that it would be appropriate to use data from Pleasant Prairie in the dataset as r epresenting performance of the chemical precipitation portion of the BAT basis, and to establish the arsenic and mercury effluent limitations in the final rule. Although Pleasant Prairie operates a two

- stage chemical precipitation treatment system, with

ea ch stage including clarification, EPA determined that the Pleasant Prairie treatment system was in large measure operated in a manner consistent with the one

- stage chemical precipitation treatment systems operated at Keystone, Miami Fort, and Hatfield’s Fe rry. EPA concluded that it is the fact of addition of certain components of the chemical precipitation system that makes itEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 383 consistent with the BAT basis, not how many stages a plant breaks its chemical addition into. In other words, it does not matter how many steps a plant uses to achieve chemical precipitation, so long as it makes use of the components that EPA has identified as part of the BAT basis, it can achieve the final limitations.
In the chemical precipitation system, plants add lime (calcium hyd roxide), ferric (or ferrous) chloride, and/or organosulfide to precipitate some metals. EPA’s BAT basis of chemical precipitation plus biological treatment includes all three of these chemical additions. Lime is added to elevate the pH of the wastewater to a designated set point, helping precipitate metals into insoluble metal hydroxides that can be removed by settling and filtration. Ferric (or ferrous) chloride is used to coprecipitate additional metals and organic matter. The ferric chloride also act s as a coagulant, forming a dense floc that enhances settling of the precipitated metals in the downstream clarification step. Sulfide precipitation improves the removal of some metals, such as mercury, by creating metal sulfide compounds that are less so luble than metal hydroxide compounds. Chemical precipitation can be designed to add all three chemicals to the same reaction tank or to add each chemical in separate tanks.
Thus, although a two

- stage chemical precipitation treatment system can provide the operator with additional flexibility and capability to more precisely target differing pH setpoints, as well as the sequencing of adding other treatment chemicals, a two

- stage system can also be operated such that it is generally equivalent to a one

- stage treatment system. The same would be true of the degree of suspended solids removal accomplished by the two clarifiers in the two

- stage treatment system, whereby the effluent TSS concentrations for a one

- stage and two

- stage system would be comparable depend ing on how the treatment system is operated.
Although EPA received comments suggesting certain plants, including Pleasant Prairie, should be included in the BAT limitations development dataset, EPA did not receive any comments during the 106

- day public com ment period suggesting that certain plants operate treatment systems that are not consistent with the chemical precipitation technology basis described and costed for treatment of FGD wastewater, and thus should not be included in the final limitations dev elopment. In light of comments stating that Pleasant Prairie should be included in the BAT limitations development dataset even though it operates two

- stage precipitation, including a second stage of clarification, EPA looked closely at the model BAT plant s (for the chemical precipitation portion of the BAT basis), as well as other BAT

- candidate plants for which EPA collected samples, to determine if their treatment systems included additional equipment or treatment steps that were not specified at proposal as part of the chemical precipitation technology basis.
During EPA’s evaluation of the model BAT plants, it became apparent that Keystone, one of the model BAT plants, may be viewed by some as having more advanced technology than specified by EPA as the c hemical precipitation technology basis for treatment of FGD wastewater. However, a close review of the Keystone treatment system design and the data for the model BAT plants show that the Keystone technology is not “beyond BAT.” In essence, the additional equipment at Keystone is a “distinction without a difference,” as is the case for the additional equipment and treatment stage at Pleasant Prairie.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 384 As EPA noted above for Pleasant Prairie, the effluent TSS concentrations for a one

- stage and two

- stage trea tment system may be comparable depending on how the treatment system is operated. As described below, EPA determined that the additional equipment included in the Keystone treatment system is operated in such a manner that the effluent concentration of TSS (and as a result, arsenic, mercury and other pollutants) at the plant is comparable to the removal of TSS (and arsenic, mercury and other pollutants) at the other model BAT plants.
The treatment system at Keystone includes polishing filters (“sock filters ”), in addition to sand filters, to remove TSS following one

- stage chemical precipitation and a single clarifier. Both the polishing filters and sand filters are designed to remove suspended solids from the FGD wastewater. As EPA noted in the Sampling Epis ode Report for Keystone:

“ The FGD wastewater treatment system was originally designed such that the plant could bypass the polishing filters if the TSS level after the sand filters met the plant’s permit limit. However, Keystone has found that using the p olishing filters full time is necessary to keep the TSS concentration below their permit limit, which is 10 mg/L (monthly average) and 20 mg/L (daily maximum).“ 1 See DCN EPA

- HQ

- OW

- 2009

- 0819

- 0808.
During its reassessment of the characteristics for the model BAT plants, EPA carefully reviewed the information in the record for the treatment system at Keystone, and in particular the use of polishing filters, to evaluate whether it represents a level of treatment beyond that included in EPA’s BAT basis. Based on the information in the record, EPA determined that the design performance capability of the polishing filter at Keystone is equivalent to the design performance capability of the sand filters at the other model BAT plants. A technical report prepared by t he Electric Power Research Institute (EPRI) explains the capability of sand filtration as applied to FGD wastewater:
Filtration is used to remove TSS and heavy metals in particulate form. Filtration will typically not be used in process wastewater applicat ions unless metals limits cannot be met with chemical precipitation and clarification. Sand filters can typically reduce FGD wastewater TSS to below 10 ppm and remove solids that are 5 micrometers or larger

. Membrane technologies, such as microfiltration, ultrafiltration, nanofiltration, or reverse osmosis could be used to remove smaller solids particles from process wastewater. However, these technologies have not been commercially applied to FGD wastewater and there are concerns with potential membrane

sc aling. [Emphasis added]
Flue Gas Desulphurization (FGD) Wastewater Chemical Precipitation Bench

- Scale Treatability Study . EPRI, Palo Alto, CA, 2015. EPRI Report Number 3002004893.
The EPRI characterization of filtration capabilities (in terms of particle s ize) is generally consistent with the figure below, showing that particle filtration (e.g., sand filters) will remove

1 The ELGs at 40 CFR 423 include BPT effluent limitations applicable to FGD wastewater, with the limitations set at 30 mg/L monthly average and 100 mg/L daily maximum. Keystone’s NPDES permit limits for TSS (10 mg/L monthly average; 20 mg/L daily maximum) a re more stringent than the ELG effluent limitations. As noted in EPA’s notes for a February 1, 2010 site visit, “The permit authority lowered Keystone’s limit on TSS in exchange for allowing the plant to discharge a higher concentration of selenium.” See D CN EPA

- HQ

- OW

- 2009

- 0819

- 1839.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 385 particles as small as approximately one micron, and that microfiltration technology is used to remove particles smaller than 2 micron and can remove particles as small as 0.04 micron. (The figure below is from the Good Water Company website, http://goodwatercompany.com/Products/Green_Options/. It was included in a section on well water treatment for drinking water. The filtration principles, however, are the same for wastewater treatment systems.)

EPA’s notes from a February 1, 2010, site visit to Keystone include a diagram for the treatment system showing that the polishing filters were designed to have a filter pore size of 3 micron (At tachment 5 to DCN EPA

- HQ

- OW

- 2009

- 0819

- 1839). As part of EPA’s reassessment of the model BAT plants, EPA contacted Keystone staff and confirmed that the pore size of the sock filters actually being used at Keystone is 10 micron (see 8/25/2015 email document ing phone call confirming 10 micron rating for filters; DCN SE06290). This information demonstrates that the polishing filters at Keystone do not meet EPRI’s definition of microfiltration, ultrafiltration, nanofiltration, or reverse osmosis, nor the simila r definitions used by the equipment vendor cited above.
EPA also reviewed the TSS effluent data collected during EPA

- collected sampling and CWA 308 sampling at the four model BAT plants and found that the plants all demonstrate TSS removal consistent with particle filtration, such as sand filtration and comparable techniques.

TSS (mg/L)

EPA

- collected sampling Summary Results for CWA 308 samplingEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 386 Keystone 13.4 <4, <4, <4, <4 Hatfield’s Ferry <2.5 4.4, <4, <4, <4 Miami Fort 14.1 8.4, 4.8, 8.8, 8.8 Pleasant Prairie <4.0 <4, <4, <4, <4 MDL = 1.1 mg/L QL = 4 mg/L
Detailed TSS results for CWA 308 sampling
Keystone 3.2 J 2 J ND 3.2 J Hatfield’s Ferry 4.4 2.8 J 2.8 J 1.6 J Miami Fort 8.4 4.8 8.8 8.8 Pleasant Prairie 2.8 J 2 J ND 1.2 J ND: Reported result is less than the MDL of 1.1 mg/L J: Reported result is above the MDL, but below the QL of 4 mg/L
Based on the information in the record regarding the treatment system design, theoretical filtration capability, and the TSS concentrations ac hieved by the model BAT plants, as shown by the sampling data, EPA concluded that the combination of the clarification, sand filter and polishing filter at Keystone results in a treatment level that is comparable to the level of treatment achieved by the c larification and sand filtration at the other model BAT plants of Miami Fort, Hatfield’s Ferry, and Pleasant Prairie. And, as noted above, EPA determined that the Pleasant Prairie treatment system is in large measure operated in a manner consistent with th e
one

- stage chemical precipitation treatment systems operated at Keystone, Miami Fort, and Hatfield’s Ferry. Therefore, EPA determined that the data from all four plants are consistent with the BAT level of control for arsenic and mercury in FGD wastewater discharges, and thus EPA used data from all four plants in developing the final arsenic and mercury limits.
EPA determined that the level of TSS removal (i.e., filtration) at Keystone is comparable to the other BAT plants, and thus there should be no need for the other model BAT plants or any other plants to install similar polishing filters to treat their FGD wastewater. Keystone uses the polishing filters to ensure compliance with their NPDES permit limits for TSS, which are more stringent than the previ ously established BPT limitations on TSS in the ELGs. See 40 CFR 423.12. However, although use of these polishing filters provides Keystone with added assurance that the effluent will not exceed its NPDES limits, the sampling data for the four model BAT pl ants show that they all achieve comparable TSS removal. Therefore, EPA has no reason to conclude that other plants would also need to employ polishing filters in addition to clarification and sand filtration to achieve the TSS removals that Keystone achiev es. In other words, the use of polishing filters at Keystone does not result in treated effluent that is markedly different than the levels that the other model BAT plants achieve with their particular combination of solid

liquid separation technologies. In fact, the data from the other model plants demonstrate that, in some cases, they are achieving lower or equivalent TSS effluent values than Keystone.
EPA nonetheless estimated what it would cost plants to install and operate polishing filters similar t o those used at Keystone. EPA contacted a filtration system vendor and obtained cost information for the filtration units and associated equipment, as well as replacement filterEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 387 cartridges. EPA used these data to estimate total installed cost and annual op erating costs for the polishing filters. EPA evaluated these costs for both 10 micron and 1 micron filters and found the costs would be the same (see DCN SE06334 for more information about the cost for polishing filters). EPA’s analysis demonstrates that t he additional cost to install and operate polishing filters similar to Keystone’s would be negligible. When compared to the industry

- level costs for the BAT technology (i.e., treating FGD wastewater with chemical precipitation plus biological treatment), p olishing filter costs represent 0.1% of total capital costs and 0.6% of annual O&M costs. EPA notes that the Clean Water Act does not require EPA to make a precise calculation of costs. See, e.g., CMA v. EPA , 870 F.2d 177, 237

- 38 (5th Cir. 1989) (“The Act requires the EPA to ‘take into account’ the costs of BAT; it does not require a precise calculation. The EPA ‘need make only a reasonable cost estimate in setting BAT’; it is sufficient if the EPA develops ‘a rough idea of the costs the industry would inc ur’” (citation omitted).); Kennecott Copper v. EPA, 612 F.2d 1232, 1238 (10th Cir. 1979) (EPA has “wide leeway in its analysis of costs”); BP Exploration & Oil Inc. v. EPA , 66 F.3d 784, 799

- 800 (6th Cir. 1995) (“The CWA does not require a precise calculati on of BAT and NSPS costs” (citation omitted).); NRDC v. EPA , 863 F.2d 1420, 1426 (9th Cir. 1988) (“[T]he Act does not require a precise calculation of BAT costs.”); W eyerhaeuser v. Costle , 590 F.2d 1011, 1045 (D.C. Cir. 1978) (“[Congress] left EPA with dis cretion to decide how to account for the consideration factors, and how much weight to give each factor.”); BASF Wyandotte Corp. v. Costle , 598 F.2d 637, 662 (1st Cir. 1979).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation : UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 82 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Although it had data from seven plants with chemical precipita tion systems, EPA chose only three to characterize chemical precipitation treatment levels: Miami Fort, Keystone, and Hatfield’s Ferry. See 2013 TDD at 10

- 9 to 10

- 10, Table 10

- 4 at 10

- 10. The three plants that EPA selected have the highest pollutant loa dings of the plants sampled by EPA. Therefore, they have the highest annual TWPE removals. EPA should have sampled more plants to calculate more representative pollutant reductions.
EPA did not use Belews Creek’s and Allen’s chemical precipitation efflue nt because those plants do not use organosulfide in their chemical precipitation systems. But for all parameters except mercury, Belews Creek and Allen chemical precipitation effluent is likely an accurate representation of treatment levels for chemical p recipitation. EPA excluded data from Dickerson Generating Station because it “was not adding organosulfide chemicals to the wastewater treatment system at the time of sampling. The plant also experienced frequent shutdowns, wastewater treatment upsets, a nd the treatment system is not designed to remove selenium.” 2013 TDD at 10

- 6. 32Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 388 EPA excluded Pleasant Prairie because of its two

- stage treatment system, which EPA noted “is more advanced than the one

- stage chemical precipitation system used as the bases [sic] for the chemical precipitation technology option.” Id

. Based on EPA’s justification, one could conclude that plants with two

- stage systems, such as Pleasant Prairie, should have no problem meeting the proposed arsenic and mercury effluent limitatio ns. Yet this is not the case for Pleasant Prairie. Including Pleasant Prairie in EPA’s dataset would have produced less stringent proposed limits even though it has a two

- stage system. UWAG believes EPA should have used the Pleasant Prairie data when de veloping the proposed effluent limits for chemical precipitation systems.

32 EPA’s decision not to use Dickerson’s data is not justified by its status as a peaking plant. That Dickerson is a peaking plant with “frequent shutdowns” is not a reason to exc lude its data; to the contrary, it is a good reason for including its data so that the operations of peaking units are reflected in the data.
Comment Response:
Regarding the plants with the “highest pollutant loadings,” see response to DCN EPA

- HQ

- OW

2009

- 0819

- 4470

- A1, Excerpt Number 3.
Regarding the representativeness of the FGD wastewater data used to characterize the effluent from the treatment technologies, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A2, Excerpt Number 20 in Comment Code 8.c and EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 107 in Comment Code 10.a and 124 in Comment Code 4.b.
EPA disagrees with the comment that “for all parameters except mercury, Belews Creek and Allen chemical precipitation effluent is likely an accurate re presentation of treatment levels for chemical precipitation.” EPA notes that sulfide precipitation is capable of achieving removals for more than just mercury and, as such, EPA expects that some pollutants would show greater removals in a sulfide precipita tion system compared to a system without sulfide precipitation. Therefore, the Allen and Belews Creek data were excluded because they do not operate their chemical precipitation system consistent with the BAT level of control. Regarding the exclusion of th e Dickerson plant, as well as Allen and Belews Creek, from the dataset of plants that EPA used to calculate effluent limitations for arsenic and mercury, see response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.
Regarding the inclusion of data fr om Pleasant Prairie in the development of the effluent limitations and standards, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59 and DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 53 (in Comment Code 9.a).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 389 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 3 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Although EPA collected data from Pleasant Prairie and Dickerson facilities, it did not include data from those facilities in its ELG calculations. EPA did not explain why it excluded data from Pleasant Prairie or Dickerson from its ELG calculations.

Commen t Response:
EPA used data from Pleasant Prairie to calculate effluent limitations for arsenic and mercury for the final rule. Data for Dickerson were not used to calculate effluent limitations for the ELGs because the plant does not operate its treatment system consistent with the BAT level of control. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 465 5

- A18 Comment Excerpt Number: 18 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA provided no explanation of why it excluded the self

- monitoring data from Hatfield’s Ferry and Miami Fort from i ts final selection of data to use in its calculation of ELGs.
Comment Response:
For the final rule, in response to public comments, EPA updated its loadings analysis and development of the effluent limitations and standards to include available self

- moni toring data from Hatfield’s Ferry and Miami Fort. EPA also included additional self

- monitoring data from Keystone, Pleasant Prairie, Allen, and Belews Creek. See the Statistical Support Document for Effluent Limitations (DCN SE05733).

Commenter Name: E lizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAGEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 390 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 27 External Review Flag: Statistics External Review Incorporated into Response: No
Comment Excerpt:

EPA i dentified Pleasant Prairie as having a treatment system that would have better pollutant removals than facilities with the BAT treatment system:
“Based on data EPA has evaluated for the steam electric industry and other industry sectors, two

stage chemical precipitation systems generally achieve better pollutant removals than one

- stage systems. Since the technology basis for chemical precipitation treatment of FGD wastewater in the proposed rule is a one

- stage system and that is the configuration used to es timate compliance costs, EPA concluded that effluent data for the two

- stage system (Pleasant Prairie) should not be used when calculating effluent limits for the technology option.” (page 13

- 4, EPA 2013)
Therefore, results of this assessment, including Ple asant Prairie, should be conservative (i.e., have lower frequencies of exceedance than expected).
Comment Response:
EPA used data from Pleasant Prairie to calculate effluent limitations for arsenic and mercury for the final rule. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59. See the Statistical Support Document for Effluent Limitations (DCN SE05733) for the results of EPA’s engineering evaluation of the data used to calculate the effluent limitations for the final rule.

Commenter N ame: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 89 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA’ s effluent limits based on chemical precipitation also do not reflect even the best

performing precipitation systems. EPA chose to base its limits on a one

- stage system, rather than a two

- stage precipitation system, despite acknowledging that “two

- stage chemical precipitation systems generally achieve better pollutant removals than one

- stage systems.” 346 The two

- stage system allows the pH and other conditions to be optimized for each precipitation step. 347 The Wisconsin Energy Pleasant Prairie plant uses a two

- stage system, and EPA collected effluent data from that plant as part of this rulemaking. 348 Because the BAT limits for arsenicEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 391 and mercury based on chemical precipitation are transferred to the chemical precipitation plus biological treatment option, EPA’s decision not to use the most effective precipitation systems as the basis for these BAT limits is means that the mercury and arsenic limits for the combined chemical and biological treatment option are also much weaker than they should be. EP A must base the mercury and arsenic limits for options involving chemical precipitation on the performance of two

- stage chemical precipitation.

346 78 Fed. Reg. at 34,487 n.62.

347 TDD at 7

- 5 to 7

- 6.

348 78 Fed. Reg. at 34,487 n.62.
Comment Response:
EPA used data from Pleasant Prairie to calculate effluent limitations for arsenic and mercury for the final rule. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 59. Therefore, a two

- stage chemical precipitation system is reflected in its a nalyses.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 392 31.a.ii. Engr NL Select Facs for FGD

– Chemical Precipitation followed by Biological Treatment

Commenter Name: John W. Myers Commenter Affiliation: Tennessee Valley Authority (TVA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4607

- A1 Comment Excerpt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

3. The sampling and analysis program employed by EPA to characterize pollutant removals was inadequate to conduct an appropriate and defensible analysis of wastewater treatment performance and variability over time. As detailed in comments submitted by the Utility Water Act Group (UWAG), the limited number of samples evaluated, the failure to collect representative intake composite samples, an inappropriate selection of sampling locations, and neglecting the need for paired influent and effluent samples are of significant concern. As noted by UWAG the projected exceedance rates based on the limited operational history for the propo sed model plants average greater than 20% for the proposed daily maximum limits and greater than 40% for the proposed monthly average limits.
Comment Response:
EPA does not agree that the data used to characterize pollutant reductions was inadequate to

a ssess performance and variability over time. The effluent limitations are not based on a “limited number of samples.” EPA based the limits for arsenic and mercury on treatment system effluent data for four plants, with 183 observations for arsenic and 670 observations for mercury. These data represent approximately 41⁄2 years of operation for these plants. The selenium and nitrate

nitrite limits are based on treatment system effluent data for two plants, with 398 observations for selenium and 70 observations for nitrate

- nitrite. These data represent more than 5 years of data for one plant and more than 4 years of data for the other. See response to DCN EPA

- HQ

OW

- 2009

- 0819

- 4655, Excerpt Number 124 in Comment Code 4.b regarding the representativeness of EPA’s FG D wastewater dataset. Also see the response to DCN EPA

- HQ

OW

- 2009

- 0819

- 5552

- A2, Excerpt Number 2.
Regarding the comment about “failure to collect representative intake composite samples,” during the detailed study of the steam electric industry, EPA determ ined that it was unnecessary to collect intake water samples for the FGD wastewater analyses because the concentrations of the pollutants present in the untreated FGD wastewater are at such high levels that it was obvious that the pollutants are generated as part of the FGD process and are not due to intake water contributions. Neither this commenter, nor any other commenter, provided data to EPA to demonstrate that the pollutant concentrations present in the untreated FGD wastewater are due to intake water contributions. Additionally, EPA notes that the commenter (or UWAG on behalf of the commenter) collected intake samples during the detailed study sampling episode at TVA’s Widows Creek plant; however, those intake sample results have never been shared wit h EPA.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 393 The pollutant concentrations in the influent are sufficiently high, relative to the effluent concentrations, to demonstrate that pollutants in FGD wastewater are effectively removed by the BAT treatment technology. The influent pollutant concentrati ons in the untreated wastewater are variable, yet consistently remain substantially above the effluent concentrations. The data are sufficiently representative of influent and effluent concentrations that comparing the mean effluent concentrations to the m ean influent concentrations provides a reasonable estimate of pollutant reductions. In addition, the effluent limitations are based on statistical analysis of the effluent data (see the TDD Appendix B) and are not based on percent removal across the treatm ent system. For these reasons, it is not necessary to collect paired influent and effluent samples.
Regarding the EPA’s engineering review of the data and the effluent limitations, see DCN SE05733.

Commenter Name: Thomas Cmar Commenter Affiliation: Ear thjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 83 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

4. EPA’s proposed effluent limits for the biological treatment BAT option can be reliably achieved across the industry
EPA gathered extensive monitoring data about the performance of the systems at two plants: Belews Creek and Allen, because these were the two plants that had been operating at le ast six months and achieved steady state, according to their operators. Based on these data, EPA has proposed limits for arsenic, mercury, selenium, and nitrates/nitrites. EPA’s limits for mercury and arsenic are based on the performance of a chemical pr ecipitation system employing both hydroxide and polysulfide treatment, while the selenium and nitrate/nitrite limits are based on the biological treatment system.
All of these effluent limits proposed by EPA are supported by the record. In fact, the recor d would support setting mercury and arsenic limits even lower based on the additional reductions that occur in the biological treatment system.
On behalf of the Sierra Club, Dr. David Jenkins reviewed the data used by EPA to set these proposed standards. Dr. Jenkins was also able to obtain influent and effluent data for selenium and mercury for a third plant operating the ABMet system, which the vendor identified simply as the “NE USA” plant. According to the vendor, the plant uses both hydroxide and polysulfide chemical precipitation prior to the biological treatment system, which means that this systemEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 394 represents more completely the treatment t echnology proposed as BAT than the Allen and Belews plants.

We believe that the data obtained from the vendor is for the American Electric Power Mountaineer plant in West Virginia. The vendor identifies that plant as a single

- boiler 1300 MW facility, and the system became operational in late 2011. 325 Both of these relatively unique facts match the Mountaineer plant in the record. 326 Another critical fact is that the vendor reports that the ABMet system handles combustion waste landfill leachate, which is true of the Mountaineer system as well. 327 This fact is highly relevant for EPA’s BAT determination regarding leachate, as is discussed in detail further below.
As discussed in the report of Dr. David Jenkins, Appendix C, the effluent data from Belews and Allen plants, as well as those from a third plant, show that the ABMet system can reliably meet the selenium and mercury limits set by EPA, and that the ABMet system can achieve mercury reductions even greater than those achieved by the two

- stage chemical precipitation system.

325 Jay Harwood, Making the Change: Meeting EPA Effluent Limitation Guidelines, May 23, 2013, at slides 23

- 24.

326 See Email to TJ Finseth from AEP, Docket No. EPA

- HQ

- OW

- 2009

- 0819

- 0577, stating that the ABMet system at Mountaineer started up on Nov. 11, 2011, and achieved steady state on February 11, 2012.

327 See HDR, Inc., Biological Treatment for Power Generation, June 11, 2013, at Slide 16; see also ERG Memo, Status of Biological Treatment Systems to Remove Selenium (April 19, 2013), EPA

- HQ

- OW

- 2009

- 0819

- 2127.
Comment Response:
EPA agrees with the commenter that the “ effluent limits for the biological treatment BAT option can be reliably achieved across the industry.” See responses to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4702

- A7, Excerpt Nu mber 5 in Comment Code 10.a and DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 also in Comment Code 10.a. Also see DCN 05733.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A 1 Comment Excerpt Number: 85 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 395 c. The biological treatment option can meet EPA’s proposed effluent limits across a range of operating conditio ns.
Industry has expressed concerns that EPA has based its limits for the biological treatment option only on plants burning eastern bituminous coal, and that these results may not be achievable at plants burning other types of coal. This concern overlook s is that wet FGD systems are most likely to be used at plants burning bituminous coal. According to EPA and EIA data, over 70% of the nation’s wet

- scrubbed generating capacity is at plants that burn bituminous coal. 337 This is because bituminous coal ha s high sulfur levels, and therefore requires the greater sulfur dioxide removal rates of a wet scrubber, as compared to a dry scrubber. Plants burning sub

- bituminous coals are more likely to control SO 2 using a dry scrubber or dry sorbent injection, if an y SO 2 emission controls are needed at all. 338

337 See EPA 2009 Final Detailed Study Report, EPA

- HQ

- OW

- 2009

- 0819

- 0387, at Table 4

- 2. To the extent that plants switch to PRB coal, they would be able to use dry scrubbers and eliminate the FGD wastewater st ream entirely.

338 Lindsay Morris, The Ins and Outs of SO2 Control, Power Engineering, June 1, 2012, available at http://www.power

- eng. com/articles/print/volume

- 116/issue

- 6/features/the

- ins

- and

outs

- of

- so2

- control.html.
Comment Response:
EPA agrees with the commenter that “wet FGD systems are most likely to be used at plants burning bituminous coal [sic] because bituminous coal has high sulfur levels.” Additionally, EPA has determined that its dataset used to characterize the effluent from the treatment technologies is representative of the industry as a whole. See response to DCN EPA

- HQ

- OW

2009

- 0819

- 4655

- A2, Excerpt Number 20 and EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Numbers 107 in Comment Code 10.a and 124 in Comment Code 4.b. Also see DCN SE05846 ( Variability in Flue Gas Desulfurization Wastewater: Monitoring and Response ).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 396 31.a.iii. Engr NL Select Facs for FGD

– Chemical Precipitation f ollowed by Vapor

Compression Evaporation Treatment

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 68 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Other than having a much more advanced wastewater treatment system, the Brindisi plant is similar to many coal plants in the United States. The plant was built in 1993 and has four units that are sc rubbed by a limestone forced oxidation system. 262 The plant burns a blend of low sulfur and bituminous coal, has SCR installed for NOx control on all four units, a fabric filter on Unit 3, and ESPs on the other units. 263 Therefore, the record supports EP A’s conclusion that these limits could be achieved by plants in the United States operating a similar system, comprising pre

- treatment, vapor compression, and crystallization.

262 Id. At 3

- 13, 13

- 5; ENEL Site Visit Notes, EPA

- HQ

- OW

- 2009

- 0819

- 1795.

263 E PA

- HQ

- OW

- 2009

- 0819

- 1791, at 2

- 1.
Comment Response:
EPA agrees with the commenter that the “Brindisi plant is similar to many coal plants in the United States.” As the commenter describes, the operations at the Brindisi plant are generally comparable to t he types of operations at most coal

- fired plants in the United States. Additionally, EPA determined that the concentrations of untreated FGD wastewater at the Brindisi plant are within the range of the untreated FGD wastewater concentrations for the plant s in the United States.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 397 31.b. Engr NL

– Selection of Facilities for Gasification Wastewater

Commenter Name: Paul Carpmone Commenter Affiliation: Tampa Electric Company (TEC) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4520

- A2 Comment Excerpt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Insufficient Data Available for Gasification Wastewater Rulemaking
Polk PS is one of three coal gasification power plants currently operating in the US, and one of only two operating during the sampling period associated with this proposed rulemaking. Even though these plants employ the same basic process, there are differences in operation just as there are variations within traditional coal burn ing power plants. At a minimum, these plants differ according to coal type and in the byproducts which result from the gasification process.
In 2007, EPA visited Polk PS for the purpose of obtaining samples of wastewater associated with the gasification p rocess. The sampling protocol included sampling throughout the process water recycle system and was conducted over four days in the fall. Similarly, the Wabash Valley plant was visited for a four

- day sampling event. The third plant, Edwardsport IGCC, was not yet operational. In essence, EPA has used the data obtained from two power plants over a mere total of eight days to establish a federal effluent limitation guideline.
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 1 67 in Comment Code 23.
EPA notes that the commenter operates the Polk Power Station and the gasification process at that plant (in fact, as the commenter noted, one of the plants for which EPA obtained data for establishing these effluent limitations). Th us, it is particularly noteworthy that, although the commenter asserts that insufficient data were available for gasification wastewater, they did not provide any such effluent data with their comments on the proposed rule. In its proposed rule, EPA clearl y identified the data that it had collected and used to calculate the proposed limitations. EPA solicited comment on the proposed rule, providing stakeholders with the opportunity to submit additional data if they chose to do so. In some cases, such as for the chemical precipitation and biological treatment technologies for FGD wastewater, commenters submitted large amounts of data representing years of treatment system operation. EPA evaluated these effluent data and, as appropriate, used these data in est ablishing the effluent limitations for the final rule. However, in other cases, such as for gasification wastewater and for the vapor

- compression evaporation technology for FGD wastewater, EPA received no additional data. Thus, in establishing the ELGs, EP A has used all of the appropriate data available. HadEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 398 industry or other stakeholders come forward and provided EPA with more data, EPA likely would have used it, if it were valid and representative of the BAT basis, as appropriate.
See Appendix A, Essay Se ction 3.2.1.1.

Commenter Name: S. Dear Schramm

- Satayathum Commenter Affiliation: Wabash Valley Power Association, Inc. (WVPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4534

- A2 Comment Excerpt Number: 4 External Review Flag: Statistics External Re view Incorporated into Response: No
Comment Excerpt:
Proposed Limits are Based on Results from a Limited Type of Wastestream
It appears that USEPA based these proposed limits from a single effluent stream

- condensate from vapor compression evaporator

– which is inappropriate. Each gasification facility is unique and so are the gasification effluent streams. Condensate from vapor compression evaporator at the gasification plant associated with the Wabash River Combined Cycle Plant (herein, ‘Wabash River’) is distillate water, which is a very clean effluent stream. In Wabash River’s case, the gasification facility is capable of discharging gasification wastewaters from up to 6 locations ‘prior to use of the gasification wastewater with water or any other pr ocess wastewater’ and not all wastewater from each of these streams has the same characteristics as the condensate from the vapor compression evaporator.
In the Technical Development Document accompanying this proposed rulemaking, USEPA acknowledges that t he Polk Power Station does produce two effluent streams, but ‘ determined that the data collected at forced circulation evaporator condensate did not demonstrate typical removal rates for pollutants generally well treated by evaporation and therefore were n ot adequate to form the basis of the limitations. Based on its review of the treatment system, EPA believes that the evaporator (or at a minimum the forced circulation evaporation stage) was operating abnormally and allowing carryover of pollutant to the c ondensate effluent stream. For this reason, EPA based the limitations for this technology option on the limitations calculated from the vapor compression evaporator effluent data.’ 3 It is unclear how USEPA determined that this was not ‘typical removal rate s for pollutants generally well treated by evaporation’ at a gasification plant.

3 Id at Section 13.8.1, Page 13

‐ 20.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 399 Regarding establishing the limitations and standards based on the distillate/condensate stream and the six effluent s treams from the Wabash River plant, see responses to DCN EPA

- HQ

- OW

2009

- 0819

- 4655, Excerpt Number 171 in Comment Code 23.a.
Regarding the exclusion of the Polk Power Station forced circulation evaporator condensate, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 6. As discussed at proposal, EPA determined that the data collected at forced circulation evaporator condensate do not demonstrate typical removal rates for pollutants generally well

- treated by evaporation and therefore are not adequat e to form the basis of the limits. See, e.g., the concentrations for TDS and chlorides in the forced circulation evaporator condensate. Based on EPA’s review of the treatment system, the data indicate that the evaporator (or at a minimum the forced circula tion evaporation stage) at Polk was operating abnormally and allowing carryover of pollutants to the condensate effluent stream. Comments on the proposed effluent guidelines from Tampa Electric Company (the owner/operator of Polk Power Station) did not dis pute EPA’s conclusion about abnormal operation of the evaporator, nor EPA’s decision not to use data for the forced circulation evaporation condensate for calculating the effluent limits for gasification wastewater.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 400 31.c. Stats NL

– Selection of Data Wi thin Facilities for FGD Wastewater

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 28 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
To accurately characterize the tails of distributions, as much data as is available should be used. For example it would require at least 100 days of sampling over the course of a year to empirically characterize the 99th percentile of daily concentrations. As the number of samples decreases, the extent to which the characterization is based on assumption, rather than fact, increases.
Over 120 days of self

- monitoring data for arsenic and mercury were available from Hatfield’s Ferry. Over 20 days of self

- monitoring data for mercury were available form Miami Fort. Almost 100 days of self

- monitoring data for nitrate

- nitrite were available from Belews Creek, and 7 days of self

- monitoring data for nitrate

- n itrite were available from Allen. In addition, almost 200 days of self

- monitoring data for selenium were available from Belews Creek, and almost 70 available from Allen.
Of these data, EPA chose to use only 78 days of self

- monitoring data for selenium from Belews Creek and 63 days of self

- monitoring data from Allen. For arsenic, mercury and nitrate

- nitrite, EPA relied exclusively on only 8 samples per facility. Four of those 8 samples were collected on successive days and an additional 1 sample per month wa s collected in each of 4 other months.
Comment Response:
In response to comments, EPA supplemented the data used to calculate the final effluent limitations, including self

- monitoring data for the plants identified by the comment. EPA based the limits f

or arsenic and mercury on treatment system effluent data for four plants, with 183 observations for arsenic and 670 observations for mercury. These data represent approximately 41⁄2 years of operation for these plants. The selenium and nitrate

- nitrite limits are based on treatment system effluent data for two plants, with 398 observations for selenium and 70 observations for nitrate

- nitrite. These data represent approximately more than 5 years of data for one plant and more than 4 years of data for the other. See the Statistical Support Document for Effluent Limitations (DCN SE05733).
EPA’s experience has shown that daily pollutant concentrations in effluent discharges generally follow a lognormal distribution. That has been true in past effluent guidelines fo r other industry sectors, and that is also the case here for effluent data from steam electric power plants. As has been the case for effluent guidelines for other industry sectors, the effluent data for steam electric power plants includes a mixture of sa mples with quantifiable (i.e., measurable) concentrationsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 401 and samples having no quantifiable measure of the pollutant (i.e., non

- detects). To properly handle mixtures of detected and non

- detected data generated in such situations, EPA has adopted a modific ation of the delta

- lognormal distribution to model pollutant effluent concentrations when developing effluent limitations. The modified delta

- lognormal distribution is appropriate in that it models effluent data as a mixture of detected measurements that f ollow a lognormal distribution and non

- detected measurements that occur with a certain probability. The modified delta lognormal model has been upheld on several occasions in court challenges and has support in peer reviewed literature. Using this well

- tes ted statistical model, EPA is able to estimate key parameters that define the distribution of the data, including the long

- term average, standard deviations, variability, and percentiles (e.g., 99 th percentile). This model thus provides a reasonable basis with which to calculate values that are used to establish the effluent limitations. EPA’s statistical approach for establish effluent limitations has been upheld in court on numerous occasions. See Chem. Mfrs. Ass’n v. EPA , 870 F.2d 177, 230 (5th Cir. 1989 ); Nat’l Wildlife Fed’n v. EPA , 286 F.3d 554, 573 (D.C. Cir. 2002); Am. Coke & Coal Chems. Inst. v. EPA, 452 F.3d 930, 945 (D.C. Cir. 2006). Furthermore, it provides a statistical approach for doing so without the need to collect the large amounts of data that otherwise may be needed to empirically establish the effluent limitations. See Appendix A, Essay Sections 2 and 4.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 29 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Furthermore, EPA chose to censor what little data it retained. Remarkably, EPA removed 1 of 8 samples for mercury from the Hatfield’s Ferry dataset, and removed 1 of the 78 samples for selenium from Belews Creek. The Hatfield’s Ferry censored data point was within the range of historical effluent concentrations. The operators of Belews Creek spec ifically addressed the censored selenium observation, refuting EPA’s conjecture that the recorded value may have been due to a system upset. Neither point should have been censored. By removing those data points, EPA eliminated the very information it was intending to characterize

– i.e., the tails of the distributions.
EPA chose to ignore the most relevant facts (i.e., available self

- monitoring data from model facilities), and instead to base their calculated ELGs primarily on assumption.
Comment Response:
In response to comments, EPA supplemented the data used to calculate effluent limitations for the final rule, including self

- monitoring data for the plants identified by the comment. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5552

- A2, Excerpt Number 2 (Comment Code 10.a).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 402 EPA does not agree that the data referred to by the commenter for Hatfield’s Ferry and Belews Creek should have been used to calculate the effluent limitations. See the response to DCN EPA

HQ

- OW

- 2009

- 0819

- 46558, Excerpt Number 5 (Comm ent Code 31.c.i) and DCN EPA

- HQ

- OW

2009

- 0819

- 4655

- A18, Excerpt Number 19 (Comment Code 31.c.ii).
Also see the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 46558, Excerpt Number 28.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 403 31.c.i. Stats NL Select Data for FGD

– Chemical Precipitation Treatment

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excerpt:
In addition to the data EPA collected and required facilities to collect, some facilities had historical self

- monitoring data on pollutant concentrations in FGD effluent: “For this rulemaking, data for most of the plants came from multiple sourc es such as EPA sampling, CWA 308, or plant self

- monitoring. For three plants (Allen, Belews Creek, and Hatfield’s Ferry), the multiple sources of the data were collected during overlapping time periods, thus, EPA combined these data into a single dataset f or the plant. For two plants (Keystone and Miami Fort), the multiple sources of the data were collected during non

- overlapping time periods. However, in these instances the time period between the non

- overlapping data collection periods was relatively smal l (two months). Furthermore, EPA has no information to indicate that the data represent different operating conditions. Thus, EPA also combined the multiple sources of data for each of these plants into a single dataset for the plant. This approach is cons istent with EPA’s traditional approach for other effluent guidelines rulemakings.” (page 13

- 6, EPA 2013)
Here, EPA acknowledged having self

- monitoring data from the Hatfield’s Ferry facility, as well as from Allen and Belews Creek. In addition, self

- monitoring data were available from the Miami Fort facility.
Comment Response:
In response to comments, EPA supplemented the data used to calculate effluent limitations for the final rule, including self

- monitoring data for the plants identified by the comment. EPA based the limits for arsenic and mercury on treatment system effluent data for four plants, with 183 observations for arsenic and 670 observations for mercury. These data represent approximately 41⁄2 years of operation for these plants. The selenium and nitrate

- nitrite limits are based on treatment system effluent data for two plants, with 398 observations for selenium and 70 observations for nitrate

- nitrite. These data represent approximately more than 5 years of data for one plant and more than 4 years of data for the other. See the Statistical Support Document for Effluent Limitations (DCN SE05733).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A1 8 Comment Excerpt Number: 5Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 404 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA identified and excluded a high measured concentration (978 ng/l) of mercury at Hatfield’s Ferry, claiming the measur ement was invalid:
“EPA excluded mercury data collected on 10/5/10 at the chemical precipitation effluent at Hatfield’s Ferry. This exclusion was due to an unusually high analytical result inconsistent with proper operation of the BAT/NSPS chemical precipi tation treatment technology.” (page 20, EPA 2012)
The effluent data collected at the model facilities are the only objective bases for characterizing the “proper operation of the BAT NSPS chemical precipitation treatment technology”. Absent additional inde pendent data on the performance of the BAT chemical precipitation technology, EPA has no objective standard against which to compare the results from the CWA 308 sampling. Therefore, absent additional supporting data, EPA would have no way to determine tha t the Hatfield’s Ferry measurement was “inconsistent” with proper operation.

Furthermore, the self

- monitoring data from Hatfield’s Ferry, which EPA chose to exclude from its analyses, provides clear evidence that the 978 ng/l mercury reading is well within the historical range of measured values. The maximum recorded mercury concentration after chemical precipitation treatment at Hatfield’s Ferry was 3310 ng/l (see Table 2, below). Also, based on 121 historical measurements 978 ng/l would fall between the 9 7th and 98th percentiles of all measurements. Because EPA’s ELG method attempts to estimate the 99th percentile of daily measurements, the 10/5/10 mercury measurement at Hatfield’s Ferry is completely relevant.
Comment Response:
EPA does not agree that E PA lacks sufficient information to determine the mercury observation for 10/5/2010 (978 ng/L) is inconsistent with proper operation of the treatment system at Hatfield’s Ferry. Based on the information in the record, EPA determined that the data should be excluded because it reflected sampling or analytical error, and thus did not reflect the BAT/NSPS level of control for mercury, for the reasons described below.
EPA excluded mercury data collected on 10/5/10 at the chemical precipitation effluent at Hatfie ld’s Ferry. This exclusion was due to an unusually high analytical result inconsistent with proper operation of the BAT/NSPS chemical precipitation treatment technology. Specifically, based on information in the record, the sampling result indicates that t he sample may have been contaminated during sample collection or was adversely affected by treatment system upset. The decision to exclude the analytical result (978 ng/L) is supported by the plant’s NPDES compliance monitoring data for that time period. T he maximum daily value reported for FGD wastewater treatment system effluent for the month of October 2010 was 127 ng/L. If the excluded value accurately represented the mercury concentration in the plant’s FGD treatmentEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 405 system effluent, due to the hydraul ic residence times and mixing that occurs in the FGD absorber and the wastewater treatment system, similarly high concentrations of mercury should have been reflected in the plant’s NPDES compliance monitoring samples. Furthermore, the maximum daily values reported by the plant for each monthly reporting period for August 2010 through February 2011 were also substantially lower than the excluded value, ranging from 108 ng/L to 268 ng/L.
The excluded value may be the result of sample contamination occurring during sample collection. EPA used “clean sampling” techniques for its field sampling program, including requiring plant staff to also use such procedures when collecting the CWA 308 samples. These clean sampling procedures are intended to minimize the pot ential for contaminating samples, particularly in environments where dust and other contaminants are present. For all plants in the field sampling program, except Hatfield’s Ferry, the CWA 308 sampling was conducted after EPA had first conducted its on

- sit e field sampling program. This approach enabled plant staff to become familiar with the specialized sampling collection protocols used for “clean sampling” prior to initiating their CWA 308 sampling. However, in the case of Hatfield’s Ferry, the plant init iated the CWA 308 sampling prior to the EPA field sampling and unfamiliarity with the clean sampling protocols may have allowed the October 2010 sample to become contaminated.
If the excluded result is not associated with sample contamination, then it indi cates that the plant did not exercise good control of the treatment system during startup following a shutdown period. All three generating units had been shutdown for at least a week preceding the December 2010 sampling event. Unit 3 then started up on Oc tober 3, generating electricity at approximately

one

- third capacity for the unit. Unit 3 then operated at nearly full load on October 4 and approximately two

- thirds load on October 5, but then shutdown again on October 6. Based on the information in the re cord, the FGD wastewater treatment system likely was not operating in a stable manner during this period. In their comments on the proposed effluent guidelines, FirstEnergy (operator for Hatfield’s Ferry) did not dispute EPA’s determination that the 978 ng /L observation should be excluded, nor EPA’s reasons for doing so.
With respect to the comment about other observations at Hatfield’s Ferry (e.g., 3310 ng/L), EPA identified other data from Hatfield’s Ferry that warranted exclusion and were not used to cal culate the effluent limitations. See the Statistical Support Document for Effluent Limitations (DCN SE05733).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 406 31.c.ii. Stats NL Select Data for FGD

– Chemical Precipitation followed by Biological Treatment

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 9 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The proposed limits for nitrate/nitrite are based on very limited data.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 54.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Con trol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 54 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:



### 5.3 The biological treatment systems that EPA evaluated as BAT provide very limited data for setting a nitrate/nitrite limit.

The biological treatment systems that EPA evaluated as BAT (Belews Creek, Allen) have very limited data to support the nitrate/nitrite criterion. Therefore, it is very challenging to assess the long

- term ability of these plants

— as well as all facilities

— to consistently achieve the nitrate/nitrite limit by anaerobic biological treatment. Normal changes in plant operations, such as coal switching and load swings, could result in a violation for a facility, as FGD wate r chemistry changes and because the limit is potentially challengingly to achieve.
Of the available data collected by EPA or by the plants during Clean Water Act (CWA) 308 sampling (shown in Figure 5

- 8), two of the data points are above the monthly limit o f 0.13 mg/L. Nitrate/nitrite data were not collected by facilities past the timeframe EPA designated as startup for each facility. During this startup timeframe, both Belews Creek and Allen facilities had measured data points that were higher than the prop osed nitrate/nitrite limits. In addition, the detection limits for some samples collected at the Allen and Belews Creek facilities were sometimes higher than the nitrate/nitrite limit.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 407 A review of the self

- monitoring data provided by the Belews Creek and Allen facilities [EPA, 2009a,b] shows that there are no long

- term data available to determine the ability of these facilities to achieve the nitrate/nitrite limits over time. EPA used “autocorrelation values” in developing limits where there was consistenc y in data over time for selenium. EPA acknowledges that not enough data are available to develop an autocorrelation value for nitrate/nitrite and instead “transferred the autocorrelation from selenium since these two chemicals behave similarly in the biolo gical system.” [EPA, 2013, pages 13

– 14 and 13

– 15; Westat, 2013] This is a significant assumption, especially to promulgate new numeric standards. While both nitrate/nitrite and selenium are reduced in biological treatment systems, their chemistries are lik ely different. Nitrate/nitrite removal occurs first and often at a slightly negative oxidation

- reduction (ORP) level. After nitrate/nitrite are removed, selenium reduction may then occur and generally at a more negative ORP level. EPA did not have enough d ata to develop variability factors and had to use arithmetic (rather than average) for the “plant

- specific long

term average.” The nitrate limit is almost completely based on the data from one plant, Belews Creek, and a selenium autocorrelation value [EPA, 2013, pages 13

– 19.] Additional nitrate/nitrite data would greatly improve the robustness of EPA’s proposed numeric limits.
Biological treatment systems are designed for selenium removal and will result in incidental nitrogen reductions. There is significa nt uncertainty in the proposed numeric standards for nitrate/nitrite because of the limited data available, as well as the assumption that the nitrate/nitrite and selenium chemistries are similar and that the nitrate/nitrate will have the same auto

- correla tion as selenium.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 408 Comment Response:
EPA does not agree that there is very limited data to support the proposed nitrate

- nitrite limits, nor that there is insufficient long

- term data to determine the effectiveness of nitrate removal. The effluent limit ations for nitrate

- nitrite, which have been revised since proposal in response to comments, are based on 70 observations collected over several years of operation. These data are more than adequate for establishing the effluent limitations and they provide long

- term demonstration of the effectiveness of nitrate removal. See the Statistical Support Document for Effluent Limitations and Section 3 of the TDD.
The commenter mentions that the biological treatment systems were designed for selenium removal and su ggests that the nitrogen reductions are merely incidental. EPA does not agree. Comments on the proposed rule acknowledge that “Thermodynamically, the nitrate/nitrite must be removed prior to initiation of selenium removal (selenate and selenite).” Therefo re although the plants installing the biological systems did so to for the express purpose of removing selenium, the biological treatment systems are de facto designed to remove nitrate/nitrite because they would not meet their designed selenium effluent c oncentration without also removing nitrate/nitrite. As shown by the data used to calculate the effluent limitations, there is not significant uncertainty about whether plants will be able to meet the effluent limitations for nitrate

- nitrite in the final ru le.
EPA evaluated the effect that coal switching and load swings may have on treatment system performance and effluent quality, and determined that plants would be able to manage any effects such operational changes may have on wastewater characteristics s uch that they would be able to meet the final effluent limitations.
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 and DCN SE05846 (memorandum Variability in Flue Gas Desulfurization Wastewater: Monitoring and Response ).

Commenter N ame: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 235 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:

C. The Proposed Nitrate/Nitrite Limit is Not Appropriate
The biological treatment systems that EPA evaluated

– Belews Creek and Allen Stations

– were designed for selenium removal. Nitrate removal is a precursor reaction which occurs prior to selenium removal in biological systems. Thus, some nitrate removal w ill occur within theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 409 bioreactor, but it is not understood how much will be removed and how that removal will be impacted by higher nitrate levels going into the bioreactors.
Also, there are very limited data to support EPA’s proposed nitrate

- nitrite limits

. As we have demonstrated, the nitrate/nitrite levels in FGD wastewater at Belews Creek and Allen are much lower than the levels in other FGD wastewaters. In addition, Belews Creek and Allen did not collect nitrate/nitrite data after the facilities compl eted the start

- up modes of their treatment systems. Therefore, there are insufficient data from these two plants for EPA to develop national effluent limitations guidelines for nitrate/nitrite.
In addition, rainwater generally contains higher nitrate/nitr ite level than the limits that EPA proposes. According to an online report,67 43 of 51 samples over 31 states in the United States contained nitrate, ranging from 0.13 mg/L to 8.16 mg/L nitrate

- N.
Given that similar background concentrations of nitrate/ni trite are likely ubiquitous, it is going to prove very difficult to meet the proposed limits, based only on likely intake water concentrations.

63 ERG Memorandum to Steam Electric Rulemaking Record, Pollutants of Concern Methodology Memorandum, April 19, 2013, EPA

- HQ

- OW

- 2009

- 0819

- 2151.

64 The seven plants referred to are Belews Creek, Allen, Miami Fort, Pleasant Prairie, Hatfield’s Ferry, Keystone, and Dickerson.

65 Computer Sciences Corporation (CSC). 2013. Results of the ICP/MS Collision Cell Method Dete ction Limit Studies in the Synthetic Flue Gas Desulfurization Matrix. (16 January. EPA

HQ

- OW

- 2009

- 0819

- 2116.

66 ERG Memorandum to Steam Electric Rulemaking Record, Pollutants of Concern Methodology Memorandum, April 19, 2013, EPA

- HQ

- OW

- 2009

- 0819

- 2151.

67 Root, E., W. Jones, B. Schwarz, and J. Gibbons. November 22, 2004. Rainwater Chemistry Across the United States.
Comment Response:
EPA does not agree. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 54. Also see the Statistical Sup port Document for Effluent Limitations (DCN SE05733).

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 4Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 410 External Review Flag: Engineeri ng External Review Incorporated into Response: No
Comment Excerpt:
EPA chose 8/26/2009 as the end of the commissioning period at Allen, and 7/31/2008 as the end of the commissioning period at Belews Creek for selenium treatment. However, the longitudinal plots for selenium at Allen and Belews Creek in Appendix 2 of EPA 2012 are completely non

informative regarding changes in the pattern of selenium concentrations in bioreactor effluent.

Examination of the actual bioreactor effluent data for selenium show that the range of values from 7/13/2009 (the date operators of Allen identified as the end of the start

- up period) to 8/26/2009 fall within the range of values from 8/26/2009 until the end of the data series (5/23/2011). Similarly, the range of values from 6/11/2008 (the date operators of Belews identified as the end of the start

- up period) to 7/31/2008 fall within the range of values from 8/26/2009 until the end of the data series (5/25/2011).
Comment Response:
In response to comment, EPA supplemented th e dataset used to develop effluent limitations for the final rule to reflect the dates that Duke Energy’s treatment system operators identified as the end of the initial commissioning period for the FGD wastewater treatment system. Thus, the data used to c alculate effluent limitations for the final rule include data that were obtained after the dates specified by the commenter (i.e., 7/13/2009 for Allen; 6/11/2008 for Belews Creek). The data used to calculate the effluent limitations also include additional data for Allen and Belews Creek that Duke Energy submitted following proposal. See the Statistical Support Document for Effluent Limitations (DCN SE05733) for information about the data that were used to calculate effluent limitations, as well as the data that were excluded.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 19 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:
EPA also identified and excluded a high measured concentration of selenium at Belews Creek:
“EPA also excluded questionable selenium data collected on 7/14/10 at the bioreactor effluent at Belews Creek. This exclusion was made since this observation (299 ug/L) is much higher than any other observed in the remainder of dataset.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 411 Since no plausible explanation validating the extreme observation could be determined, EPA excluded the bioreactor effluent selenium observation for July 14, 2010.” (page 21, EPA 2012)
EPA’s justification for excluding the 7/14/10 measurement, that “no plausible explanation validating the extreme observation could be determined” is simply false. In fact, Duke Energy, in a letter to EPA dated 2/27/2 010, did provide an explanation documenting the validity of the selenium measurement at Belews Creek on July 14, 2010:
“EPA also excluded the selenium result of 299 ppb from July 14, 2010 as an extreme observation. But this July 14 result is valid. The inc rease in selenium on this day can be directly attributed to the increased selenate (Se VI) concentration, 2,360 ppb, in the FGD influent.
The increase in dissolved selenium and selenate (VI) species in the FGD influent and bioreactor influent during this p eriod of time is more than likely due to a change in the FGD chemistry of the system and not an upset condition. Just as the mercury results in section II.A.2 above were affected by high oxidizing conditions, it is very likely that the increase in dissolve d selenium and selenate (VI) is also due to high oxidizing conditions in the scrubber. This is particularly likely since both the mercury and selenium results show the same pattern of increases dissolved phases at about the same time.“ (Duke Energy, 2012)
Comment Response:
EPA does not agree that the 7/14/2010 observation for selenium is acceptable for use in calculating the effluent limitations. The reported value of 299 ug/L selenium is much higher than any other observation in the remainder of dataset for Belews Creek. EPA evaluated the selenium contributions in the FGD purge and bioreactor influent (total and dissolved selenium, as well as concentrations of selenate and selenite), and the values for total selenium, selenite, and selenate in the bioreac tor effluent (there are no dissolved selenium results for the bioreactor effluent on that date). In addition, EPA evaluated the concentrations for total selenium, dissolved selenium, selenite, and selenate at all three sampling locations for the months pre ceding and following the July 14 sampling event. EPA also evaluated electricity generation, absorber and wastewater pH data, bioreactor influent ORP, and bioreactor influent and effluent nitrate concentrations for 7/14/2010 and the months preceding and fol lowing that date for indications of changes or abnormalities.
There were no significant changes in ORP to suggest the wastewater characteristics reflected the effects of high oxidizing conditions in the scrubber, so the commenter’s suggestion in that regar d is unlikely. EPA noted that the bioreactor influent nitrate concentrations rose somewhat in the days preceding the observation; however, the increase was not large and the bioreactor effluent nitrate concentrations were non

- detect at <2.3 mg/L, showing t hat the bioreactor was effectively denitrifying the wastewater.
The high effluent selenium observation also coincided with elevated selenate in the effluent (217 ug/L). There were also substantial increases in total selenium and selenate in the bioreactor influent and the FGD purge, showing that the bioreactor did experience an increased pollutant load. However, even taking into account the concentration of selenate present in the FGD purgeEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 412 and bioreactor influent samples, the bioreactor effluent is substan tially higher than would be expected based on the demonstrated performance of the Belews Creek biological treatment system, as well as the performance observed for the biological treatment system at Allen. For example, the selenium in the bioreactor influe nt on 7/14/2010 was less than 3 times higher than the influent concentration for the previous observation on 6/23/2010; yet when the bioreactor influent selenium load increased by 10 times in May 2011 there was little effect on effluent concentrations (ris ing from <5 ug/L to 7/7 ug/L). Similar examples can be found at Belews Creek for selenate, where a large change in selenate (relative to the change observed for 7/14/2010) was not accompanied by increased effluent selenium or selenate. See, e.g., data for October 2011 and December 2012.
These observations for Belews Creek are supported by the data for the biological treatment system at Allen. There were multiple occasions at Allen when the bioreactor influent selenium and selenate increased sharply, with th e concentrations rising 10

- 15 times higher in a short period of time, yet with little if any observable effect on the bioreactor effluent concentrations. See, e.g., Allen data for August 2010, March 2011, December 2011, September 2012, and March 2013. In a ddition, the influent selenium concentrations at Allen in September 2012 and March 2013 were even higher than observed at Belews Creek on 7/14/2010.
The 299 ug/L observation is 10 times higher than any of the other 398 observations for the treatment system s at Belews Creek and Allen, which represent more than 5 years of operation at Belews Creek and more than 4 years of operation at Allen. Excluding the 7/14/2010 observation, there are 216 observations for selenium in the bioreactor effluent; the maximum va lue is 29.4 ug/L and the median is 6.2 ug/L (i.e., half of all data are lower than 6.2 ug/L). There are 182 observations for selenium in the bioreactor effluent at Allen; the maximum value is 27.6 ug/L and the median is 5.0 ug/L.
Based upon a thorough revi ew of the bioreactor performance data for Allen and Belews Creek, EPA concluded that the 7/14/2010 observation should be excluded when calculating the effluent limitations for the final rule because the unusually high value is the result of a treatment sys tem upset condition or other abnormal operation, such as would result from inadequate operator control of the biological process, and thus does not reflect the BAT level of control. This is consistent with information EPA obtained during a site visit to Al len Station on October 22, 2009:
“Allen stated that the major improvement of the Allen biological treatment system over the Belews Creek system is the inclusion of oxidation

- reduction potential (ORP) and pH probes on each individual cell (the Belews Creek system has one ORP probe for each stage). Additionally, the Allen system has sampling points on the effluent from the second stage (Belews Creek has sampling points on the effluent from the second stage recycle). These improvements have resulted in greater ease of operations for the biological treatment system at Allen.” DCN EPA

HQ

- OW

- 2009

- 0819

- 0598"
A properly operated treatment system includes close operator attention to influent wastewater characteristics, key process control parameters and effluent qua lity. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerpt Number 107 and DCN SE05846 (memorandumEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 413 Variability in Flue Gas Desulfurization Wastewater: Monitoring and Response ). Also see Duke Energy’s March 2014 submittal of data for Allen and Belews Cr eek Stations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 414 31.c.iii. Stats NL Select Data for FGD

– Chemical Precipitation followed by Vapor

Compression Evaporation Treatment

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 62 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Furthermore, EPA’s sample data collection for distillate limit setting resulted in a small da ta set comprising only three samples of the Brindisi brine concentrator distillate (that is, evaporator distillate) and three samples of the crystallizer condensate. These data were collected from one plant (Brindisi) over a period of 3 consecutive days in 2011 [EPA, 2012]. To set appropriate limits for VCE distillate, additional data with wider plant and operational characteristics would be useful.
Comment Response:
EPA does not agree that additional data are needed to establish effluent limitations for FGD wastewater based on vapor

- compression evaporation treatment technology.
EPA has used all available valid data in developing the final effluent limitations and standards. Furthermore, in its proposed rule, EPA clearly identified the data that it had col lected and used to calculate the proposed limitations, along with its data selection criteria. EPA solicited comment on the proposed rule, providing stakeholders with the opportunity to submit additional data if they chose to do so. In some cases, such as for the chemical precipitation and biological treatment technologies for FGD wastewater, commenters submitted large amounts of data representing years of treatment system operation. EPA evaluated the new effluent data and, as appropriate, included these da ta in establishing the effluent limitations for the final rule. However, in other cases, such as treatment of gasification wastewater using evaporation and treatment of FGD wastewater using vapor

- compression evaporation technology, EPA received no addition al data over the course of the 106

- day public comment period. EPA also notes that a pre

- publication version of the proposed rule was posted on EPA’s website in April 2013, five months before the September 20, 2013 end of the public comment period. As a res ult, industry and other stakeholder had ample opportunity to collect and provide additional data for the vapor compression evaporation treatment technology to EPA, but did not do so. Thus, in establishing the ELGs, EPA has used all available and relevant d ata that fit its data selection criteria. Had industry or other stakeholders come forward during the comment period and provided EPA with more data, EPA likely would have used it, provided it was valid and representative of the BAT/NSPS technology basis, a s appropriate. See Appendix A, Essay Section 3.2.1.1.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 415 Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 67 External Review Flag: Engineering External R eview Incorporated into Response: No
Comment Excerpt:

5. The effluent limits based on mechanical evaporation are reasonable.
EPA’s effluent standards for mechanical evaporation are based on data from the Enel’s Federico II plant in Brindisi, Italy. 259 Th ese limits are based on a rigorous and well

- documented sampling analysis at that plant. 260 The system at Brindisi produces two separate wastewater streams: a distillate from the brine concentrator and a condensate from the crystallizer. EPA based its eff luent limits on the more concentrated of the two waste streams

— the crystallizer condensate. Because most plants operating these systems will combine these waste streams prior to discharge or reuse in the plant, EPA’s decision to base the limits on the more concentrated waste stream provide an extra margin for compliance. 261 Therefore, these limits should be readily achievable at plants operating a well

- managed mechanical evaporation system.

259 TDD at 13

- 19.

260 See EPA

- HQ

- OW

- 2009

- 0819

- 1792.

261 TDD at 1 3

- 19 to 13

- 20.
Comment Response:
EPA agrees that plants operating the vapor

- compression evaporation technology basis are capable of meeting the final effluent limitations and standards. In addition, there are other technologies and process that are techn ologically available and are capable of meeting the final effluent limitations and standards. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 5552

- A2, Excerpt Number 7.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 416 31.d. Stats NL

– Selection of Data Within Facilities for Gasification Wastewater

Commenter Name: Cari Boyce Commenter Affiliation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 94 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:
The very l imited data set does not provide a comprehensive evaluation of the performance of wastewater treatment technologies for coal gasification (IGCC) systems and is inadequate to support the proposed effluent guidelines for this subcategory. The proposed guidel ines are based on very sparse data on the performance of the only two IGCC systems (Wabash River Combined Cycle Plant (Wabash River) and Polk Power Station (Polk)) in operation within the U.S. at the time of the proposed rule’s development. 46 The data set comprised only 4 samples from each of the two plants for each of the four pollutants being considered for limitation. Moreover, for each of the two plants, the 4 samples were taken from 4 days within a single calendar month. 47 From this already limited da ta set, EPA discarded the arsenic and mercury data from the Wabash River facility 48 for use in the statistical analysis and limitation development. 49 As a result, the effluent sample results for arsenic and mercury are limited to a single calendar month ( and actually a single 4

- consecutive

- day period) from a single plant.

46 TDD Section 4.2.3, page 4

- 10 [EPA

- 921

- R

- 13

- 002]. Duke Energy’s Edwardsport facility, which went operational in June 2013, was not in service when data for the proposed rule was colle cted and therefore, data from this unit was not available for EPA’s evaluation in developing the proposed rule.

47 See, “Sampling Data Used as the Basis for Effluent Limitations for the Steam Electric Rulemaking,” (10/31/2012) [DCN SE02002] (referred to in these comments as “Sampling Data”).

48 TDD
, at Section 13.8.1, page 13

- 21

49 The data was discarded as failing EPA’s data editing criteria since more than 50% of the influent concentrations for arsenic and mercury were either below detection limits or wer e less than 10 times EPA’s baseline value. TDD, at Section 13.4, page 13

- “Memorandum to Ronald Jordan: Effluent Limitations for FGD Wastewater, Gasification Wastewater, and Combustion Residue Leachate for the Proposed Effluent Limitation Guidelines and St andards for the Steam Electric Rulemaking,” (Jordan Memorandum”) (10/20/2012) [DCN SE01999], page 54.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 417 EPA does not agree that the effluent data for gasification wastewater are inadequate for establishing effluent limitations, and EPA al so does not agree that the data in the record (including both influent and effluent data) are insufficient for evaluating the performance of the vapor

- compression evaporation technology for treating gasification wastewater.

EPA has used all available vali d data in calculating the effluent limitations established by the ELGs. Furthermore, in its proposed rule, EPA clearly identified the data that it had collected and used to calculate the proposed limitations. EPA solicited comment on the proposed rule, pro viding stakeholders with the opportunity to submit additional data if they chose to do so. In some cases, such as for the chemical precipitation and biological treatment technologies for FGD wastewater, commenters submitted large amounts of data representi ng years of treatment system operation. EPA evaluated the new effluent data and, as appropriate, included these data in establishing the effluent limitations for the final rule. However, in other cases, such as here for gasification wastewater and for the vapor

- compression evaporation technology for FGD wastewater, EPA received no additional data. EPA notes that the commenter operates an IGCC plant that began commercial operation in June 2013, months before the end of the 106

- day comment period for the prop osed rule ended on September 20, 2013. Thus at the same time that the commenter was asserting in comments that EPA should use more data, and was in a position to provide such data to EPA for its own plant, it failed to do so. The commenter claims that data for their Edwardsport IGCC facility “was not available for EPA’s evaluation in developing the proposed rule,” but that in no way justifies a failure on the part of the commenter to provide such data during the comment period for the proposed rule, at the very same time that they were asserting that EPA’s data were inadequate. Thus, in establishing the ELGs, EPA has used all of the data it could accumulate. Had industry or other stakeholders come forward during the comment period and provided EPA with more data, EPA likely would have used it if the data were valid and representative of the BAT technology, as appropriate. See Appendix A, Essay Section 3.2.1.1.
As explained in the TDD at proposal, EPA excluded certain data from Wabash River for calculating the arsenic and mercury limits because they failed to pass the criteria for the LTA test. See TDD Section 13 and the Statistical Support Document for Effluent Limitations (DCN 05733).

Commenter Name: Cari Boyce Commenter Affiliation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 95 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

The Data Set Is Inadequate to Support the Effluent Limit Development ProcessEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 418 Duke believes the data set for the gasification sector should be considered insufficient to support effluent limitation development. This is especially true given that the development of a long

- term average to characterize the baseline performance of a mo del technology is the critical foundation of the limitation development process, as described by EPA in the above section. There are only eight daily samples confined to two calendar months for selenium and Total Dissolved Solids (TDS) and merely four dail y samples arising from a single month and a single IGCC plant for arsenic and mercury. Although it is recognized that “long

- term” is not a defined term, it seems intuitive that a single calendar month comprising only 4 daily samples cannot be considered “l ong

- term.” While a long

- term average is intended to level out the operational variability of facility processes and treatment system, it is equally true that the LTA will reflect the process variability indirectly. To be meaningful, “long

- term” will need t o encompass a sufficiently long period to reflect variations in coal, 54 other process ingredients, process equipment wear, calibrations, operational settings and climatic conditions. Samples taken from a very limited time frame (all Wabash River samples w ere taken from within a 9

- day period in October 2011 and all Polk samples were taken from a 4

- consecutive

- day period in February 2011) will be expected to be relatively uniform as it is much more likely to reflect the same fuel, similar process and treatme nt facility conditions. This estimate cannot be considered as a reliable or definitive characterization of long

- term average performance. Lacking a meaningful LTA, which is a critical component of the limitation development process, the limitations propo sed for gasification wastewater are clearly flawed.
The same deficiency applies to the development of variability factors for daily and monthly performance. A 4

- sample or 8

- sample data set from such a brief period cannot be considered a representative view of variability. This deficiency is particularly apparent when monthly average limits are considered. For arsenic and mercury, the data set covers only a single calendar month (actually less than a single week). Since no distribution of monthly averages ex ists, a 95% variability factor could not be calculated. Absolutely no information on variability of monthly averages can be inferred from this data. Even for selenium and TDS, there are only two monthly averages available (and only a single monthly average from each plant). This methodology cannot be considered an adequate basis for setting limits that would be in effect for many years or even decades of operation (given the associated variability in effluent quality that may be anticipated over such period s).
Consequently, Duke believes it is statistically and technically inappropriate to use this data set in determining a continuous compliance limit. In a hypothetical scenario, if a permittee were to apply for an NPDES permit modification in order to chan ge a discharge limitation, and that permit modification was supported by only four data points gathered over only four days’ time, then the permitting agency would be very likely to deny that request on the basis that the limited data set does not appropri ately characterize the wastestream. Duke Energy believes that EPA needs more data to appropriately characterize IGCC gasification wastewater.

Data Set Too Sparse to Develop Autocorrelation Factor
Within the Technical Development Document, EPA acknowledges that it “was unable to perform an evaluation and obtain a reliable estimate of the autocorrelation factor because there were too few observations available at the plants. Thus, for these plants, EPA set theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 419 autocorrelation to zero in the calculation of the limits. EPA did so because there were not sufficient data to reliably evaluate the autocorrelation, nor did EPA have a valid correlation estimate available that could be transferred from a similar technology and wastestream.” 55 The autocorrelation is impo rtant since “the autocorrelated data affect the true variability of treatment performance, [and] EPA typically adjusts the variance estimates for the autocorrelated data.” 56 For the gasification subcategory there was no adjustment to the EPA calculated lim its to account for possible variation. 57

In summary, Duke Energy believes that it is inappropriate to set national effluent limitations and standards using only two brief sampling periods from two facilities for selenium and TDS. Duke Energy strongly obje cts and thinks it is highly inappropriate to set limits for arsenic and mercury since the data only comes from one facility over a period of a few days. A meaningful LTA cannot be developed from this sparse data set and similarly no meaningful performance variability information can be inferred.

54 Trace contaminant levels can vary substantially with the type and origin of the coal being used and these variations can affect process wastewater quality. Variations can and do occur even when the coal comes from a single mine over extended periods.

55 TDD
, at Section 13.6.3, page 13

- 15

56 Id. at Section 13.6.3, page 13

- 14

57 Final Detailed Study Report Chapter 3

– Steam Electric Industry Profile p. 3

- 17
Comment Response:
EPA does not agree that the effluent data for gasification wastewater are inadequate for establishing effluent limitations, and EPA also does not agree that the data in the record (including both influent and effluent data) are insufficient for evaluating the performance of the vapor

- compres sion evaporation technology for treating gasification wastewater. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 94.
The commenter misconstrues the meaning of the term “long

- term average,” as it applies to the statistical calculation o f the effluent limitations. As stated in the Statistical Support Document for Effluent Limitations (DCN 05733), the “long

- term average (LTA) is the mean of the underlying statistical distribution of the daily effluent values.” Thus, while the LTA represent s the average concentration that is achieved over a period of time, it is based on the statistical distribution of the data. Given the known or assumed distribution that is applicable for the effluent data, the methodology presented in TDD Section 13 can b e used to estimate the long

- term average. In the case where all observations are non

- detected, the LTA is the arithmetic mean of the reported values.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 420 As the commenter states, in cases where there are not sufficient data to determine that the effluent data are autocorrelated and to calculate that value, EPA assumed the data are not autocorrelated. This is a reasonable assumption in the absence of data showing that autocorrelation is present. The commenter did not provide any data showing that the data are

a utocorrelated, nor for use in calculating autocorrelation.

Commenter Name: Quinlan J. Shea III Commenter Affiliation: Edison Electric Institute (EEI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4487

- A1 Comment Excerpt Number: 71 External Review Flag : Engineering External Review Incorporated into Response: No
Comment Excerpt:
The proposed gasification wastewater limits on arsenic, mercury, selenium, and TDS are based on data from two facilities for arsenic and mercury and one facility for selenium a nd TDS

– eight data points total, four samples from each of the two facilities (Polk and Wabash River). As EPA says, there are “little characterization data” (TDD at 1

- 8). EPA had too few data to analyze for autocorrelation, and so it simply assumed ther e was no autocorrelation ( id. 13

- 15).
Apparently EPA based the limits on condensate from a vapor compression evaporator, probably the cleanest wastestream that could be found among several internal to the Wabash River station. For the Polk Power Station, E PA assumed that the evaporation (or at least the forced circulation evaporation stage) was acting abnormally ( id . at 13

- 20).
There are six locations at Wabash River from which wastewater could be discharged and two effluent streams at Polk. Although Wabash River reuses most of the waters in the process, there are times when the wastewaters need to be discharged from the facility.

Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 94 and EPA

- HQ

OW

- 2009

- 0819

- 4305

- A3, Exc erpt Number 95.
Regarding the EPA’s conclusion that the forced circulation evaporation stage of the treatment system at Polk was not operating properly, see the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4534

- A2, Excerpt Number 4.

The commenter states that there are six locations at Wabash River from which wastewater could be discharged; however, the commenter neglect to also note that only one of these wastewater streams is gasification wastewater. The final rule defines gasification wastewater as follows:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 421 “The term gasification wastewater means any wastewater generated at an integrated gasification combined cycle operation from the gasifier or the syngas cleaning, combustion, and cooling processes. Gasification wastewater includes, but is not limited to the foll owing: sour/grey water; CO 2 /steam stripper wastewater; sulfur recovery unit blowdown, and wastewater resulting from slag handling or fly ash handling, particulate removal, halogen removal, or trace organic removal. Air separation unit blowdown, noncontact cooling water, and runoff from fuel and/or byproduct piles are not considered gasification wastewater. Wastewater that is collected intermittently in floor drains in the gasification process area from leaks, spills, and cleaning occurring during normal ope ration of the gasification operation is not considered gasification wastewater.”
In response to the comment, EPA contacted WVPA and obtained additional information to better understand the nature of the various wastewater streams mentioned by the comment ( see DCN SE04337 and SE04337A1). The diagram provided by the WVPA (DCN SE04337A1) identifies the following wastestreams: RCC distillate; S

- 260 (sump pump); Cooling tower blowdown; ASU blowdown; Slag pile runoff; Petcoke pile runoff & Adjacent roadway; and S tormwater runoff. Only the first wastestream, RCC distillate, is wastewater from the gasification process and included within the ELG definition. The other wastestreams (other than stormwater runoff which also is not gasification wastewater) are actually specifically identified within the definition as not being gasification wastewater.

Commenter Name: S. Dear Schramm

- Satayathum Commenter Affiliation: Wabash Valley Power Association, Inc. (WVPA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4534

- A2 C omment Excerpt Number: 2 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:

Additional Data is Needed
The basis for the proposed effluent limitations on gasification wastewater is inadequate and additional data is needed. USEPA proposes to limit gasification wastewater from all new and existing sources based on sample results collected from one facility for arsenic and mercury limits and two facilities for selenium and total dissolved solids limits.

To be mo re specific, the proposed limit for arsenic and mercury are based on four data points from a single existing facility (Tampa Electric’s Polk Power Station); selenium and total dissolved solids are based on eight data points

– four sample results from each of the two sampled facilities. We understand that USEPA requested data from all gasification facilities with an NPDES permit in the United States that were in existence in 2010

– which happens to be two facilities (Polk Power Station and Wabash River Combi ned Cycle Plant). At the time ofEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 422 USEPA’s 2010 wastewater sampling program letter, several gasification plants were in the process of being permitted or already commenced construction.
Proposing limits based on so few data points on all existing and future gasification wastewaters is premature, especially for arsenic and mercury. USEPA acknowledges in the Technical Development Document accompanying this proposed rulemaking that gasification wastewater has been identified by USEPA as one of several wastestrea ms for which there is ‘little characterization data.’ 1 USEPA also states ‘...for the vapor

- compression evaporation treatment technology option for gasification wastewater (represented by Polk and Wabash River), EPA was unable to perform an evaluation and ob tain a reliable estimate of the autocorrelation because there were too few observations available at the plants. Thus, for these plants, EPA set the autocorrelation to zero in the calculation of the limits. EPA did so because there were not sufficient data to reliably evaluate the autocorrelation, nor did EPA have a valid correlation estimate available that could be transferred from a similar technology and wastestream. ’ 2

1 Section 1.3.2, Page 1

‐ 8. EPA. 2013. Technical Development Document for the Propos ed Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, EPA

‐ 821

‐ R

‐ 13

‐ 002, EPA

‐ HQ

‐ OW

‐ 2009

‐ 0819

‐ 2257. April 2013.

2 Id at Section 13.6.3, Page 13

- 15.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 94 and EPA

- HQ

OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 95.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 170 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

C. The Record Does Not Have Adequate Data for IGCC Wastestreams
The proposed limits on arsenic, mercury, selenium, and TDS are based o n data from two facilities for arsenic and mercury and one facility for selenium and TDS

– eight data points total, four samples from each of the two facilities (Polk and Wabash River). At both plants the four samples were taken in a single calendar month

. And since EPA discarded arsenic and mercury data from Wabash River, the arsenic and mercury data are from four consecutive days at a singleEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 423 plant. As EPA says, there is “little characterization data” (2013 TDD at 1

- 8). EPA had too few data to analyze for autocorrelation, and so it simply assumed there was none ( id. 13

- 15). In particular, four daily samples from a single plant in a single month cannot characterize a “long

term average” for the industry.
Comment Response:
See the response to DCN EPA

- H Q

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 94 and EPA

- HQ

OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 95.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 424 31.e. Stats NL

– Baseline Substitutions

Commenter Name: Steve Jackson Commenter Affiliation: Alliant Energy Corporate Services, Inc. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4516

- A2 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Data substitution methods used to evaluate impacts and benefits are flawed
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4516

- A2, Excerpt Number 17.

Commenter Name: Steve Jackson Commenter Affiliation: Alliant Energy Corporate Services, Inc. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4516

- A2 Comment Excerpt Number: 17 Ex ternal Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:
Data substitution methods used to evaluate impacts and benefits are flawed.
EPA states that data substitution methods were utilized when developing the proposed ELG limits. At section 13.2.2 of the TDD, EPA describes how it utilized a baseline value for certain pollutants in place of a detected value or sample

- specific detection limit "to account for the possibility that certain detected results may be at a lower concentration than can be reliably achieved by well

- operated laboratories". This methodology is flawed for three reasons. First, what does this methodology say about the validity of compliance data? To illustrate, one of our facilities recently re ceived its new NPDES permit with an arsenic limit of 0.2 microgram per liter (ug/l). If data representing compliance with such a low limit were included in the ELG data set, EPA would .have substituted the data

- but the facility is nevertheless expected to defend the laboratory 's results and demonstrate compliance. Secondly, this methodology overestimates the amount of pollutant in a facility's discharge, thereby misrepresenting the rule impact and possibly resulting in the development of flawed limits. Fi nally, what does this methodology say about the capability of laboratories? Is the data generated by a certified, accredited laboratory invalid? Should a facility be using this data to demonstrate compliance? Alliant Energy requests that EPA re

- evaluate th is methodology, considering instead the cost and regulatory attributes of using actual available data compared to data substitution .Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 425 Comment Response:
EPA disagrees that its limitations methodology that considers the use of baseline substitution is flaw ed. In response to comments such as these, EPA reevaluated the baseline substitution approach and made adjustments for the final rule. For the final rule, EPA has used a reasonable approach that considers the effect of using baseline substitution, in essen ce calculating what the limitations would be with and without the substitution. The approach that produces the higher value was selected as the effluent limitation. See Appendix A, Essay Section 3.5 for the effluent limitations.

The commenter has confused limitations development and compliance requirements. The limitations methodology is a statistical approach to establishing limitations which are incorporated into facility permits. The permit regulations in 40 CFR part 122, not today’s limitations methodol ogy, establish the requirements that are applicable for monitoring compliance with effluent limits included in NPDES permits.
The commenter has also confused limitations development with EPA’s pollutant removal estimates for the rule and the environmental assessment of the baseline impacts of the pollutant discharges to the environment and how those impacts would be mitigated by the ELGs established by this rule. EPA does not use the effluent limitations values in the environmental assessments. For details on how EPA included non

- detect values in developing effluent limitations, see TDD Section 13 and DCN SE05733. For details on how EPA included non

detect values for estimating pollutant reductions and related analyses, see TDD Section 10 and the Costs & Loa ds Report.

Commenter Name: Kim Mireles Commenter Affiliation: Luminant Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4614

- A1 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Exc erpt:
EPA's proposed steam electric limits for FGD wastewater are too low because EPA substituted "baseline" values and did not use the correct statistical method for the sampling design used.
When a reported concentration or a detection limit was below an EPA "baseline" value, EPA used the baseline number instead. EPA should provide explanation of their use of the term "baseline." It appears that the term is used to devise a value for data substitution, but EPA provides no explanation or justification f or this data technique.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 426 EPA disagrees with the comment that EPA has not explained the baseline value. TDD Section 13 and DCN SE05733 define EPA’s use of the term “baseline value,” explains how those values were derived, and explain the methodology used to substitute baseline values in the data processing and limitations calculations. (This information was similarly provided in the documentation for the proposed rule

– see the TDD Section for the proposed ELGs and DCN SE01999 and DCN SE02 000.) See DCN SE05733 and the response to DCN EPA

- HQ

- OW

2009

- 0819

- 4379

- A1, Excerpt Number 172.
EPA disagrees with the comment’s assertion that EPA “did not use the correct statistical method for the sampling design used.” EPA used all of the available dat a that demonstrated the performance of the model technology (including its proper operating and designed conditions). The data used for EPA’s limitations calculations were not selected or collected by a statistical sampling design. See Essay Section 4.2.3.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 6 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

For Arsenic, the baseline substitutions caused a reduction in the mean and the standard deviation of the data from Miami Fort. For Selenium, the baseline substitutions caused reductions in the standard deviations of the data from All en and Belews Creek.
Comment Response:
In response to comments on the proposed rule, EPA has calculated the limitations using two approaches to baseline substitutions as described in Appendix A, Essay Section 3.5. Because the data entering into the calcu lations differ, it is expected that different assumptions for non

detected values would affect the means and standard deviations. For the final rule, EPA selected the higher value from the two approaches for the effluent limitations. See the response to DC N EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number : 172Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 427 31.f. Stats NL

– Data Aggregation

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 68 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:



### 6.9 Averaging duplicates also reduces variability compared to what is actually measured.

On page 10

- 5, the TDD [EPA, 2013] states
“... where duplicate sam ple results were obtained, the duplicates were averaged to represent that time of sampling.”

Alternative recommendation : When estimating standard deviation, randomly choose one of the two duplicate results. If a non

- detect is the result selected, the stand ard deviation of the entire set can be computed by using a censored

- data method such as Kaplan

- Meier, rather than by using substitution.
Comment Response:
TDD section 13 describes the statistical derivation of standard deviations used in calculating the limitations.
EPA disagrees with the comment’s alternative recommendation to randomly choose one of the two duplicate results in calculating limitations. As explained in Appendix A, Essay Section 3.3, the approach suggested by the commenter would not be con sistent with NPDES regulations and would introduce potential sources of variation that are not generally appropriate for inclusion in effluent limitations. EPA’s approach in averaging duplicates is consistent with reporting of compliance data required by N PDES permits.
EPA disagrees that censored methods, including the Kaplan

- Meier approach, are more appropriate than the modified delta

- lognormal distribution for the limitations data. See Essay Section 4.2.2 for EPA’s consideration of censored methods.

Com menter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 128Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 428 External Review Flag: Engineering External Review Incorporated into Response: No

Comm ent Excerpt:
8. Some remaining observations on procedures in the TDD.
a) On page 10

- 10 of the TDD, EPA computes an average effluent concentration by averaging the 4 values of EPA’s 4

- day sampling event, and then using the average to represent that month, averaging it with 4 individual CWA monthly samples. This method is acceptable only to estimate the overall average. Averaging the 4

- day event to obtain a single number incorrectly decreases the variability as compared to a single monthly sample. The TDD’s method will tend to underestimate the standard deviation, a percentile, and the variability factor.

Alternative Recommendation : one of the four samples in the 4

- day set should be randomly selected instead to represent that month. In this way equivalent da ta are used for each month, preserving the characteristic of standard deviation. This more accurately describes the variability used to compute effluent limitations.
Comment Response:
The comment has confused EPA’s limitations development (TDD Section 13) with EPA’s procedure for estimating pollutant loadings and removals (TDD Section 10). The arithmetic means described in TDD Section 10 were used solely to simplify the calculation of estimated effluent pollutant loadings and pollutant removals, while s till providing a reasonable estimate of these values. That approach was not used when calculating the effluent limitations. See TDD Section 13 and TDD Appendix B for the statistical procedures EPA used to derive the monthly average limitation. EPA disagree s that it would be appropriate to randomly select one value from each month in developing monthly averages. See Appendix A, Essay Section 3.3 on use of averaged duplicates. Additionally, in developing effluent limitations, EPA uses as much data as are avai lable that meet the data acceptance criteria, including that the data are valid results and reflect performance of the BAT technology. See Essay Section 3.2.1.1.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) D ocument Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 129 External Review Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 429 c) On page 10

- 5 the TDD states that where duplicate sample results were obtained, the duplicates were averaged to represent that time of sampling. Averaging again reduces variability from what is actually measured.

Alternative Recommendation : when estimating standard deviation, randomly choose one of the two duplicate results. If a nondetect is the one selected, the standard deviation of the entire set can be computed using a censored data method such as Kaplan

- Meier rather than using substitution.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number #68 and DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 128.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 135 External Re view Flag: Engineering External Review Incorporated into Response: No
Comment Excerpt:



### 6.7 Averaging a 4

- day event to obtain a single number incorrectly decreases variability, as compared to using a single monthly sample.

EPA computes an average effluent concentration by averaging the four values from EPA’s 4

- day sampling event to represent that month, and then averaging it with four individual Clean Water Act monthly samples [EPA, 2013, page 10

- 10]. EPA’s procedure will tend to underestimate the standard deviation, the percentile, and the variability factor.

Alternative recommendation : Instead, one of the four samples in the 4

- day set could be randomly selected to represent that month. In this way, equivalent data are used for each month, preserving the c haracteristic of standard deviation. This choice more accurately describes the variability used to compute effluent limitations.
Comment Response:
The comment is incorrect in stating that EPA has averaged data to obtain single monthly values to use in de veloping the limitations. See TDD Section 13 Appendix B for EPA’s methodology in developing monthly average limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 68 and DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 128.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 430 31.h. S tats NL

– Statistical Method used to Calculate the Limits

Commenter Name: Cari Boyce Commenter Affiliation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 97 External Review Flag: No External Review External Re view Incorporated into Response: No
Comment Excerpt:

Detection Limit Issues for the Proposed Limits for Arsenic and Mercury
In addition to the deficiencies discussed in the preceding section, other problems adding to the inappropriateness of the proposed effluent limitations for arsenic and mercury for gasification wastewater are presented here. In Section X.E of the preamble to the Proposed Rule, EPA states “Due to routine variability in treated effluent, a power plant that discharges consistently at a l evel near the values of the daily maximum limitation or the monthly average limitation may experience frequent values exceeding the limitations. For this reason, EPA recommends that power plants design and operate the treatment system to achieve the option long

- term average for the model technology. Thus, a system that is designed to represent the BAT level of control will be capable of complying with the limitations.” 59 With this prelude, Duke Energy states the following additional concerns with the proposed limitations for arsenic and mercury for gasification wastewater.

Arsenic
The arsenic daily limitation in the proposed rule is 4 ug/L, which is the detection limit for arsenic as well. 60 The option LTA from Table X.1 of the preamble to the pro posed rule is also 4.0 ug/L. The limit for arsenic was set at the detection limit for arsenic, based on only the limited data set of 4 daily samples gathered from Polk Power Station, each of which showed arsenic to be non

detectible in the effluent. An eff luent limit set at a detection limit is objectionable under the limited data set available here. The problem presented by such circumstances is that there is no information on variability of the effluent concentration. EPA concedes as much in Table 13

- 7 of the TDD, where footnote “c” states, with respect to the arsenic data, that “variability factors could not be calculated” since “[a]ll observations were non

- detected.” A facility confronted with such a limit would have no assurance that its discharge could consistently meet an effluent limit equal to the detection limit when only 4 samples have been taken, even if they all have been non

detectible. Considerably more data showing only non

- detected results would be needed before a discharger could have some c onfidence that the range of variability is confined beneath the detection limit.
Ironically, this situation opens the very real possibility EPA warned of concerning frequent exceedances due to routine treated effluent variability. The Polk Station’s non

- d etect arsenic discharges could be running close to the detection limit but Polk will have no way of knowing that

– at least not until sufficient time passes for routine variability to express itself with anEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 431 exceedance. Duke Energy believes that, due to rou tine variability in discharge, a technology

based effluent limitation set at a detection limit will not be consistently attainable. Consequently, Duke Energy respectfully urges that the proposed arsenic limit at the detection limit should be deleted.

Mercu ry
The mercury daily maximum and monthly average limitations from the proposed rule are 1.76 ng/L and 1.29 ng/L, respectively. Duke Energy questions whether EPA sampling and analytical method 1631E or other available analytical methods are sufficiently sen sitive to consistently measure mercury to this low level. The proposed option LTA in Table X

- 1 61 is 1.075 ng/L. EPA itself recommended that power plants design and operate treatment systems to meet the option LTA. Duke Energy doubts that analytical method s are sensitive enough to consistently differentiate between the option LTA of 1.075 ng/L and the proposed daily maximum and monthly average limitations of 1.76 ng/l and 1.29 ng/L. Even if a state

- of

– the

- art vapor

compression evaporation treatment system i s built to meet the option LTA, Duke Energy has serious reservations that sufficiently sensitive analytical methods will consistently measure and report accurately to within 0.685 ng/L (i.e., 1.76 ng/L daily limitation minus 1.075 ng/L option LTA = 0.685 n g/L). Duke Energy believes this limit should be deleted.

59 78 Fed. Reg. at 34490, in Section X.E, EPA described its methodology for accounting for operational variability in treated effluent values in the setting of daily maximum and monthly average effluent limitations.

60 See Table X.1, Section X.E of the preamble to the proposed rule. See also TDD, Table 13

- 7, Section 13.8.2, and the Jordan Memorandum, Section 5.6 and Tables 34 and 47.

61 78 Fed. Reg. at 34490
Comment Response:
EPA disagrees wit h the comment’s assertion that the arsenic daily maximum limitation does not allow for sufficient variability, nor does EPA agree that an effluent limitation set equal to a detection limit may not be consistently attainable. (Here, the term “detection limi t” is referring to the quantitation limit). Such an approach has been used in previous ELG rulemaking; see, e.g., the ELGs for the Pulp, Paper, and Paperboard Point Source Category. As explained in Appendix A, Essay 3.1, the data EPA used to establish eff luent limitations reflect many sources of variability, including variability associated with sampling and laboratory analysis. This holds true for the non

- detect data used to establish the effluent limitations for arsenic in gasification wastewater and for FGD wastewater based on evaporation technology. See Essay Section 2.5. Also see the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4534

- A2, Excerpt Number 7.
EPA disagrees with the commenter’s assertion that more effluent data for arsenic are needed. EPA has used a ll available valid data in calculating the effluent limitations established by theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 432 ELGs. Furthermore, in its proposed rule, EPA clearly identified the data that it had collected and used to calculate the proposed limitations. EPA solicited comment on the p roposed rule, providing stakeholders with the opportunity to submit additional data if they chose to do so. In some cases, such as for the chemical precipitation and biological treatment technologies for FGD wastewater, commenters submitted large amounts o f data representing years of treatment system operation. EPA evaluated all of these new effluent data and, as appropriate, included these data in establishing the effluent limitations for the final rule. However, in other cases, such as for gasification wa stewater and for the vapor

- compression evaporation technology for FGD wastewater, EPA received no additional data. EPA notes that the commenter operates an IGCC plant that began commercial operation in June 2013, months before the end of the comment period for the proposed rule. Thus at the same time that the commenter was asserting in comments that EPA should use more data, and was in a position to provide such data to EPA for its own plant, it failed to do so. Thus, in establishing the ELGs, EPA has used all of the data it could accumulate. Had industry or other stakeholders come forward during the comment period and provided EPA with more data, EPA likely would have used it if the data were valid and representative of the BAT technology, as appropriate. S ee Appendix A, Essay Section 4.1.2.
EPA disagrees with the commenter’s assertion that available analytical methods may not be able to consistently measure low enough for plants to demonstrate compliance with the mercury limitation. EPA Method 1631E can mea sure mercury at very low concentrations with a quantitation limit of 0.5 nanogram/liter (ng/L), orders of magnitude lower than the effluent limitation.. As explained in Essay Section 5, EPA considers facilities that are well

- operated and designed can meet the limitations which are based upon data from facilities with the model technology.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 60 External Review Flag: Analytical External Review Incorporated into Response: No
Comment Excerpt:



### 5.10 The daily effluent limitations for arsenic are calculated incorrectly for two wastewaters: chemical precipitation/evaporation for FGD water and vapo r compression/evaporation for gasification.

The limits for arsenic in Table X

- 1 of the proposed Rule should be 5 μg/L, not 4 μg/L; per EPA’s description, the limit is set at the ML of the lab with the highest MDL [EPA, 2013]:

“The maximum ML is derived fr om that maximum MDL value by multiplying standard deviation of the results from that laboratory by 10 and rounding the result to the nearest value of 1, 2, or 5 times 10n, where n is a positive or negative integer.”Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 433 The standard deviation of arsenic analys es for the lab with the highest MDL (Test America) was 0.252 [Test America, 2012]. Multiplying by 10 (2.52) and rounding to the “ nearest value of 1, 2, or 5 times 10n, where n is a positive or negative integer” produces an ML of 5 μg/L. In addition, the st atement in footnote (e) that the 4 μg/L limit is based on the detection limit is not correct

— per EPA’s stated procedure, the limit is intended to be equal to the ML. Due to the rounding procedure described above, there is not a linear relationship between the MDL and the ML.
Comment Response:
EPA disagrees with the commenter’s assertion that the ML for arsenic should be 5 μg/L. The rounding step was included in the procedure to simplify the preparation of analytical standards for instrument calibration by making the ML a whole number. In the specific example cited by the commenter, preparing a standard for arsenic at an ML of 2.52 μg/L would be considerably more difficult that preparing a standard at 1, 2, or 5 μg/L. It appears that the commenter has

m isunderstood the implementation of the rounding step in the ML determination. As described in the ML procedure, a value of 2.52 would round down to 2, since it is less than half way between 2 and 5, which are two of the three incremental values mentioned in the procedure (1, 2, or 5). For example, had the standard deviation been 0.152 instead (as compared to the standard deviation of 0.252 noted in the comment), ten times that value would be 1.52, which would round up to 2. On the other hand, had the stan dard deviation been 0.352 instead (as compared to the standard deviation of 0.252 noted in the comment), ten times that value would be 3.52, which would round up to 5, since 3.52 is greater than half the distance between 2 and 5 (e.g., 3.5). EPA recognizes that the rounding procedure affects the relationship between the MDL and the ML such that it is not strictly linear in every case, but notes that the intent of the rounding is to aid in the preparation of standards, as described above.

EPA removed the footnote (e) from the table because it is not needed and led to confusion.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 121 Exter nal Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
For many regulations, including the proposed Effluent Limitations Guidelines and Standards (hereafter abbreviated “TDD”), the mean is an important statist ic. However in this effort an accurate measure of standard deviation is equally important. The standard deviation is used to compute percentiles and variability factors, both of which determine regulatory limits. Current methods in several places within th e TDD will lead to underestimating the standard deviation, and therefore underestimating the regulatory limits themselves. I have recommended some possible solutions to improve estimates of the standard deviation.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 434 A recurring theme is that methods for deal ing with nondetects in the TDD are inadequate, not availing themselves of knowledge gained over the last 30 years. Substitution of values for nondetects, declaring all nondetects to be detects at the quantitation limit, and similar procedures will produce estimates of mean and standard deviation that are off the mark. References to methods papers on this topic in the TDD stop after Owen and DeRouen (1980). Methods in Helsel (2012) and references therein would improve consistency in TDD methods and the resul ting estimates.
Comment Response:
EPA agrees that the standard deviation, along with the mean, is an important statistical parameter in calculating the limitations. As explained in Appendix A, Essay Section 4.1.1, EPA has corrected its calculation of the autocorrelation adjustment which had underestimated the standard deviations used to calculate the proposed limitations. In response to comments on the proposed rule, EPA also modified its use of the baseline value as explained in Essay Section 3.5. Also s ee Essay Section 3.5 (baseline discussion).
EPA disagrees that its selection of the modified delta

- lognormal distribution is inadequate. See Essay Section 4.1. Contrary to the comment’s assertion, EPA has considered other statistical procedures that can be used to model mixtures of detected and non

- detected measurements. See Essay Section 4.2.

Commenter Name: Erik Silvola Commenter Affiliation: Great River Energy (GRE) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4572

- A1 Comment Excerpt Number: 2 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Proposed Numeric Limits
GRE believes the approach taken to derive the proposed numeric limits results in the calculation of limits that are too low due to an underestimation of the standard deviation of real life discharges. This is an artifact of small data sets collected over a short timeframe. We reference EPRI and UWAG comments.
Comment Response:
As explained in Essay Section 4.1.1, EPA has co rrected its calculation of the autocorrelation adjustment which had underestimated the standard deviations used to calculate the proposed limitations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 435 EPA disagrees that the comment’s assertion that the “limits are too low” for any reason, including the am ount of data used as a basis for the limitations development. As explained in Appendix A, Essay Section 3.2.1.1, EPA has used all of the relevant data made available to it. Essay Section 2.3 and Section 5 describe EPA’s rationale for the percentile basis o f its limitations and achievability of its limitations.

Commenter Name: John W. Myers Commenter Affiliation: Tennessee Valley Authority (TVA) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4607

- A1 Comment Excerpt Number: 12 External Review Flag: No Ext ernal Review External Review Incorporated into Response: No
Comment Excerpt:

b. FGD Limits Established are Too Stringent and Facilities Will Not Be Able to Achieve Consistent Compliance
EPA’s data analysis to derive the proposed numerical limits is stati stically unsound. As pointed out in EPRI comments, EPA elected to utilize a small data set which distorts the proposed limits to the low, more stringent side. In addition, EPA’s use of the median values of plant

- specific long

- term averages will result in 5 0% of facilities exceeding the proposed ELG with potentially serious enforcement and shutdown consequences. As recommended by EPRI, TVA supports a 95th percentile upper confidence level (UCL) statistical approach in deriving numerical limits upon which the performance of alternative treatment methodologies can be evaluated.
Comment Response:
EPA disagrees with the comment’s assertion that its derivation of the limitations is statistically unsound. See Appendix A, Essay Section 4 for EPA’s response to comm ents related to the modified delta

- lognormal distribution.
EPA disagrees with the comment’s assertion that its data set distorts the limitations to the “low, more stringent side.” As explained in Essay Section 3.2.1.1, EPA has used all of the relevant data made available to it. Essay Section 2.3 and Section 5 describe EPA’s rationale for the percentile basis of its limitations and achievability of its limitations.
EPA disagrees that a tolerance limit, or upper confidence level, is appropriate as explained in Essay Section 4.2.1.
EPA disagrees with the comment’s interpretation of the use of the median in deriving the option long

- term average. See Essay Section 2.4.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 436 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Docum ent Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 10 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Effects of EPA’s Data Selection, Data Manipulation and Flawed Statistic al Methods on Calculated ELGs
EPA’s data censoring, data manipulation, and use of inappropriate statistical methods systematically reduced the magnitude of calculated ELGs. The effect was generally consistent across the BAT facilities EPA selected and for the four pollutants (Arsenic, Mercury, Selenium and Nitrate

- Nitrite). In some cases EPA’s data handling and statistical methods reduced variability factors (“VF”), in other cases long

- term averages (“LTA”) were reduced, and in some cases variability factor s and long

- term averages were reduced.
Calculated Facility

- Specific ELGs
To examine the combined effects of EPA’s data analysis steps on the ELG calculations, a separate ELG, in addition to the LTA and VFs, was calculated for each pollutant and BAT facilit y (Tables 9

– 12). Calculations were performed according to the methods described in the TDD (EPA 2013). For arsenic and mercury, separate ELGs were calculated for Hatfield’s Ferry, Keystone and Miami Fort. For nitrate

- nitrite and selenium, separate ELGs were calculated for Allen and Belews Creek. Figures 1

– 4 (below) summarize these results. Results for Monthly Average Limits follow the same pattern as results for Daily Maximum Limits and therefore are not presented graphically.
Figure 1. For arsenic, EPA’s analysis steps systematically reduced the LTA for all three facilities and systematically reduced the VF for Miami Fort (Table 9). Those reductions propagated into reductions of calculated ELGs for Hatfield’s Ferry and Miami Fort. Data were inadequa te for calculating Arsenic VFs for Keystone.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 437 Figure 2. For mercury, EPA’s analysis steps systematically reduced the VFs for all three facilities and systematically reduced the LTAs for Hatfield’s Ferry and Miami Fort (Table 10). Those reductions propag ated into systematic reductions of calculated ELGs for all three facilities.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 438 Figure 3. For nitrate

- nitrite, EPA’s analysis steps systematically reduced the LTA for both facilities and systematically reduced the VF for Belews Creek (Table 11). Those reductions propagated into reductions of calculated ELGs for Belews Creek. Except for the LogNormal case, data were inadequate for calculating Nitrate

- Nitrite VFs for Allen. Data from Belews Creek were inadequate for calculating VFs using the 2

- Stage stat istical method.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 439 Figure 4. For selenium, EPA’s analysis steps systematically reduced the VFs for both facilities and systematically reduced the LTA for Belews Creek (Table 12). Those reductions propagated into systematic reductions of calculated ELGs for both facilities. Data from Allen were inadequate for calculating VFs using the 2

- Stage statistical method.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 440Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 441Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 442 Comment Response:
In producing the table estimates, the comment has used different assumptions than EPA about the effluent data and statist ical methodology. As explained in Appendix A, Essay Section 4.2.3, it is inappropriate to apply survey estimation techniques to effluent data because they were not collected using 2

- stage sampling designs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 443 As explained in Essay Section 4.1.1, EPA has corr ected its calculation of the autocorrelation adjustment which had underestimated the standard deviations used to calculate the proposed limitations.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 11 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
For arsenic, EPA’s data analysis steps had little effect on the calculated Option E LG (Figure 5). This is because the median LTA was the LTA from Miami Fort, and with only 8 samples, the LTA for Miami Fort was not materially affected by EPA’s data handling steps.
For mercury, each of EPA’s selections of data and statistical methods resu lted in reductions in the Option ELGs (Figure 6).

For nitrate

- nitrate, EPA’s selection of data from the EPA Sampling and CWA 308 Sampling only, while ignoring over 100 self

- monitoring samples had an enormous effect on the calculated Option ELGs (Figure 7). The LTA for the 15 available samples from Allen was 1.642 mg/l, and the LTA for the 106 available samples from Belews Creek was 6.006 mg/l (Table 11). In contrast, the LTA for the 8 EPA selected samples from Allen was 0.104 mg/l and the LTA for the 8 EP A selected samples from Belews Creek was 0.115 mg/l. Because the biological treatment Option only included two facilities, the sample median LTA used to calculate the Option ELGs was equivalent to the sample mean LTA.

For selenium, each of EPA’s selection s of data and statistical methods resulted in reductions in the Option ELGs (Figure 8). The reduction in ELGs going from the Delta LogNormal method to the LogNormal method is particularly notable. This is because that change was intended to address the is sue of autocorrelation, and the result of that manipulation should have been to increase the ELGs. Instead, EPA accomplished the opposite.
Figure 5. Effect of EPA’s selections of data and statistical methods on calculated Option ELGs for arsenic.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 444 Figure 6. Effect of EPA’s selections of data and statistical methods on calculated Option ELGs for mercury.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 445 Figure 7. Effect of EPA’s selection of data and statistical methods on calculated Option ELGs for nitrate

- nitrite.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 446 Figure 8. Effect of EPA’s selections of data and statistical methods on calculated Option ELGs for selenium.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 447 Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 448 See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 46558, Excerpt Number 10.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliati on: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 25 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Although the sample median is an appropriate statistic for characterizing the central tendency of a distribution, with a small sample size the sample median contains considerable uncertainty. For the single

- stage chemical precipitation Option (with 3 facilities), there is only a 1

- in

- 4 chance that the sample m inimum and maximum LTAs bracket the true median LTA. For the biological treatment Option (with 2 facilities), there is only a 1

- in

- 2 chance that the two sample LTAs bracket the true median LTA. For the biological treatment Option, those are the same odds a s flipping a coin.
Comment Response:
EPA disagrees with the comment’s interpretation for the long

- term average. As explained in Appendix A, Essay Section 2.2, EPA applies statistical methods as a framework for the development of limitations using all of the relevant data made available to it (see Essay Section 3.2.1.1). Also see Essay Section 2.4 for EPA’s use of the median for the LTA.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- H Q

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 30 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The statistical method EPA used to calculate underlying parameters of the Delta LogNormal distrib ution assumed that samples were collected according to a simple random sampling design. In fact, that clearly was not the case. For arsenic, mercury and nitrate

- nitrate, the data EPA relied on was collected according to a two

- stage sampling design. By trea ting those data as if they came from simple random sampling, EPA under

- estimated the underlying variance. By under

estimating the variance, EPA caused the corresponding variability factors to be biased low.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 449 Comment Response:

The comment is incorrect in s tating that EPA assumes that the data were collected by a simple random sampling design. In addition, the comment is incorrect in stating that the data EPA used were collected according to a two

- stage sampling design. The comment confuses the statistical

m ethods that are appropriate for survey data with those appropriate for effluent data. See Appendix A, Essay Section 4.2.3. EPA describes its statistical methodology in TDD section 13.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 450 31.h.i. Stats NL Stat Method Used

– Comments on Appendix B

Commenter N ame: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 64 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.1 EPA underestimated the standard deviations in its statistical approach to determine long

- term averages, variability factors, and effluent limitations and standards. The underestimated standard deviations further propagate and impact the variability factors and ultimately, the regulatory limits and standards.

Comment Response:
For its calculations of the final limitations, EPA corrected its autocorrelation adjustment which had underestimated the standard deviations used to calculate the proposed limitation. See Essay Section 4.1.1. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 15.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 65 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.2 Use of small data sets leads to underestimation of standard deviation, and hence, underestimation of re gulatory limits.

EPA has relied on small data sets (< 20, and sometimes as few as 4, data points) to compute regulatory limits. The standard deviation, percentiles, and variability factors calculated from small data sets will be lower and less accurate tha n those calculated from larger, more complete data sets (population). Much environmental data, including data collected for ELG standard setting, is skewed and follows a log normal distribution.

Alternative recommendation : Derive a “sample size factor” fro m simulations of a random selection of small samples from the population log normal distribution and multiply the standard deviation of the small sample set by the appropriate sample size factor to obtain a better estimateEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 451 of the population standard deviat ion. Use this population standard deviation to calculate long

term averages, variability factors, and regulatory limits.
As an example: If one considers a log normal distribution with mean of the logs = 0 and standard deviation of the logs = 1, the true s tandard deviation in original units is 2.16. If one randomly selects 100 sets of a small sample size, say 4, from this distribution, a large majority (more than 75%) of the sets will have a standard deviation below the true value of 2.16. The median standa rd deviation of the small data set from the simulation is 1.456 and the sample size factor is 2.16/1.456 = 1.48. Similarly, for a log normal distribution with mean of the logs = 1 and standard deviation of the logs = 1, the true standard deviation in origi nal units is 5.87. A simulation of a random selection of 100 data sets of sample size 4 from this population yields a median standard deviation of the small data set of 3.486, resulting in a sample size factor of 5.87/3.486 = 1.68. Please see Appendix C fo r details of these calculations.
As the sample size increases, the sample size factor decreases, trending towards 1.0. Details of the suggested procedure and the simulation runs are presented in Appendix C. The Appendix also presents computation of sample size factors using the data set (23 data points) for mercury concentrations in FGD wastewater chemical precipitation effluent as an approximation to a “large data set.”
Comment Response:
See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 113

.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 66 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.6 The modified delta

- lognormal (DLOG) distribution used by EPA to compute percentiles for censored data does not give accurate results when non

- detects are present.

The modified delta

- lognormal (DLOG) distribution substit utes detection limits for non

- detects, thus tending to underestimate standard deviations. Using underestimated standard deviations leads, in turn, to underestimating variability factors and regulatory limits.

Alternative recommendation : Consider using alte rnative procedures employed in the survival analysis field for computing percentiles of censored data (some values excluded), especially for small data sets. Kaplan

- Meier is one such procedure.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 452 Comment Response:
EPA disagrees with the commenter’s asserti on that the statistical approach used by EPA (i.e., the modified delta

- lognormal) does not produce accurate results when non

- detects are present, or that it underestimates the standard deviation and variability, and results in overly stringent regulatory l imits. In addition, the commenter fails to describe how EPA should have employed survival analysis to calculate effluent limits, and does not justify why a statistical approach using survival analysis would be appropriate for setting effluent limits using the data for this rule. The record for this rule demonstrates that EPA’s selection of the modified delta

- lognormal statistical approach is reasonable and appropriate; nothing in the commenter’s submission proves to the contrary.
EPA disagrees with the comm enter’s claims in the above excerpt regarding the modified delta

lognormal approach. The commenter provides little explanation for the assertion, but it appears to be based on the commenter’s incorrect assertion regarding how the non

- detects are used in t he modified delta

- lognormal to estimate standard deviations. The modified delta

- lognormal models the detected values and the non

- detected values separately and differently. Specifically, the detected values are modeled using a lognormal distribution and the non

- detected values are modeled using the delta distribution. Contrary to the commenter’s statement, in estimating the standard deviations, the modified delta

- lognormal uses the number of non

- detects to estimate the proportion of non

- detects at each detection limit in the discrete part of the distribution, and the detected values are used to estimate the parameters (including standard deviations) based on the continuous lognormal part of the distribution (see Appendix B of the Technical Development Do cument for the final rulemaking). Because of the separate modeling of the discrete and continuous parts of the modified delta

- lognormal distribution, the presence of non

- detects does not result in an underestimation of the standard deviation as claimed by the commenter. When all observations are detected, the modified delta

- lognormal is equivalent to the lognormal distribution, which is the distribution generally considered to be appropriate for environmental data. 1

Furthermore, the commenter contradicted the claims made in the excerpt above with a comment made in Appendix C of the letter (page C

- 2). In Appendix C (page C

- 2), the commenter stated that “...the maximum likelihood procedure used by DLOG to estimate standa rd deviation is overall unbiased...”. EPA believes that the modified delta lognormal procedure is the most appropriate method for use with the type of data observed in this rulemaking (i.e., a mixture of detected values assumed to follow a lognormal distribu tion and non

- detected values occurring at various fixed detection limits). Since the non

- detects are unquantified observations, it is impossible to test the assumption of how the data are truly distributed. The modified delta

lognormal approach allows fo r these non

- detect observations to be used without having to make presumptions (and possibly introduce bias) about their distribution. Precedents for the valid use of the modified delta lognormal procedure can be found in the rulemakings for Organic Chemic als, Plastics, and Synthetic Fibers (1987) and Pesticides Chemical Manufacturing (1993). The commenter fails to provide sufficient justification for their “alternative recommendation,” namely that EPA “consider using alternative procedures employed in the survival analysis field (with some values excluded),...”. First, the commenter’s suggestion is vague and fails describe how EPA should have employed survival analysis to calculate the effluent limits or identifyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 453 which specific statistical methods from the su rvival field should be used for these data. The field of survival analysis is broad and contains many competing procedures. Moreover, the commenter fails to demonstrate that, presuming a method based on survival analysis were to be used, it would be supe rior to the modified delta

- lognormal method used to calculate effluent limits, or that it would even be appropriate for this purpose. In addition, the commenter does not explain what is meant by the phrase “some values excluded”. EPA uses all available d ata that represent normal operating conditions when calculating the effluent limits. The commenter’s suggestion of using a method with “some values excluded” is not reasonable since data should not be excluded without reason, and this comment is inconsist ent with EPA’s policy using all available data representative of normal operating conditions. Finally, the commenter was specific in the suggestion to use Kaplan

- Meier, which is a non

- parametric method (i.e., does not assume any particular data distributi on) that can be used to estimate percentiles. EPA disagrees with this suggestion because the commenter does not provide any basis for why Kaplan

- Meier should be preferred over the modified delta

- lognormal. Also, EPA believes that the data for this indust ry follow a modified delta

- lognormal distribution, so the use of a non

- parametric procedure, such as Kaplan

- Meier, would be inefficient. EPA selected the modified delta

lognormal method because it provides a reasonably good fit to the wastewater effluent data for this industry. In addition, the use of modified delta

- lognormal with data such as that available for this industry has been supported by the statistical community and EPA for decades (e.g., Owen and DeRouen (1980) 2 , Crow and Shimizu (1988) 3 , Aitc hison (1955) 4 , Kahn and Rubin (1989) 5 ). Also see Appendix A, Essay Section 4.2.2.

1 Richard O. Gilbert, Statistical Methods for Environmental Pollutant Monitoring , Van Nostrand Reinhold, New York, 1987.

2 W.J. Owen and T.A. DeRouen (1980), “Estimation o f the Mean for Lognormal Data Containing Zeroes and Left

- Censored Values, with Applications to the Measurement of Worker Exposure to Air Contaminants,” Biometrics 36: 707

- 719.

3 Edwin L. Crow and Kunio Shimizu (1988), Lognormal Distributions: Theory and Ap plications Marcel Dekker, New York.

4 J. Aitchison (1955). “On the distribution of a positive random variable having a discrete probability mass at the origin.” Journal of the American Statistical Association 50: 901

- 908.

5 H.D.Kahn and M.B. Rubin, “Use of Statistical Methods in Industrial Water Pollutant Control Regulations in the United States, “Environmental Monitoring and Assessment, 12: 129

- 148.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Con trol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 113Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 454 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
1. EPA has used several small data sets (n<20, sometimes even n=4) for computi ng regulatory limits. The range and variability of small subsets will often be lower than a more representative sampling of a skewed population. With skewed data, high infrequent observations are often not included when only a few values are measured. Resu lting estimates of standard deviation, percentiles and variability factors from these small data sets will be lower and less accurate than if computed from larger, more complete data sets from the same sources. Even though the maximum likelihood procedure used by DLOG to estimate standard deviations is overall unbiased, the distribution of those estimates will still be skewed. This means that more of them will be lower than the true standard deviation, with fewer higher than the true value, though sometimes much higher. When data from only a few plants are collected, the estimate of standard deviation is more likely to be closer to the median of the true distribution of standard deviations than an unbiased mean value. To make this more clear, I simulated da ta using lognormal distributions with mean of the logs = 0 and 1, within the range of skewed distributions typical for environmental science. The standard deviation of the logs equals 1 for both distributions. For lognormal distributions, the standard de viation in original units changes with the mean logarithm. With mean log=0 the standard deviation of the distribution, the ‘true standard deviation’ in original units is 2.16. With mean log=1 the true standard deviation in original units is 5.87. These val ues for standard deviation are the correct targets for estimates. For 100 sets of sample size 4 from these two distributions, a plot of the estimated standard deviations using maximum likelihood (the method used by DLOG) is shown in the histograms below. M ore than 50% of the estimates in each case are below the true standard deviation.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 455 When small samples are taken from skewed data as the TDD data are, the single estimate of standard deviation will more often than not underestimate the standard deviation o f the data as a whole.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 456 The primary impact of underestimating the standard deviation in the TDD is that the variability factor will likely be too low, and so the regulatory limit will be too low as compared to what would be calculated with a sample size t hat was more representative of the population of daily values.

Alternative recommendation : collect or find additional data. I realize this is always the statistician’s mantra, but is the best remedy. The median will be much closer to the true value as sample sizes get larger. A second possible solution is to use a larger data set from one of the categories of measured data. Compute the mean and standard deviation of the logarithms for this data set as a guide. Simulate 100 sets of differing sample sizes from a lognormal distribution with this mean and standard deviation. Compute the median standard deviation of the resulting small data sets, and divide it into the standard deviation of the original distribution, original/median, to form a ‘sample size fa ctor’. The standard deviation as currently computed should be multiplied by the appropriate sample size factor before computing percentiles and variability factors. This will be an attempt with existing data to overcome the difficulty of estimating a true standard deviation with small data sets.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 457 I’ll illustrate the process with the above two distributions. If the ‘large’ data set of measurements had a mean logarithm of 0, the sample size factor for an n=4 data set (the true mean of 2.16 divided by the media n of the simulated standard deviations) is 2.16/1.456 = 1.48. For a mean logarithm=1 distribution in Figure 2, the sample size factor equals 5.87/3.486 = 1.68. From this it appears that if the actual monitoring data have distributions in this range of shap es, the standard deviations estimated from a sample size of 4 should be multiplied by approximately 1.5 before being used in further calculations. As sample sizes increase, the sample size factor will decrease towards 1. For data that are less skewed, the sample size factors will be smaller. I’ve provided an additional example computation using the mercury data for FGD chemical precipitation effluent as the ‘large data set’ in the appendix to this memo.
Appendix
Computing the Sample Size Factor from existing data

– an example

Included in the data set “ELG data EPA

- HQ

- OW

- 2009

- 0819

- 1965.xlsx” are 23 mercury concentrations for FGD chemical precipitation effluent. Using these as the ‘large data set’ representing the population of mercury concentrations fo r this sample type, the method to compute a sample size factor described in comment 1 in the September 6, 2013 memo from Practical Stats is illustrated below.
a. The chemical precipitation effluent concentrations of mercury (in ng/L) have the following des criptive statistics:

Mean Standard Deviation Median Final concentration 103.2 75.4 82.5 logarithms 4.385

- -
These values are lower than for the two distributions used in the main body of the memo, which means that the Sample Size Factor will be lower as well for a given sample size. Twenty

- three observations is near the minimum to be called a ‘large’ data set.
b. Using a population of data with meanlog = 4.385 and sdlog = 0.737, Minitab statistical software was used to randomly select 100 sets of samp les of size 4, 8, and 20 from this population. Figure A1 below shows the histogram of 100 standard deviations produced for the sample size of 8. The ‘true’ standard deviation in units of concentration for a lognormal distribution with the above parameters in natural log units is found using the formula
sdtrue=exp(meanlog+(0.5*sdlog**2))*sqrt(exp(sdlog**2)

- 1)
which here equals 89.42. Note that for a lognormal distribution the standard deviation in original concentration units is a function of both the mean a nd standard deviation of the logarithms. The median standard deviation of sampled data for the 100 replicates of each sample size is given below:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 458 Sample size median of estimated standard deviations n=4 51.67 n=8 70.88 n=20 72.26

c. The population (true) standard deviation is divided by the median estimated standard deviation for each sample size. The ratio is given below as the Sample Size Factor, to be multiplied by the estimated standard deviation for data sets of the specified sample size prior to computing percentiles and variability factors.

Sample size Sample Size Factor n=4 89.42/51.67 = 1.73 n=8 89.42/70.88 = 1.26 n=20 89.42/72.26 = 1.24Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 459 For computing percentiles and variability factors for FGD chemical precipitation effluent mercury data of sample size 8, say for other plants or times, the standard deviation computed from those 8 observations should first be multiplied by 1.26 (to come closer to what the true standard deviation is expected to be if there were a larger sample size) and the result used as the standard deviation to estimate a 99th percentile and other statistics of the distribution.
Comment Response:
EPA does not agree that the use of a small dataset would necessarily lead to an underestimation of regulatory limits. In addition, it is important to note that EPA has used all available valid data in calculating the effluent limitations established by the ELGs. Furthermore, in its proposed rule, EPA clearly identified the data that it had collected and used to calculate the proposed limitations. EPA solicited comment on the proposed rule, providing stakeholders with the opportunity to submit additional data if they chose to do so. In some cases, such as for the chemical precipitation and biological treatment technologies for FGD wastewater, commenters submitted large amounts of data representing years of treatment system operation. EPA evaluated all of these effluent data submitted in comments and, as appropriate, included these data in establishing the effluent limitations f or the final rule. However, in other cases, such as for gasification wastewater and for the vapor

- compression evaporation technology for FGD wastewater, EPA received no additional data. Thus, in establishing the ELGs, EPA has used all of the data it could accumulate. Had industry or other stakeholders come forward and provided EPA with more data, EPA would have used it if it were valid and representative of the BAT technology, as appropriate.
EPA has historical precedence of employing limited data sets when larger data sets are not available; a precedence that has been upheld in previous court cases as referenced in the essay section. See Appendix A, Essay Section 3.2.1.1 and Essay Section 4.1.2. EPA disagrees with the suggestion of using a “sample size fact or.” A sample size factor is not necessary because EPA has adequate data and any sample size adjustment would introduce uncertainty into the calculation of the effluent limitations. There is no indication that the suggested sample size factor will perform consistently for all estimated parameters. The alternative method considers ONLY the standard deviation, while EPA’s approach to calculating limits estimates of many parameters. The comment attributes skewness as one of the motivating factors requiring sa mple size adjustment, but there is no analysis of how skewed the data must be or if the adjustment again performs consistently over a wide variety of possible skewed data. The alternative method simulates data as a means of analysis; however, the analysis is incomplete, the results are questionable, and the comment certainly does not provide enough evidence to support abandoning EPA’s current and longstanding methodology. See Essay Section 4.1.2.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 126Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 460 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
6. The method for adjustment of th e variability factor using a serial correlation coefficient is not given in either the TDD, its Appendices, nor the April 15, 2012 memorandum “Serial correlations for Steam Electric with and without adjustment for baseline values [EP

- C

- 10

- 023 WA 2

- 6 (Steam Electric)]”. Data were available to compute a correction for serial correlation of daily data for only two chemicals. For selenium and nitrate

- N, the lag

- 1 serial correlation of rho=0.291 means from my calculation [see below] that the uncorrected standard deviation should have been multiplied by approx. 1.35. The April 15 memo on serial correlation goes into detail on how the correlation coefficient rho was calculated, but nowhere states how rho was used to adjust the computation for percentiles and variab ility factors.
While the computation of the autocorrelation coefficient used a censored data procedure such as those cited in Helsel (2012) to incorporate detects and nondetects into the calculation, Appendix B, Section B.6 states that when computing long

- term averages and variability factors, all nondetects are simply set to the quantitation limit and called detected values. This is very inappropriate. No explanation is given as to why this was done here at this point, while much better methods are used wh en computing the correlation coefficients themselves. The ‘declaring nondetects to be detects’ method will underestimate the variability in the data, therefore biasing low the variability factor used to set limitations. A sure indication that something is wrong would be if the estimate of variability after correction for autocorrelation were found to be lower than before. Correction for autocorrelation will increase estimates of variability, recognizing that the numbers of independent observations are fewer than the numbers of samples taken. The issue is not that autocorrelation should not be corrected for, but that the process used for handling nondetects is improper and biased.

Alternative Recommendation : 1) provide more detail in a memo available to all i nterested parties on how this correction was actually accomplished. 2) consistently use reliable, industry

- standard methods for handling nondetects, rather than either substitution of an arbitrary number, or declaring nondetects to be detects at the quanti tation limit.
An adjustment for lag

- 1 serial correlation was provided by Matalas and Langbein in 1962:
StdDev_corrected = sqrt(FACTOR)*StdDev

FACTOR = { (1 + r)/(1

- r)

- (2/N)*r*(1

- rN)/(1

- r)2}
where r is the lag

- 1 serial correlation coefficient. Often the Factor equation is simplified and truncated as the latter portion is close to 0 for reasonable sample sizes, resulting in:

FACTOR = (1 + r)/(1

- r)
For an r of 0.291, the sqrt[FACTOR] using the simpler formula = 1.35Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 461 This 35% increase for the only two che micals with sufficient data so far to calculate this effect indicates that this correction may also be important for other chemicals. A return to this issue in the not

- distant future, after more monitoring data becomes available for the other chemicals, is important to determine if a serial

- correlation correction factor can be computed for chemicals in addition to the two now being utilized.
Comment Response:
As explained in Appendix A, Essay Section 4.1.1, EPA corrected its autocorrelation equations used to calculate the final limitations. Given this change, EPA does not agree that any other changes need to be made to the calculation procedures.
The comment is incorrect in stating that the procedures were not documented for the proposed rule. The method f

or adjustment of the variability factor using a serial correlation coefficient is given in Appendix B of the proposed and final TDD.
The adjustment factor suggested in the comment applies to random data. As explained in Essay Section 4.2.3, the effluent da ta are not randomly selected, and thus, the adjustments does not apply to the calculations of the limitations.
EPA has used “industry

- standard methods for handling nondetects” as recommended by the comment. See Essay Section 4.1 that describes EPA’s reason s for selecting the modified delta

lognormal distribution.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 127 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

7. The modified delta

- lognormal (DLOG) distribution is being used to compute percentiles for censored data. Developed in 1955, DLOG has been abandoned in scientific studi es in favor of others over the last 30 years. Hinton (1993) showed that the modified DLOG mean is strongly biased upward, more so than several other alternate methods, when nondetects are present. Gilliom and Helsel (1986) found that the standard deviation estimated by DLOG is less accurate than alternate methods. Helsel and Cohn [1988] demonstrated that substituting the detection limit for nondetects, as done by the modified DLOG procedure used in the TDD, underestimates the standard deviation. This is not surprising, as the same number is substituted for all nondetects, reducing variability. The results are 95th and 99th percentiles that are too low, and so a variability factor that is too low. Since the direction of bias of the mean is the opposite of the direction of bias in the standard deviation, it is impossible to predict whether using a betterEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 462 alternative to DLOG will increase or decrease the eventual effluent limitation as compared to the correct method. However, it is clear that better computation methods than DLOG are available.

Alternative Recommendation : WESTAT cited better methods from survival analysis in computing serial correlation estimates for data that include nondetects. Their April 15 memo on serial correlation (EPA

- HQ

- OW

- 2009

- 0819

- 1963. pdf) states that using survival analysis procedures “provides better estimates of the serial correlation for the concentration series than when using the ARIMA model with substitute values for the non

- detects.” DLOG as used in the TDD similarly substitutes the detection limit value for all nondetects. Percentiles and so variability factors can be computed using the better methods cited by WESTAT, rather than using DLOG, resulting in estimates that are less controversial whether that be lower and higher than computed now. Examples of survival analysis procedures for computing percentiles of censored data include the Kaplan

- Meier estimator and Maximum Likelihood. See Helsel (2012) for details.
Comment Response:
EPA disagrees with the commenter’s assertion th at the modified delta

- lognormal has been abandoned in scientific studies in favor of others in the last 30 years since EPA finds that this assertion is unfounded. EPA has found that a number of researchers have used or investigated the delta

- lognormal dis tribution over the last 20 years, even as recently as 2013. Further, the commenter stated that the modified delta

- lognormal produces biased estimates of the mean and standard deviation, low limits and variability factors, and the commenter references seve ral articles and books to support the criticisms. EPA has reviewed all the commenter’s references and found that none of these references support the commenter’s assertions. Moreover, the commenter suggests an “Alternative Recommendation” to calculate th e effluent limits; however, the commenter fails to provide sufficient justification for why the alternative method is better than the modified delta

- lognormal. The record for this rule demonstrates that EPA’s selection of the modified delta

- lognormal stati stical approach is reasonable and appropriate; nothing in the commenter’s submission proves to the contrary.
First, EPA disagrees with the commenter’s claim in the excerpt above that the modified delta

lognormal has been abandoned in scientific studies in favor of others over the last 30 years. The modified delta

- lognormal is a minor, direct extension of the delta

- lognormal method to incorporate multiple detection limits rather than a single detection limit. A literature search has revealed that a number of researchers have used or investigated the delta

- lognormal distribution over the last 20 years, for example, see the articles by Lo, Jacobson, and Squire (1992), Buntao and Niwitpong (2013), Fletcher (2008), and Walter and Ortiz (2012), along with the references therein. Based on this, it is clear that the delta

- lognormal has not been abandoned and is still found to be useful for modeling in applications that involve data exhibiting both discrete and continuous parts. Thus, the commenter’s statement i s unfounded.

Second, the commenter stated that the modified delta

- lognormal procedure produces biased estimates of the mean and standard deviation, low limits and variability factors, and the commenter references several articles to support the criticisms (Hinton (1993), Gilliom and Helsel (1986), and Helsel and Cohn (1988)). EPA has reviewed each of the references aboveEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 463 and disagrees that these references support the assertions for the reasons described below. The commenter states that Hinton (1993) shows that the modified delta

- lognormal method gives estimates of the mean that are biased upward (i.e., estimates that tend to be too large). Hinton (1993) is a journal article that compares the performance of three statistical methods used in estimating the mean: modified delta

- lognormal model, Cohen’s method, and regression of normal order scores. The author’s simulation is based on sample sizes between 10 and 20, and censoring levels between 5% and 80%. In these simulation studies, data were generated fro m lognormal distributions. These simulation studies showed that modified delta

- lognormal performed well when the percent of censoring was less than 40%, but the competing methods had better performance when the percent of censoring was greater than 40%. T his reference, however, does not properly evaluate the performance of the modified delta

- lognormal in setting limits for this rulemaking for the following two reasons: (i) The simulated data was based on lognormal with a mean of 2 and coefficients of variation (CV) with values of 0.3 and 1. The commenter fails to explain the relevance of using these values for the mean and CVs to the data used to develop the effluent limitations for the ELGs; and (ii) The commente r fails to justify the logic in using data generated by a lognormal distribution to criticize limitations that were derived from data generated from a different distribution (i.e., modified delta

- lognormal). In other words, the simulated data was drawn fr om a lognormal distribution, which is different from the EPA’s assumption that the data were generated from the modified delta

- lognormal

. This difference in the essential nature of the underlying data in the comment is critical because it inappropriately tips the results in favor of the position advocated in the comment. Further, it has been shown that the delta

- lognormal procedure (a simplified version of the modified delta lognormal) produced a better estimator than censored lognormal (e.g., Cohen’s met hod) when the underlying distribution of the data is delta

- lognormal, rather than lognormal (see Owen and DeRouen (1980)). When all observations are detected, the modified delta

- lognormal distribution is equivalent to Cohen’s maximum likelihood estimation presented in the paper and both methods are equivalent to the lognormal distribution.
The commenter stated that simulation studies reported in Gilliom and Helsel (1986) and Helsel and Cohn (1988) show that the modified delta

- lognormal based on substituting detection limits for non

- detects result in underestimated standard deviations, leading to percentiles and variability factors that are too low. However, the commenter also states that it is not clear whether the modified delta

- lognormal procedure results in limits that are higher or lower than competing methods. EPA has reviewed the simulation studies of Gilliom and Helsel (1986) and Helsel and Cohn (1988) and finds that neither article actually evaluated the modified delta

- lognormal procedure

. Instead, both articles considered simplistic substitution approaches that replace a

non

- detect with zero, half the detection limit, or the detection limit. Thus, the commenter assertion is unfounded and the commenter has no basis in concluding that the modified delta

lognormal underestimated standard deviations resulting in low limits and variability factors. The modified delta

- lognormal procedure is a sophisticated and appropriate method for dealing with

non

- detects, and it has been shown to work well when the data come from a delta lognormal distribution (see Owen and DeRouen (1980)).
The commenter also briefly suggests that EPA should consult “Helsel (2012) for details”. Helsel (2012) is a book that covers many aspects of the analysis of censored environmenta l data. However, the commenter’s reference to Helsel’s book is not specific and does not point toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 464 exactly which of the methods discussed in the book that the commenter would recommend. The commenter’s suggestion is too vague and too broad for EPA to inte rpret.
Finally, the commenter fails to provide sufficient justification for their “Alternative Recommendation”, in which the commenter cited a memo from Westat in which an approach was developed specifically for the estimation of serial correlations. The serial correlations needed to be estimated in order to investigate the effect that the correlation may have on the calculated limits. The commenter states that the Westat memo “cited better methods from survival analysis in computing serial correlation es timates for data that include nondetects”. However, the Westat approach was not simply an application of a standard survival analysis procedure. Instead, the Westat approach is a complicated ad hoc procedure that combines survival analysis with a Bayesia n approach, simulations, and an ARIMA model. The commenter states that the “better methods cited by Westat” should also be used by EPA to compute percentiles and variability factors. The commenter further states that such an approach would result in “est imates that are less controversial” than estimates produced using the modified delta

- lognormal procedure. EPA disagrees with this assertion. The approach used by Westat was developed specifically for the estimation of serial correlations and was not inte nded for the estimation of other quantities, such as percentiles or variability factors. The commenter does not explain how Westat’s method could be further adapted for the estimation of percentiles and variability factors or whether such an adaptation wo uld produce estimates of sufficient quality for use in the setting of effluent limits for this rule. The commenter has not presented any evidence that the method used by Westat would result in estimates of percentiles or variability factors that are unifo rmly better or superior to the estimates obtained from the modified delta

lognormal procedure.
Also, as part of the commenter’s “Alternative Recommendation”, the commenter further stated that EPA should consider using survival analysis procedures, such as Kaplan

- Meier and Maximum Likelihood, for computing percentiles of censored data. The commenter fails to demonstrate why these survival analysis methods should be preferred over the modified delta

lognormal. EPA found that the data for this industry follo w a modified delta

- lognormal distribution, so the use of a non

- parametric procedure such as Kaplan

- Meier, would be inefficient, especially in data sets with a small sample size. Regarding the suggestion of the use of maximum likelihood, in a peer reviewed journal, Owen and DeRouen compared the estimators obtained using the delta distribution and a censored lognormal approach (based on maximum likelihood) and found that the estimator for the delta

- lognormal “generally has a smaller mean squared error than t he censored lognormal estimator...”. Since the modified delta

lognormal is a minor direct extension of the delta lognormal, EPA believes that it is evidence that the modified delta

- lognormal method is to be preferred over a maximum likelihood approach for t he type of data available for this rulemaking. Thus, EPA maintains that the modified delta

- lognormal is the most appropriate method for calculating the limits in this rulemaking. See Appendix A, Essay Section 4.1 and 4.2.2.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 465 Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 15 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

EPA’s Statistical Methods for Calculating ELGs
A. Flawed Estimation of Underlying Parameters

where x i is the reported concentration and n c is the number of samples above the reporting limits.
These equations are appropriate for estimating the mean and variance when samples are collected according to a simple random sampling design in which each day of the year has an equal probability of being selected for sampling (Cochran 1977). The paper by Kahn and Rubin (1989) appropriately used these equations with three examples of census

- like data. In the Kahn and Rubin paper, each example (Table 2 and Figures 2

- 4 in Kahn and Rubin 1989) was for almost a full year of data with a measurement taken on almost every day of the year (i.e., n=363, n=353, n=336).
The sampling designs used to collect FGD effluent data at the six facilities were not simple random sampling designs. The EPA sampling design included four samples collected in one month, and one sample collected in each of four other months. For several facilities, th e self

monitoring data were also collected in manner not consistent with simple random sampling. A disproportionate number of self

- monitoring samples from Belews Creek were collected in theEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 466 first year of operation of the bioreactor treatment system. For Al len, most samples were collected during winter months.
EPA’s method for estimating the mean and variance give equal weight to each sample. If a disproportionate number of samples were collected in a single month or season, the mean and average computed usi ng EPA’s method will be biased towards the conditions of that month or season and will not be representative of the entire year, as required by the theory underlying the method. Statistical methods referred to as design

- based methods have been developed t o address this type of situation (e.g., Cochran 1977) and can be applied here.
The pattern of sampling of effluent samples resembles two

- stage sampling with the primary sampling unit being month and the secondary sampling unit being day within month. For t wo

stage sampling, a subset of months would be selected by simple random sampling, and within each selected month several days would be selected by simple random sampling. Although the dates of effluent sampling likely were not selected in strictly this ma nner, the pattern of effluent sampling more closely resembles two

- stage sampling than simple random sampling of all days within the year. Accordingly, design

- based statistical methods for estimating means and variances from two

- stage sampling are more appr opriate for analyzing the effluent data from the seven facilities. Formulae for estimation with two

- stage sampling are presented in Appendix A.
Appendix B, page 44.

The 2

- stage estimates for the daily mean and variance were calculated using the following equations (Cochran 1977). The annual mean was estimated as:

The annual variance was estimated as:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 467 Comment Response:
In producing the table estimates, the comment has used different assumptions than EPA about the effluent data and statistical metho dology. As explained in Appendix A, Essay Section 4.2.3, it is inappropriate to apply survey estimation techniques to effluent data because they were not collected using random and 2

- stage designs, as even the commenter noted.
EPA disagrees with the comme nt’s assertion that EPA’s method will be biased towards the conditions of the months or seasons when the data were collected. See Essay Section 3.2.1.2.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 468 31.h.ii. Calculation of the Serial Correlation (Autocorrelation)

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 134 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.5 Additional information is needed to use the correlation coefficient to adjust the variability factor.

It is good to note that EPA considered the impact of serial correlation in adjusting the variability factors. However, the steps EPA appears to have taken to address this are inappropriate. Also, while the April 15, 2013, memorandum [EPA, 2013] goes into great detail about how the lag

- 1 serial correlation coefficient (rho) was calculated, there is no indication in that memo or elsewhere in the TDD of how to use the correlation coefficient to adjust the variability factor.
Based on the lag

- 1 serial correlation coefficient of 0.291 provided for two chemicals (selenium and nitrate

- N), we calculate an adjustment factor of 1.35. The uncorrected standard deviation should be multiplied by this factor to account for serial correlation. Details of our calculations are in Appendix C. It appears that EPA’s correction for serial correlation may go in the wrong direction due to its treatment of non

- detects. Appendix C sug gests an alternative approach for incorporating non

- detects, using survival analysis procedures, which will alleviate this problem.
Given the magnitude of the adjustment factor for the two chemicals, the impact of serial correlation on variability factors for other chemicals could be significant. It would be useful if EPA could provide more details on how the serial correlation correction was applied.
Comment Response:
EPA’s calculation of correlation and how it is used in calculating effluent limitations are described in TDD Section 13 Appendix B and DCN SE06279. As explained in Essay Section 4.1.1, EPA has corrected its calculation of the correlation adjustment which had underestimated the standard deviations used to calculate the proposed limitations. E PA does not agree that any other changes need to be made to the calculation procedures.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 8Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 469 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
As noted by EPA, if a positive autocorrelation is present in the data then estimates of the variance computed using standard methods will be biase d low. Therefore, EPA’s method, as described in the 2013 TDD and supporting documents (e.g., EPA 2012), includes a correction factor (also referred to as a variance inflation factor) for correcting biased variance estimates. EPA’s correction factor assumes sample observations follow the pattern of a first order autoregressive process. The application of EPA’s variance inflation factor is appropriate when: 1) observations are positively autocorrelated, and 2) samples were collected over sequential days (e.g. , 40 CFR Ch 1, Subpart C, Part 75, Subpart E, section 75.41).
Comment Response:
EPA’s methodology for autocorrelation is appropriate when samples whether or not they are from sequential days, regardless of the sign of the correlation. Unlike the equation s used by EPA for the limitations, the equations referenced in the comment (i.e., 40 CFR Ch 1, Subpart C, Part 75, Subpart E, section 75.41) are appropriate only when the samples are collected over sequential days but not when there are gaps in the sample collection days. Contrary to what is stated in the comment, the equations referenced in the comment are appropriate for data if the correlation is less than zero.
EPA has corrected its autocorrelation adjustment for the final rule. See Appendix A, Essay Se ction 4.1.1.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 16 External Review Flag: No External Review External Review Incorporated i nto Response: No
Comment Excerpt:
The second requirement for applying a variance inflation factor (i.e., data from of sampling on successive days) was not met by the Selenium datasets for biological treatment. In fact, the 63 observations from Allen were collected over 20 months and the 77 observations from Belews Creek were collected over 33 months. Furthermore, the magnitude of the correction factor (which is a multiplicative factor) quickly approaches 1 as the number of days sampled increases (see Appe ndix B).
Appendix B page 46Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 470 When observations are autocorrelated, the estimated variance from a sample of sequential observations can be biased low. This is because the effective sample size in a sequential sample of autocorrelated observations is lower t han the number of samples collected. In this case, a correction factor can be used to eliminate the bias (Zieba, 2010).
The correction factor is derived by recognizing that the sample (method of moments) estimate of the variance has two components

– the u nderlying variance of individual observations and the variance of the mean of observations (Zieba, 2010):

In general, the variance of a mean is defined in terms of the elements of the variance

- covariance (dispersion) matrix (Kendall and Stuart, 1977):

For uncorrelated observations, the all covariance terms are equal to zero and variance of the mean is:

which leads to the standard unbiased estimator for the variance (Cochran, 1977):

However, for autocorrelated observations, the covariance terms are non

- zero and must be included in the variance of the mean:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 471 is the effective sample size.
The correction factor is the ratio of the expected value of the sample variance with uncorrelated observations to the expected value of the sample variance with autocorrelated observations:

To correct for bias due to serial autocorrelation, the unbiased estimator for the variance is multiplied by the adjustment factor (Zieba, 2010):

From equations (6) and (8), it follows that in a sequential sample of autocorr elated observations the effective sample size is:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 472Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 473 Comment Response:
EPA has corrected its autocorrelation adjustment for the final rule. See Appendix A, Essay Section 4.1.1.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Aff

iliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 20 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA attempted to estimate autocorrelation coeffici ents for selenium data collected at Allen and Belews Creek facilities (Westat 2013). For use in calculating the ELG for selenium, EPA calculated the autocorrelation coefficients using baseline substitutions (i.e., 5 ug/l for selenium). The data from Allen included 63 observations, of which 59 were either below detection or set toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 474 the baseline value of 5 ug/l leaving only 4 actual measurements. The data from Belews Creek included 77 observations, of which 51 were either below detection or set to the baseline value. With only 4 actual measurements from Allen, EPA calculated an autocorrelation coefficient of 0.6815. For Belews Creek, EPA calculated a negative autocorrelation coefficient (

- 0.0997).
Comment Response:
EPA has corrected its autocorrelation adjust ment for the final rule. See Appendix A, Essay Section 4.1.1.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA did not discuss what types of underlying processes would have generated a negative autocorrelation for one facility and a positive autocorrelation for the other facil ity. However, EPA accepted both estimates as valid and then averaged the two, claiming an autocorrelation coefficient of 0.291 for all facilities with chemical precipitation followed by biological treatment. Furthermore, EPA used that same autocorrelation coefficient for nitrate

- nitrite.
Comment Response:
EPA has corrected its calculation of the autocorrelation adjustment for the final rule. See Appendix A, Essay Section 4.1.1.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 23 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Because the estimated autocorrelation coefficie nt is unreliable, the data were not collected on successive days, and the number of days sampled is large, application of an autocorrelation correction factor is not warranted for calculating the ELGs for selenium and nitrate

- nitrite.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 475 Comment Response:

E PA disagrees with the comment’s assertion that the autocorrelation adjustment is not warranted for the selenium and nitrate

- nitrite data for the biological treatment technology for FGD wastewater. See Appendix A, Essay Section 4.1.1.

Commenter Name: Eli zabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 24 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Remarkably, EPA’s variability factors and ELGs for selenium, which EPA claims include its autocorrelation correction factor, are lower than the corresponding variability factors and ELGs without the correction factor. The reason is two

- fold. First, for ca lculating the ELGs for selenium, EPA abandoned the use of the Delta LogNormal distribution and treated all observations (the vast majority of which were below detection or artificially set to the baseline value) as if they were from a LogNormal distributio n (i.e., all above the detection limit). With 110 of 140 observations set to constant values and treated as if above the detection limit, the calculated variability factors were reduced (see Table 12). Second, due to the number of days included in the data set the (multiplicative) correction factor would have been very close to 1.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 476 Comment Response:
EPA has corrected its autocorrelation calculations for the final rule. See Appendix A, Essay Section 4.1.1.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 31 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s application of a correction for autocorrelated data was not statistically warranted and used a highly uncertain estimate of the autocorrelation coefficient. However, the magnitude of the correction was relatively small and did not increase the estimated ELGs materially.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 477 Wh at is notable is that EPA used its claim that an autocorrelation correction was needed as an excuse to change its ELG statistical methodology. EPA abandoned the Delta LogNormal model and treated the selenium and nitrate

- nitrate data using a LogNormal model . In doing so EPA assumed all observations

- including those below detection and those EPA set to baseline values

– as if they were above the detection limit. This change in methodology caused the ELGs for selenium to decrease.
The purpose of applying a co rrection for positive autocorrelation is to correct a negative bias in the estimated variance. Therefore, the correction factor is intended to increase the variance estimate which would cause the ELG to increase . EPA’s concocted method had just the opposit e effect.
Comment Response:
EPA has corrected its calculation of the autocorrelation for the final rule. See Appendix A, Essay Section 4.1.1.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 478 31.k. Stats NL

– Engineering Review of Limitations for FGD Wastewater

Commenter Name: Chris M. Hobson Comment er Affiliation: Southern Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment Excerpt Number: 84 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The resulting magnitude of the bi as in EPA’s calculated limits for FGD effluent is so large that the proposed limits are invalid for their intended purpose. The daily maximum limit is intended to be the 99th percentile of daily concentrations from a plant operating with a BAT treatment sy stem, and the monthly average limit is intended to be the 95th percentile of monthly average concentrations. Accordingly, 1% of daily concentrations would be expected to exceed the daily maximum limit and 5% of monthly average concentrations would be expec ted to exceed the monthly average limit. Historical data from the plants EPA identified as operating BAT treatment systems (or systems that exceed BAT treatment) demonstrate that EPA’s proposed ELGs are invalid.
Table 19 provides a summary of the historical frequency of exceedances analysis for the plants EPA identified as operating with BAT or better treatment systems. Historical frequencies of exceedance of EPA’s proposed daily maximum limits (DML) range from 0% to 52% and average 20.1% (20 times higher than intended). Historical frequencies of exceedance of EPA’s proposed monthly average limits (MAL) range from 0% to 100% and average 41.5% (over 8 times higher than intended). With the exception of selenium at Allen, all cases of 0% exceedance

wer e based on data from less than one year.
Table 19: Historical Exceedance Rates At Proposed Model Plants for EPA’s Proposed ELGs

Analyte Plant Daily Average Concentration DML

Percentage of Exceedances Monthly

Average Concentration MAL

Percentage of Exc eedances Arsenic (μg/L) Hatfield’s 9.129 52.0% 9.081 96.4% Arsenic (μg/L) Keystone 4.013 0% 4.025 0% Arsenic (μg/L) Miami Fort 4.575 0% 4.800 0% Arsenic (μg/L) Pleasant

Prairie 6.150 0% 5.350 0%

Mercury (ng/L) Hatfield’s 158.333 11.7% 160.669 29.2% Mercury (ng/L) Keystone 63.150 0% 84.700 0% Mercury (ng/L) Miami Fort 196.923 36.7% 121.960 100.0%Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 479 Mercury (ng/L) Pleasant

Prairie 279.361 41.2% 299.661 88.9%

Nitrate/nitrite

- N Allen 4.722 46.7% 5.054 50.0% Nitrate/nitrite

- N Belews Creek 4.361 39.6% 11.931 62.5%

Selenium (μg/L) Allen 5.530 0% 6.147 0% Selenium (μg/L) Belews Creek 12.701 13.3% 12.136 71.4%

Average: 20.1% 41.5%

The exceedance rate for the proposed arsenic limit at Hatfield’s Ferry is 96.4%. The exceedance rates for the proposed mercury limit at Hatfield’s Ferry and Miami Fort are 29.2% and 100%, respectively. Pleasant Prairie, which has a two

- staged chemical precipitation treatment system, has an ex ceedance rate of 88.9%. According to EPA, Pleasant Prairie was not used to set ELG limits because its treatment system is more advanced than one

- stage chemical precipitation treatment system proposed as BAT.
The exceedance rates for the proposed nitrate/ni trite

- N limits at Allen and Belews Creek are 50% and 62.5%, respectively. The exceedance rate for selenium at Belews Creek is 71.4% at Belews Creek. But these plants are the same plants and same data that EPA used to set the proposed limits. The exceedance frequency analysis demonstrates that EPA’s proposed limits for chemical precipitation treatment and for biological treatment are flawed.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis for limitations as explained in Essay Section 2. EPA disagrees with the assertion that the “historical” frequencies of exceedance then can be compared to the “intended” probabilities of exceedance. Facilities were not required to comply with the limitations prior to the rule , and thus, comparing historical to post

- rule performance is not appropriate. EPA has promulgated limitations that well

- operated, maintained and designed facilities are capable of achieving. See Essay Section 4.1.3 and Essay Section 5.2. EPA revised the BA T effluent limitations for FGD wastewater subsequent to proposal, based on an expanded dataset that includes data EPA obtained following proposal. See DCN SE05733 for EPA’s evaluation of the effluent limitations and the data used to calculate the limitatio ns.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 7 External Review Flag: No External Review External Review Incorporated into Res ponse: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 480 Comment Excerpt:
A number of the selenium and mercury measurements in the EPA data sets used for determining BAT are above both the daily and monthly numeric limits.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excer pt Number 84.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 52 External Review Flag: No External Review External Review Incorporat ed into Response: No
Comment Excerpt:

5.1 The proposed limits for selenium, arsenic, and mercury in FGD wastewater may not be achievable for all power plants employing the proposed BAT.
A review of Belews Creek long

- term effluent data for selenium (Figure 5

- 1) shows instances where effluent concentrations exceeded proposed limitations [EPA, 2009]. In its memo dated October 12, 2012 entitled Effluent Limitations for FGD Wastewater, Gasification Wastewater, and Combustion Residual Leachate for the Pro posed Effluent Limitations Guidelines and Standards for the Steam Electric Rulemaking [EPA, 2012a], EPA states that selenium results from August through October, 2008, reflected less than optimal treatment performance due to lack of experience on the part of operating staff or because the sampling period occurred shortly after commissioning. However, the system started up in February, 2008, and had been operating for a six

- month commissioning period [EPA, 2012a] before sampling began. Also, EPA excluded the data point of 299 μg/L obtained on 7/4/10, although the Agency stated that Duke Energy reported no indication of abnormal events within that sampling time period.
As illustrated in Figure 5

- 1, some facilities have much higher inlet selenium levels exceedi ng 8000 parts

- per

- billion) than the measured selenium levels at Allen and Belews Creek, upon which the proposed selenium limits were based. Thus, these facilities may have even greater challenges in meeting the proposed selenium limits.
Comparison of the d ata collected by EPA during EPA sampling and CWA 308 sampling performed by the facilities for the ELG effort [EPA, 2012b

– f] shows that there are several instances of exceedances of the arsenic limit within this limited data set (Figure 5

- 2).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 481 Figure 5

- 3 presents the data collected by EPA, either as part of their own sampling or as part of the CWA 308 sampling performed by the facilities for the ELG effort [EPA, 2012b

– f]. EPA evaluated the data from Hatfield‘s Ferry, Keystone, and Miami Fort. A review of results from allEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 482 sites that employ ferric chloride and organosulfide addition shows instances where concentrations of mercury exceed the proposed limits.

Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.
EPA disagrees that it has improperly selected or excluded certain data. See Appendix A, Essay Section 3.2 and DCN SE05733 for the engineering evaluation of pl ant conditions and data selection.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 69 External Review Flag: No External Review Ext ernal Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 483 

### 6.10 In the context of daily maximum limitation, EPA’s statement that “a well

operated plant should be capable of complying with the effluent limitations at all times” is not accurate.

EPA’s s tatement in Section 13.5.2 of the TDD [EPA, 2013] is inaccurate because the daily maximum limitation is set at the 99th percentile of daily measurements. Thus, by definition, the effluent level can be expected to exceed the limit 1 in 100 times. For 365 da ys of once

- per

- day measurements, there will be 3 to 4 exceedances per year just by chance when a plant is in control.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EP A

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 70 External Review Flag: No External R eview External Review Incorporated into Response: No
Comment Excerpt:



### 6.11 In the context of monthly average limitation, a well

- operated plant will exceed the effluent limit in 1 out of every 20 months, on average.

The monthly average limitation is set a t the 95th percentile of the distribution of monthly averages. Thus, by definition, the effluent level can be expected to exceed the limit in 1 out of every 20 months, on average, just by chance when a plant is in control.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Con trol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 122 External Review Flag: No External Review External Review Incorporated into Response: NoEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 484 Comment Excerpt:
2. The evaluation of success of the limits in the Steam Electric Rulemaking used the same data to compute the limits and also to see how well those limits performed (what percent of data exceeded limits). This underestimates the proportion of new data (not used to compute limits) that exceeds the limits, as new data will be somewh at different than the same data used to develop the limits. The impact: more exceedances can be expected than noted here when new data are collected at the same plants at other times, and even more so when collected from other plants. The limits are less ‘ reasonable’ than acknowledged here, due to the method used to validate the limits’ performance.

Alternative recommendation : a cross

- validation method (where limits are compared to data not used to develop the limits) is the standard statistical procedure t o give a more accurate picture of how often computed limits might be exceeded. There are several ways to perform cross

validation in the statistical literature, such as a jackknife procedure, and one of them should be employed here.
The jacknife or “drop o ne out” procedure works as follows. If there were 12 measurements, to determine how often they would be expected to exceed a limit, one measurement would be set aside and the limit computed using the other 11. It would be noted whether or not the set

- aside measurement exceeded the limit just computed. The set

- aside measurement is returned to the 12, and a different observation set aside. A different limit is then computed with the remaining 11, noting whether the newly set

- aside observation exceeds the limi t or not. This continues as each individual measurement is set aside and is compared to the limit computed from the remaining 11. In this way, the percent of measurements exceeding a limit that they were not used to compute can be reported. This provides a more accurate estimate of what percent of measurements not yet taken might exceed the limit computed from the original 12.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations See the response to D CN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.
EPA disagrees that the jackknife is an appropriate statistical approach in developing and evaluating limitations. See Appendix A, Essay Section 4.1.4.

Commenter Name: Paul Chu Commenter Affiliation: El ectric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 123 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 485 3. The daily maximum limitation is an estimate of the 99th percentile of the distribution of daily measurements. The 99th percentile is by definition the level that is exceeded 1 in 100 times. For 365 days of once per day measurements, 3 to 4 exceedances can be expected just b y chance each year when a process is in control. If 3 measurements are made each day, 9 to 12 of these can be expected to exceed the daily maximum limitation. EPA states that “a well

- operated plant should be capable of complying with the effluent limitatio ns at all times“(Section 13.5.2). Based on the definition of the percentile used, this is not the case.

Alternative Recommendation : a plant could be considered out of control if more than 1% of daily measurements over a year’s time exceed the 99th percenti le, rather than if any one measurement during the year exceeds that level. If 3 out of 365 once per day measurements exceeded the daily limitation, no action is warranted. It is simply what is expected based on the method used to compute the daily maximum limitation. If more than this 1% exceed, the plant is not operating as expected and can be considered out of compliance.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 124 External Review Flag: No Extern al Review External Review Incorporated into Response: No
Comment Excerpt:
4. The monthly average limitation is an estimate of the 95th percentile of the distribution of the monthly averages of the daily measurements. That percentile will be exceeded by d efinition once out of every 20 monthly averages for a plant that is in control. If a single exceedance indicates a plant is out of control, by definition all plants will be considered out of control after monitoring for about 20 months, or 1.75 years, on a verage.

Alternative Recommendation : a plant could be considered out of control if a monthly average exceeds the limitation more often than an average of once in 20 months, rather than immediately when a monthly average exceeds the limit. So if after monito ring for three years, 3 monthly averages exceeded the limitation, the plant is out of control. If only 1 or 2 monthly averages (fewer than 5%) exceed the limitation, the plant would not be out of control as this the expected rate of exceedance resulting fr om using a 95th percentile.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 486 EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Paul Chu Commenter Affili ation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 125 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
5. The option long

- term average is defined as the median of the plant specific long

- term averages. It is used as the “average performance level ... that a plant with well

- designed and well

- operated model technologies is capable of achieving. “ (page 13

- 13 of the Tech nical Development Document). The option long

- term average is multiplied by the option variability factor to set an effluent limitation. Referring to this limitation, EPA states in the first paragraph of page 13

- 13 “EPA expects that plants will comply with promulgated limitations at all times.” Using a median to represent expected plant performance level is inappropriate

-- by definition, 50% of current plants will have an average that is above the median. The option long

- term average is set at a level that 50% of plants are not now currently achieving.

Alternative Recommendation : in other situations EPA uses the UCL95 to characterize a level below which the true population mean likely occurs. If a value is above the UCL95 it does not represent an average per formance level. Consistent with other EPA regulations estimating an average performance level, the UCL95 of the plant specific long

- term averages could be used. This statistic (the UCL95) is computed by EPA’s freely

- available ProUCL software, so is easily computed by all. One of the recommended methods for computing the UCL95, one that requires little in the way of assumptions, is the BCA bootstrap method. Bootstrapping does not require an assumption of a normal distribution, for example. Software is readil y available

-- ProUCL computes the BCA bootstrap.
Comment Response:
EPA disagrees that the UCL95 is appropriate for setting limitations. The UCL95 is the same as the tolerance limitation addressed in Appendix A, Essay Section 4.2.1.
EPA disagrees with th e comment’s interpretation of the median. EPA’s use of the median in calculating the LTA is addressed in Essay Section 2.4.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 487 Document Control Number: EPA

- HQ

- OW

- 200 9

- 0819

- 4499

- A1 Comment Excerpt Number: 132 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.3 The same data used to compute limits in the rulemaking were also used to determine performance (what percent exceeded limits).

Using the same data to compute limits and to determine performance underestimates the proportion of new data (not used to compute limits) that exceeds the limits. Underestimation occurs because the new data will be somewhat differ ent than the data used to develop the new limits. Thus, more exceedances can be expected than noted in the proposed rule

— both when new data are collected at the same plants and especially when new data are collected at other plants.

Alternative recommendat ion : Use a cross

- validation method, where limits are compared to data not used to develop the limits. There are several ways to perform cross

- validation, such as using a jackknife procedure (see Appendix C).
Comment Response:
EPA describes its purpose fo r comparing the data used as the basis for the limitations to the values of the limitations in Appendix A, Essay Section 4.1.3. Also see DCN SE05733.
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84 (in Comment Code #31.k).
EPA disagrees that cross

- validation is necessary in evaluating limitations. See Essay Section 4.1.4.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 133 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 6.4 Since the option long

- term average i s defined as the median of the plant

specific long

- term averages, 50% of the current plants will have an average thatEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 488 

### is above the median, leading to a limitation that will also be exceeded more frequently by existing data.

Alternative recommendation : Con sider using the UCL95 (95th percentile upper confidence limit) of the plant

- specific average performance levels to set the option long

- term average. The statistic, UCL95, is easily computed by EPA’s freely available ProUCL software (see Appendix C).
Comment Response:
EPA disagrees that the UCL95 is appropriate for setting limitations. The UCL95 is the same as the tolerance limitation addressed in Essay Section 4.2.1.
EPA disagrees with the comment’s interpretation of the long

- term average. Using the median of the plant

- specific long

- term averages does not mean that those plants whose long

- term average is above the median are more likely to exceed the effluent limitation. See Essay Section 2.4, TDD Section 13, and DCN SE05733.

Commenter Name: Kim M ireles Commenter Affiliation: Luminant Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4614

- A1 Comment Excerpt Number: 21 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Because of the errors noted above, EPA calculated effluent limitations for FGD wastewater are overly stringent and not justified. Using EPA's traditional methods of calculating effluent limits, a daily maximum limit is typically the 99 th percentile of daily concentrations and a mont hly average limit is typically the 95 th percentile of monthly average concentrations. Therefore 1% of daily concentrations would be expected to exceed the daily maximum limit, and 5% of monthly average concentrations would be expected to exceed the monthly average limit. Instead, with EPA's proposed steam electric limits for FGD wastewater, the average frequency of exceeding the proposed daily max would be 19.7%, almost 20 times higher than intended. The average frequency of exceeding EPA's proposed monthly limits is 40.3%, over eight times higher than intended.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 489 Commenter Nam e: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 123 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerp t:
The resulting magnitude of the bias in EPA’s calculated limits for FGD effluent is so large that the proposed limits are invalid for their intended purpose. The daily maximum limit is intended to be the 99 th percentile of daily concentrations from a plant operating with a BAT treatment system, and the monthly average limit is intended to be the 95 th percentile of monthly average concentrations. Accordingly, 1% of daily concentrations would be expected to exceed the daily maximum limit and 5% of month ly average concentrations would be expected to exceed the monthly average limit. Historical data from the model plants EPA identified as operating BAT treatment systems (or treatment systems that exceed BAT) demonstrate that EPA’s proposed limits are inva lid.
Table 18 provides a summary of the historical frequency of exceedances analysis for the plants EPA identified as operating with BAT or better treatment systems. Historical frequencies of exceedance of EPA’s proposed daily maximum limits (DML) range f rom 0% to 52% and average 20.1% (20 times higher than intended). Historical frequencies of exceedance of EPA’s proposed monthly average limits (MAL) range from 0% to 100% and average 41.5% (over 8 times higher than intended). With the exception of seleni um at Allen, all cases of 0% exceedance were based on data from less than one year.

Table 18: Historical Exceedance Rates At Proposed Model Plants for EPA’s Proposed ELGs

Analyte Plant Daily Average Concentration DML

Percentage of Exceedances Monthly

Average Concentration MAL

Percentage of Exceedances Arsenic (μg/L) Hatfield’s Ferry 9.129 52.0% 9.081 96.4% Arsenic (μg/L) Keystone 4.013 0% 4.025 0% Arsenic (μg/L) Miami Fort 4.575 0% 4.800 0% Arsenic (μg/L) Pleasant Prairie 6.150 0% 5.350 0%

Mercury (ng/L) Hatfield’s Ferry 158.333 11.7% 160.669 29.2% Mercury (ng/L) Keystone 63.150 0% 84.700 0% Mercury (ng/L) Miami Fort 196.923 36.7% 121.960 100.0% Mercury (ng/L) Pleasant Prairie 279.361 41.2% 299.661 88.9%Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 4 90 Analyte Plant Daily Average Concentration DML

Percentage of Exceedances Monthly

Average Concentration MAL

Percentage of Exceedances
Nitrate/nitrite

- N (mg/L) Allen 4.722 46.7% 5.054 50.0%

Nitrate/nitrite

- N (mg/L) Belews Creek 4.361 39.6% 11.931 62.5%

Selenium (μg/L) Allen 5.530 0% 6.147 0% Selenium (μg/L) Belews Creek 12.701 13.3% 12.136 71.4%

Average: 20.1% 41.5%

The exceedance rate for the proposed arsenic monthly average limitation at Hatfield’s Ferry is 96.4%. According to EPA, Pleasant Prairie was not used to set ELGs because its treatment system is more advanced than the one

- stage chemical prec ipitation treatment system proposed as BAT. Yet Pleasant Prairie cannot even meet the proposed BAT limitations derived by EPA. The figure below graphs Pleasant Prairie’s arsenic self

- monitoring data and EPA’s sampling data and shows that Pleasant Prairie cannot consistently meet either the daily maximum limitation or the monthly average limitation. The details of the Pleasant Prairie analysis are included in WE Energies’ comments on the proposed rule.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 491 The exceedance rates for the proposed monthly avera ge mercury limitation at Hatfield’s Ferry and Miami Fort are 29.2% and 100%, respectively. Pleasant Prairie, which has a two

- stage chemical precipitation treatment system, has a mercury monthly average limitation exceedance rate of 88.9%, based on the EPA sampling data and a portion of Pleasant Prairie’s self

monitoring data.
WE Energies has evaluated the proposed mercury limitations in light of its full set of Pleasant Prairie self

- monitoring data and has concluded that Pleasant Prairie cannot consistentl y meet either proposed monthly average or daily maximum limitations, as illustrated in the figure below. This analysis is described in further detail in WE Energies’ comments on the proposal.

The exceedance rates for the proposed nitrate/nitrite

- N month ly average limitations at Allen and Belews Creek are 50% and 62.5%, respectively. The exceedance rate for selenium monthly average limitation at Belews Creek is 71.4%. These exceedance rates were calculated using the same plants and same data that EPA us ed to set the proposed limits. The exceedance frequency analysis thus demonstrates that EPA’s proposed limits for chemical precipitation treatment and for biological treatment are flawed.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAGEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 492 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 12 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Combined available data (i.e., EPA sampling, CWA 308 sampling and self

- monitoring data) from Allen an d Belews Creek were used to assess the performance of EPA’s proposed ELGs for biological treatment of nitrate

- nitrite and selenium.
Historical frequencies of exceedance of EPA’s proposed daily maximum limits range from 0% to 52% and average 20.1% (see Tabl e 13). With the exception of selenium at the Allen facility, all cases of 0% exceedance were based on data from less than a year.
Historical frequencies of exceedance of EPA’s proposed monthly average limits range from 0% to 100% and average 41.5% (see Tab le 14). Again, with the exception of selenium at the Allen facility, all cases of 0% exceedance were based on data from less than a year. Only months with at least 4 days of sampling were included in the assessment of monthly average limitations.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 493 Comm ent Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 13 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
For EPA’s proposed daily maximum limit, the ave rage historical exceedance rate for model facilities (plus one facility with a treatment system that exceeds BAT) is over 20%, although the intended exceedance rate is only 1%. Similarly for EPA’s proposed monthly average limit, the historical exceedance r ate for model facilities is over 40%, although the intended exceedance rate is only 5%. These facts demonstrate that EPA’s proposed limits do not satisfy the fundamental requirements of ELGs.
Reasons for the discrepancies between the intended exceedance ra tes and the historical exceedance rates can be found in the EPA’s selection and censoring of data, and in EPA’s selection of statistical methods. EPA’s selections for implementing its general ELG methodologyEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 494 systematically reduced the calculated ELGs. The calculated ELGs were reduced to the point that they are not valid for their intended purpose.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A 1, Excerpt Number 84.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 17 External Review Flag: No External Review External Review Incor porated into Response: No
Comment Excerpt:
The resulting magnitude of bias in EPA’s calculated ELGs for FGD effluent is so large that the proposed ELGs are invalid for their intended purpose. The daily maximum limit is intended to be the 99th percentile of daily concentrations from a facility operating with a BAT treatment system, and the monthly average limit is intended to be the 95th percentile of monthly average concentrations. Accordingly, 1% of daily concentrations would be expected to exceed the da ily maximum limit and 5% of monthly average concentrations would be expected to exceed the monthly average limit. Historical data from the facilities EPA identified as operating with BAT treatment systems (or systems that exceed BAT treatment) demonstrate that EPA’s proposed ELGs are invalid.
For facilities EPA identified as operating with BAT or better treatment systems, the average (over facilities and pollutants) frequency of exceedance of EPA’s proposed daily maximum limits is 20.1%

- 20 times higher th an intended. The average (over facilities and pollutants) frequency of exceedance of EPA’s proposed monthly limits is 41.5%

- over 8 times higher than intended.
Comment Response:
EPA disagrees with the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655

- A18 Comment Excerpt Number: 26Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 495 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
The available historical data from EPA’s selected facilities operating BAT treatment systems can be used to assess the performance of EPA’s calc ulated ELGs. Specifically, historical daily concentrations and monthly average concentrations can be compared to EPA’s proposed limits to characterize the historical frequency of exceedances. The historical frequencies of exceedance then can be compared to the intended probabilities of exceedance.
The daily maximum limit is intended to be the 99th percentile of daily concentrations from a facility operating with a BAT treatment system, and the monthly average limit is intended to be the 95th percentile of m onthly average concentrations. Accordingly, 1% of daily concentrations would be expected to exceed the daily maximum limit and 5% of monthly average concentrations would be expected to exceed the monthly average limit.
Comment Response:
EPA disagrees wit h the comment’s interpretation of the percentile basis of the limitations. See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 84.

Commenter Name: Thomas Cmar Commenter Affiliation: Earthjustice, et al. Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4684

- A1 Comment Excerpt Number: 84 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

a. EPA’s proposed selenium limits can be met by the biological treatment system under a range of influent conditions.
Based on Dr. Jenkins’ analysis of the data from the Mountaineer plant, “the ABMet® unit consistently produced an effluent with a total Se level below 7.2 ppb and with many values in the 1

- 2 ppb range (Figures 5 and 6) making i t fully compliant with the EPA’s proposed daily maximum and monthly average total Se limitations.” 328 As Dr. Jenkins concludes, once the ABMet system at the Allen plant was fully acclimated, it was able to handle significant fluctuations in the influent t otal selenium levels, and still meet the proposed selenium effluent limits. 329

Data from all three plants show that meeting the selenium limits set by EPA can be achieved, after an adequate start up and commissioning period, so long as tight process contro l isEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 496 maintained, there is adequate sensing and control capabilities, and the system “provide[s] adequate equalization capacity within and/or between the first

- stage chemical precipitation process and the biological treatment stage.” 330 Monitoring of the s elenium levels at the effluent from the chemical precipitation stage is also critical. 331

b. EPA’s mercury limits can be met by the biological system following only hydroxide precipitation.
EPA’s mercury limits for the biological treatment option a re well supported by the record. Because those limits are based on the performance of the chemical precipitation system, and do not account for additional removals of mercury in the biological system, even lower mercury limits could be established.

EPA ack nowledged this additional metals removal in the biological treatment system, 332 finding that “the biological treatment stage provides pollutant removals for arsenic and mercury (and other pollutants of concern with similar removal mechanisms) in addition t o the pollutant removals that occur in the chemical precipitation stage of the biological treatment technology option . . . . Thus, plants employing and optimally operating all components of the biological treatment technology option (including adding orga nosulfide to achieve sulfide precipitation) should achieve pollutant removals for arsenic and mercury (and other pollutants with similar removal mechanisms) that are equal to or even greater than the removals based on chemical precipitation technology." 333

Dr. Jenkins’ analysis confirms EPA’s findings for mercury: 334 “in all of the ABMet® plants evaluated the biological stage of the “Chemical Precipitation and Biological Treatment” provided additional Hg removal over that obtained by the chemical precipitat ion step (Figures 12

- 14) both when the precipitation step employed hydroxide only and when it employed hydroxide plus polysulfide.” 335

Dr. Jenkins concludes that the “anaerobic biological system effluent total Hg concentration seems to be proportional to t he biological system influent total Hg over an influent total Hg range from approximately 1000 ppt to approximately 20 ppt.” 336 Thus, if the effluent from the chemical treatment system is compliant with the limits EPA set for mercury based on that technol ogy (242 ppt daily maximum and 119 ppt monthly average), then even lower levels would be expected in the effluent.

328 Jenkins FGD Report, Appendix C, at 9.

329 Id. at 8.

330 Id. at 10. EPA’s exclusion of data during start

- up, commissioning, and upsets for the Allen plant was justified. Dr. Jenkins concludes that based on the Allen system’s ability to handle subsequent spikes in influent selenium, it was justified for EPA to omit earlier seleniumEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 497 exceedences that corresponded to influent selenium spikes , on the basis that the system was still in a start

- up or commissioning phase. Id. at 8

331 Id.

332 78 Fed. Reg. at 34,473.

333 TDD at 13

- 26.

334 Dr. Jenkins found that the presence of non

- detects in both the influent to and effluent from the biological tr eatment system prevented a similar analysis regarding arsenic.

335 Jenkins FGD Report, Appendix C, at 11.

336 Id. at 12.
Comment Response:
EPA agrees with the comment that properly operated, maintained, and designed facilities are capable of complying with the limitations. See Appendix A, Essay Section 5.2.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 498 32. Analytical Methods

Commenter Name: Doris Cooksey Commenter Affiliation: City Public Service of San Antonio (CPS Energy) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4283

- A1 Comment Excerpt Number: 18 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Several of the FGD limits are set at laboratory detection limits and if there is any matrix interference from the FGD w astewater, labs will not be able to produce viable results. Per EPRI, EPA used 'a synthetic FGD water at about the 50th percentile of TDS (17,000 mg/L), and labs typically diluted the sample by 20 times to avoid analytical issues'. Diluti ons raise the method detection limit therefore the expected result is that labs may not be able to meet the extremely low detection limits proposed. FGD systems that run at higher percentiles or concentrations ofTDS will have even more difficulty fi nding a lab that can meet the analytical standards proposed.
Comment Response:
EPA disagrees with the commenter’s assertion that laboratories “will not be able to produce viable results” and that they “may not be able to meet the extremely low detection limits” needed for plants to demonstrate compliance with the effluent limitations for FGD wastewater that are set equal to the detection limit. The limits at issue are the limits for new sources (and the voluntary incentives program (both of which are bas ed on chemical precipitation and evaporation.) The commenter states that the reason laboratories may not be able to do so is because FGD wastewater contains high concentrations of TDS and that laboratories may need to dilute the wastewater sample to avoid analytical issues. As support for that position the commenter states in certain analyses and a laboratory participating in an EPA study diluted FGD wastewater containing 17,000 mg/L TDS, and also asserted that FGD systems that operate at even higher concen trations of TDS “will have even more difficulty finding a lab that can meet the analytical standards proposed.” However, the commenter overlooks the fact that plants subject to these new source performance standards or effluent limitations under the volun tary program (which are based on the detection limit 2 ) will have very clean wastewater because the other effluent limitations that would apply to their discharge include TDS limitations of 50 mg/L daily maximum and 24 mg/L monthly average; and as a result, the laboratories will not experience analytical issues that would prevent them from measuring pollutant concentrations at

2 More precisely, the effluent limitations were developed based on the sample

- specific quantitation limits for the data. The “detection limit” effluent limitations the commenter refers to are the FGD wastewater NSPS/PSNS daily maximum limitations for arsenic (4 up/L) and selenium (5 up/L). The discharge is also subject to effluent limitations for mercury (39 ng/L daily maximum; 24 ng/L monthly average) and TDS (50 mg/L daily maximum; 24 mg/L monthly average). These effluent limi tations also apply to plants that adopt the limitations under the BAT voluntary incentives program for existing sources.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 499 the levels needed for plants to demonstrate compliance. The new source performance standards and effluent limitations under the volun tary incentives program are based on plants employing advanced treatment technologies to treat their FGD wastewater, including chemical precipitation, softening, and,vapor

- compression evaporation. As part of this treatment process, the wastewater is evapor ated, leaving behind dissolved constituents that comprise the majority of the TDS present in untreated FGD wastewater. It is the condensed vapor from the evaporation process that is the treated FGD wastewater which plants discharge and that the laboratorie s will be analyzing, and the pollutants that remain in the wastewater following treatment will not be present at concentrations that would interfere with the laboratory being able to measure to the levels needed. Wastewater samples collected by EPA for thi s treatment technology showed that the TDS concentrations in the treated FGD wastewater averaged approximately 15 mg/L (see the long

- term average in DCN SE05733). Although plants are not required to use the technologies that serve as the basis for the effl uent limitations, they would still be required to demonstrate compliance with the TDS effluent limitations, thus the laboratory analyses for arsenic and selenium would not be affected by the TDS concentrations in the sample.
Also see responses to EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 67, and EPA

- HQ

OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 89.

Commenter Name: Cari Boyce Commenter Affiliation: Duke Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3 Comment Excerpt Number: 67 External Review F lag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

Dilution of Samples are Needed to Protect Sensitive Lab Equipment and Address Matrix Interferences
The limits proposed are set at 8 ug/L (daily maximum) and 6 ug/L (m onthly average) for arsenic and 16 ug/L (daily maximum) and 10 ug/L (monthly average) for selenium. However, due to the higher levels of Total Dissolved Solids (TDS) found in FGD wastewater, analytical methods would normally require higher dilution ratios to protect sensitive laboratory equipment. Increases in the dilution ratio result in increased reporting limits, most likely higher than the proposed effluent guideline limits for these constituents.
There is not a typical sample composition for wastewater from FGD systems. Two treatment systems run side by side can have completely different characteristics and TDS in FGD waters has been as high as 80,000 ppm. Dilution is necessary to prevent physical interferences from ionization suppression, nebulizer clo gging, and reduction of ion transmission due to deposits on the extraction and/or skimmer cones. Target TDS in samples is between 1,500 to 2,000 ppm. The use of aerosol dilution systems extends the amount of TDS that can be in the sample by aboutEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 500 10%, but this method does not remove the need to still physically dilute the sample in order to bring the TDS into a reasonable concentration range. High concentrations of matrix elements (Ca, Mg, Cl, B, SO4, etc.) or other interfering components can also require m ore dilution in order to meet the method quality control requirements. This is particularly applicable for MS/MSD (matrix spike / matrix spike duplicate) recoveries and the requirement that the internal standards recovery be between 60 and 125%.

Without su fficient dilution to protect the analytical equipment and to dilute potential matrix interferences, even with the use of a modified method 200.8, repeatable and reliable achievement of sample recoveries within specified limits is uncertain. Most commercial laboratories do not have the economic flexibility to run multiple dilution ratios on a single sample to ensure an optimum analysis.
Additionally, the flow minimization requirement included in the Proposed Rule results in an increase in the FGD absorber ch loride concentrations, TDS concentrations and recycle rate. This provision not only increases the need for additional dilution to protect instrumentation, but also increases the reporting limit for the sample.
It should also be noted that the Inductively C oupled Plasma

– Mass Spectrometry (ICP

- MS) vendor manuals and Method 200.8 (Rev 5.4, 1994, Section 4.1.4) recommend keeping the sample TDS concentration to less than 2,000 mg/l, which results in a greater than 13 to 1 dilution ratio for the average FGD was tewater sample of 28,600 mg/l TDS 20

. This dilution ratio would result in a reporting limit of greater than the proposed monthly average concentrations for selenium and arsenic. The same table in the TDD references an average chloride concentration of 7,74 0 mg/l, which is less than 20% of the design chloride operating level for some of our units. In fact, some of our units burning Illinois Basin coal have FGD wastewater TDS concentrations in excess of 80,000 mg/l, which would result in a potential dilution ratio of 40 to 1, with a corresponding increase in the reporting limits, well above those proposed for selenium and arsenic. Higher TDS concentrations also tend to have greater interferences, making matrix spike/recovery percentages consistently outside o f the allowable range for EPA Method 200.8.
In the summer of 2012, EPA commissioned a method detection limit (MDL) study for synthetic FGD wastewater and the results were published in October, 2012 21 . The study used a synthetic matrix that was originally 1 2,000 ppm TDS, which is on the very low end of TDS seen in actual FGD samples. The participating laboratories were instructed to spike the solution and then dilute by a factor of 2. It appears that EPA’s intent was for the participants to use a solution of 6,000 ppm TDS. The participants in the study diluted the matrix anywhere from 4 to 10 times prior to analysis, which means that the lab instrument saw an effective TDS of 1,200 to 6,000 ppm. One of the reports, from Test America, specifically states that the matrix was diluted according to routine procedure to keep the matrix from overwhelming the instrument. Southwest Research also diluted the sample to avoid interference from the FGD matrix on selenium. The final ML (minimum level) values recommended by the report are 2 ppb for arsenic and 5 ppb for selenium. However, actual FDG wastewater would normally require higher dilution ratios than those listed in EPA’s MDL study which would result in raising the reporting limits, most likely higher than the prop osed effluent guideline limits for these constituents.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 501 EPRI also conducted a similar MDL study in 2012. In this study, EPRI used a synthetic FGD matrix with 17,000 ppm TDS, which is a closer representation of the mean TDS concentration for FDG wastewater ( around the 50% percentile). The labs in EPRI’s study typically had to dilute the sample up to 20 times to avoid analytical issues. Whether a laboratory uses normal dilution or gas dilution, or some combination of both, the effective detection limit for the sample is raised. Additionally, of five laboratories commissioned by the EPA that participated in their MDL/ML study, only two of these laboratories are known to routinely analyze FGD wastewater. In comparison to EPRI’s results, it does not appear that EP A’s MDL study is appropriate and it should not be used for any purpose related to this rulemaking.
Commercial labs, also, do not typically have equipment dedicated to analyze FGD wastewater. The equipment they use could necessitate using dilution ratios as high as 500 to 1 to prevent fouling and scaling of the ICP plasma disks, which results in equipment contamination. Labs have reported having to disassemble their equipment and replace components prior to returning the lab equipment back to service due to this type of contamination. So, these high dilution ratios are critical to maintaining their reliability and sample integrity.

Results from Duke Energy’s Round Robin Testing
Duke Energy recently conducted a round robin analysis of FGD wastewater to determine the repeatability and reporting limits for arsenic, mercury, selenium and nitrate/nitrite among four different commercial laboratories. Samples were pulled from the FGD wastewater treatment system effluent of five different Duke Energy stations. The sampling included effluent from a chemical precipitation system, a chemical precipitation plus biological treatment system and settling basin plus biological treatment systems. The bulk samples were sent to the Duke Energy Environmental Lab where they were split into four individual samples. Three of these samples were sent to commercial labs for analysis, while the fourth sample was analyzed internally at Duke Energy’s Environmental Lab. The results of the round robin sampling event are shown in Tables 1

- 13 to 1

- 16 below.
As is demonstrated from this exercise, various labs do not all follow the exact same procedures. Some labs need to dilute the samples more than other labs, which results in higher dilution factors. As mentioned earlier, higher dilution factors subsequently result in overall higher reporting limits. The tables below show that the reporting limits among these four laboratories ranged from 1 ppb to 500 ppb for arsenic and 1 ppb to 500 ppb for selenium. While all of the differences in proce dures between these four labs is unknown, for at least two of the laboratories, the reporting limits were determined in Milli

- Q water following the 40 CFR 136 MDL/ML procedure, whereas, the Standard Operating Procedures (SOPs) published by EPA recommend th at MDLs and RLs be determined using a synthetic FGD mixture.
Each of the labs selected for this evaluation are experienced with the analysis of FGD wastewater, and yet there was still a significant disparity in not only the reported results, but also the r eporting limits. Given the lack of agreement between labs on the results from FGD wastewater analysis, it is critical that any BAT limits promulgated account for these disparities.

Table 1

- 13. Laboratory Comparison for Arsenic in FGD MatrixEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 502 Arsenic (ug/L)

- EPA 200.8

Lab A Dilution

Factor Lab B Dilution

Factor Lab C Dilution

Factor Lab D Dilution

Factor Station 1 < 5.0 5 < 5.0 5 14 5 < 500 100 Station 2 < 5.0 5 < 5.0 5 20 2 < 250 50 Station 3 < 5.0 5 3.7 1 18 2 < 100 100 Station 4 < 5.0 5 1.6 1 27 2 < 250 50 Station 5 < 5.0 5 < 5.0 5 46 2 < 500 100

Table 1

- 14. Laboratory Comparison for Selenium in FGD Matrix

Selenium (ug/L)

- EPA 200.8

Lab A Dilution

Factor Lab B Dilution

Factor Lab C Dilution

Factor Lab D Dilution

Factor Station 1 397 5 357 5 460 2 < 500 100 Station 2 < 5.0 5 < 5.0 5 2.9 2 < 250 50 Station 3 38.8 5 28.2 2 37 2 < 100 100 Station 4 < 5.0 5 2.2 1 2.9 2 < 250 50 Station 5 1014 5 881 5 1300 2 980 100

Table 1

- 15. Laboratory Comparison for Mercury in FGD Matrix

Mercury (ng/L)

– EPA 1631

Lab A Dilution

Factor Lab B Dilution

Factor Lab C Dilution

Factor Lab D Dilution

Factor Station 1 161 5 140 1 95.2 10 110 10 Station 2 0.76 5 1.73 1 0.85 1 0.56 1 Station 3 4,590 99 4,240 100 3,880 500 2,800 1,000 Station 4 14.3 5 13.2 1 8.56 1 8 1 Station 5 113 5 10.4 1 93.3 10 93 10

Table 1

- 16. Laboratory Comparison for Nitrate/Nitrite

- N in FGD Matrix

Nitrate/Nitrite

- N (mg

- N/L)

- EPA 353.2

Lab A Dilution

Factor Lab B Dilution

Factor Lab C Dilution

Factor Lab D Dilution

Factor Station 1 176 200 176 200 160 200 180 25 Station 2 < 0.01 1 < 0.02 1 0.43 1 < 0.10 1 Station 3 < 0.01 1 0.02 1 0.085 1 < 0.10 1 Station 4 < 0.01 1 <0.02 1 0.042 1 < 0.10 1Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 503 Station 5 36 50 35.8 15 28 100 38 10

20 TDD Section 6.1, Table 6

- 3, pages 6

- 5 and 6

- 6 [EPA

- 921

- R

- 13

- 002].

21 USEPA. Results of the ICP/MS Collision Cell Method Detection Limit Studies in the Synthetic Flue Gas Desulfuriztion Matrix. EPA

- HQ

- OW

- 2009

- 0819

- 2116. October 18, 2012.
Comment Response:
EPA recognizes that, in so me cases, samples with high total dissolved solids (TDS) may require some level of dilution in order to be successfully analyzed by ICP/MS procedures, including those that utilize the collision cell or dynamic reaction cell instrumentation. However, EPA

n otes that the “target TDS” of 1,500 to 2,000 ppm cited by the commenter and the reference to information in EPA Method 200.8 are based on much older ICP/MS instrumentation (Method 200.8, Revision 5.4 from 1994 cites a figure of 0.2% v/v, from a 1986 refere nce and which equates to 2,000 ppm TDS). More modern ICP/MS instruments do not have the same physical limitations with regard to TDS as were noted in 1986 and many instrument manufacturers provide “high solids” interface equipment that is expressly design ed to address the TDS

concern. EPA’s record includes information about analyses by commercial laboratories that routinely use such interfaces. Furthermore, the analytical results for EPA’s sampling data, the CWA 308 sampling data, and self

- monitoring data submitted by power companies demonstrate that analytical laboratories, both commercial and company

- owned certified laboratories, are able to measure the regulated pollutants in FGD wastewater at the levels needed to show compliance with the effluent limit ations. 3 (The same is true for gasification wastewater, where EPA’s data show that laboratories results are low enough to demonstrate compliance with the effluent limitations.)
In addition to asserting generally that laboratories will need to dilute sampl es to protect laboratory equipment (which EPA addresses in the preceding paragraph), the commenter states that TDS in FGD waters has been as high as 80,000 ppm, and specifically points to their own plants stating that “some of our units burning Illinois Ba sin coal have FGD wastewater TDS concentrations in excess of 80,000 mg/l.” However, the commenter fails to also mention that plants that do not discharge their FGD wastewater will not need to send the wastewater to laboratories for analysis. This is becaus e the effluent limitations are applicable to discharges of FGD wastewater; those wet

- scrubbed plants that generate but do not discharge their FGD wastewater would not have to do such compliance monitoring for these effluent limitations. EPA’s record indica tes that many facilities already do not discharge their FGD wastewater. EPA reviewed Steam Electric Survey data, which was includes data from a census of every coal

- fired and petroleum coke

- fired power plant in the U.S., and found that the highest reporte d chloride concentration for plants that actually discharge the FGD wastewater is 25,000 ppm. The ICR includes data for only two wet

- scrubbed plants with chlorides higher than 25,000 ppm and

3 EPA notes that the BAT effluent limitations in the final rule are higher than at proposal. See the preamble and regulation for the fi nal rule. Even if the effluent limitations had remained at the proposed level, the data in the record show that laboratories are able to measure pollutants at concentrations necessary for plants to show they are in compliance.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 504 neither of these plants discharge the FGD wastewater. The data in the record for FGD wastewater shows that, in general, TDS concentrations in FGD wastewater are typically double the chloride concentration. Using that rule of thumb, the TDS at the discharging plants would be no higher than approximately 50,000 ppm. The d ata used to calculate the effluent limitations includes data from plants with concentrations of approximately 30,000 ppm TDS, which the laboratories were able to analyze without difficulty. Given the data in the record showing laboratories have been able t o analyze the regulated pollutants at low levels in FGD wastewater containing high concentrations of TDS, EPA has no reason to expect that laboratories would not be able to measure the pollutants at the necessary level even for FGD discharges with higher

c oncentrations of TDS. See the comment response elsewhere in Code 32, showing that laboratories could measure arsenic concentrations as low as 0.2 ug/L and selenium at 0.5 ug/L. These values are 10 times lower than the ML calculated for the MDL study, whic h was based on the maximum ML for the participating laboratories. Even if TDS levels of 50,000 were higher than the laboratory instrumentation could accommodate, a 2X dilution would bring the TDS down to 25,000 mg/L, lower than the approximately 30,000 mg/ L TDS wastewater and industry have demonstrated they can analyze and still achieve quantitation limits of at least as low as 2 ug/L arsenic and 5 ug/L selenium. This demonstrates that plants will be able to find laboratories that can measure pollutant conc entrations for them to show compliance with their effluent limitations.
EPA disagrees with the statement that most commercial laboratories lack economic flexibility to run multiple sample dilutions. Rather, as in any compliance monitoring scenario, it is incumbent upon the discharger that is contracting out the analyses to develop a contractual mechanism that generates the required data, even if that means explicitly addressing the need for multiple dilutions and developing an equitable approach to paying for such results. In short, most commercial laboratories will do what they are paid to do when asked in an appropriate

manner. The fact that FGD wastewater analyses are not as simple as analyses of samples from some other industries is not an impediment to the provision of useful compliance monitoring results. The commenter states that laboratories do not have equipment dedicated to analyze FGD wastewater; however, there is no need for laboratories to dedicate instrumentation for the sole purpose of anal yzing FGD wastewater. EPA included costs for laboratory analyses of the compliance monitoring samples and these costs reflect the use of collision cell or dynamic reaction cell equipment when performing ICP/MS analyses of FGD wastewater samples. Should

a laboratory find that there is sufficient demand for its analytical services that it chooses to dedicate certain equipment at the facility for the sole purpose of analyzing FGD wastewater it could do so, but it is not necessary and laboratories routinely an alyze wastewaters generated from a variety of industrial processes on a daily basis because they have many clients that are required to report pollutant concentration data for NPDES compliance monitoring purposes. In fact, a number of power plants already have either effluent limitations or monitoring requirements for FGD wastewater included in their NPDES permits; thus, many commercial laboratories already have experience analyzing FGD wastewater samples with their existing instrumentation.
EPA does not support as fact the proposition that commercial laboratories may not be able to dedicate ICP/MS equipment to FGD wastewater analyses, nor should that be necessary. At the same time, however, the ELGs establish numeric effluent limitations and standards for FGDEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 505 wastewater and gasification wastewater (and combustion residual leachate from new sources). These effluent limits apply to discharges from approximately 70 power plants (accounting for the effects of the CCR rule and CPP; approximately 9 0 plants if not taking the CPP into account). In addition, a number of power plants, such as many of those discharging to the Ohio River and Great Lakes, or located in states such as North Carolina, Maryland, and Pennsylvania, already have monitoring requi rements for FGD wastewater included in their NPDES permits. Because of this, there is already a substantial market for analyzing FGD wastewater and that market will grow as the ELGs are implemented. EPA anticipates that commercial laboratories will respond accordingly, not only in terms of equipping their facilities with sufficient numbers of ICP/MS instruments capable of performing such analyses, but also in terms of establishing dilution schemes and pricing options that are capable of generating data of t he appropriate quality to meet the monitoring requirements. Since the new ELG requirements do not begin to apply November 1, 2018 at the earliest, labs will have ample time to prepare for this growing demand for analysis of FGD wastewater.
With regard to f

low minimization, as described elsewhere in the Comment Response Document, EPA notes that although EPA anticipates that some plants may implement some degree of flow minimization to reduce the cost of FGD wastewater treatment to meet the ELGs, the rule doe s not require them to do so. For those plants that EPA’s analyses assume would implement flow minimization, the resulting TDS concentrations in their wastewater are not at levels that would result in analytical interferences that prevent laboratories from measuring pollutant concentrations at the levels necessary to demonstrate compliance with the effluent limitations. For the plants where EPA included flow minimization in the cost estimates for the ELG, the highest chloride concentration that would result from flow minimization at these three plants is 10,000 ppm. The data in the record for FGD wastewater shows that, in general, TDS concentrations in FGD wastewater are typically double the chloride concentration. Using that rule of thumb, the TDS at these p lants would be no higher than approximately 20,000 ppm. The data used to calculate the effluent limitations includes data from plants with much higher concentrations of TDS, which the laboratories were able to analyze without difficulty.
EPA disagrees with the commenter’s contention that the results of EPA’s MDL study “should not be used for any purpose related to this rulemaking.” The fact that only two of the five laboratories tasked by EPA to participate in the MDL study had routine experience with FGD wastewater analyses does not make EPA’s MDL study invalid. because EPA did not design the study to involve only laboratories with FGD experience. Instead, EPA used laboratories that had experience analyzing industrial wastewater samples using ICP/MS analy tical methods in conjunction with collision cell instrumentation. Had EPA used only laboratories with FGD experience, EPA anticipates that the results of the study may well have demonstrated even better method sensitivity.

The results of the commenter’s round robin study are difficult to interpret, given the lack of specific information provided. The commenter describes the participants as “four different commercial laboratories” and then states that “[t]hree of these samples were sent to commercial labs for analysis, while the fourth sample was analyzed internally ...” indicating that the fourth participant was not a commercial laboratory, but in fact the laboratory responsible for splitting the original bulk samples for distribution.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 506 The fact that “vari ous labs do not all follow the exact same procedures” may be as much a function of poor study design and poor contracting processes as it is of the alleged shortcomings of EPA’s studies. That “all of the differences in procedures between these four labs i s unknown” coupled with the commenter’s observation that two of the laboratories determined their MDLs in reagent (e.g., Milli

- Q) water and two used the synthetic FGD matrix further erodes the credibility of the results because it indicates the laboratorie s did not receive clear guidance about how to conduct the study. Conducting a study without a clearly defined structure and protocols, and then using the results from what appears to be a mix of independent efforts to draw conclusions about the labs’ inabi lity to reach what should be a clearly defined objective, is not indicative of sound scientific procedures. What the results for arsenic and selenium do demonstrate is that absent any clear instructions or guidance, different laboratories will respond to analysis requests differently. The tables do not provide any clear indication of either the MDLs or minimum levels (MLs) employed by each laboratory, and EPA can only infer that values preceded by the “less than” symbol (<) may be one or the other type of limit, and since they are all round numbers, probably MLs rather than MDLs. For example, the differences between the arsenic results from Labs A and B are minimal, in that all of the arsenic results are below 5 μg/L, with two results from Lab B provided a s specific values of 3.7 and 1.6, which are below 5.0. Without any other information, including the associated quality control results from these analyses, EPA cannot adequately judge the arsenic results from Lab C. However, EPA notes that one purpose of the use of the collision cell procedure is to avoid polyatomic spectral interferences that can result in high bias or false positives in the determination of arsenic by ICP/MS. The results from Lab D suggest that they were given limited instructions as to the intent of the study and therefore, their results are of limited use.

Commenter Name: Chris M. Hobson Commenter Affiliation: Southern Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment Excerpt Number: 66 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Second, EPA should not have used cyanide data for any purpose, including calculating TWPEs and TWPE removals because the data are invalid due to potential analytical inte rferences with the analytical method(s) as well as the chemical (sodium hydroxide) used to preserve the samples.
Comment Response:
EPA is not establishing effluent limitations for cyanide in the final rule. Although cyanide analyses can be challenging, u pon review of the laboratory reports EPA concluded that the data were acceptable for the purposes the data were used for in the steam electric rulemaking; namely to estimate the baseline pollutant loadings and removals associated with the ELGs. EPA notesEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 507 that cyanide removals represent a small portion of the total pounds of pollutants removed by the ELGs (see DCN SE05847). Since EPA estimated the pollutant removals for cyanide they were included in the total pollutant removal estimates for the rulemaking. As a result, cyanide removal are included in the TWPE calculation. EPA notes that its loadings analysis and pollutant reduction estimates, which in turn feed into cost

- effectiveness analyses, technically are not required for BAT. See response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 72. For the role of cost

- effectiveness in EPA's decisions for the final rule
, see response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4655, Excerp t Number 27 in Comment Code 6.h

.

Commenter Name: Chris M. Hobson Commenter Affiliatio n: Southern Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment Excerpt Number: 69 External Review Flag: Analytical External Review Incorporated into Response: No
Comment Excerpt:
EPA Used Invalid Cyanide Data in Calculating TWPEs

All of EPA’s cyanide data are invalid because of the potential interferences with the analytical method as well as the chemical (sodium hydroxide) used to preserve the samples. EPA should not use these data for any purpose, including calculating TWPEs and TWP E removals.
EPA used Standard Methods, Method 4500 CN E, a colorimetric pyridine

- barbituric acid procedure. This method has numerous interferences, especially in complex sample matrices. This method, as well as other cyanide methods, was originally designe d for use with discharges from metal plating facilities where cyanide was known to be present. Most of the interferences result in false positives, and many of these interferences are caused by sulfide and other reduced sulfur compounds that may be presen t in FGD wastewater. Other compounds that can cause false positives under the right conditions are organosulfides, thiosulfates, nitrates, and other nitrogen compounds. Some of these compounds can actually cause cyanide to be produced during the acid disti llation procedure of the method. The procedures for removing interferences, as provided in the methods, are often not effective, and complex samples, such as FGD wastewater, may also contain unknown interferences. It is entirely possible that most

– if not all

– of the reported cyanide detections could be sample matrix interferences.
The laboratory analyzing the samples for cyanide reported interferences that are discussed in the data narratives to the SERs. The laboratory, in fact, diluted most of the FGD wastewater samples 1 to 10 before even proceeding with the cyanide distillation. In doing so, this raised the reporting limit for cyanide from 0.01 mg/L up to 0.1 mg/L. Most of the FGD wastewaters analyzed had slight detections of cyanide very close to the reporting limit of 0.1 mg/L; these most likely were the result of positive interferences. The laboratory reported poor to no recovery of cyanide in matrix spikes; reported detections in laboratory reagent blanks that, when multiplied by the 10Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 508 dilution fa ctor, represented a substantial portion of the reported concentration in the samples; and also reported poor reproducibility in the field duplicates. In one instance, a very high detection of cyanide in a Miami Fort sample could not be confirmed; a field d uplicate of that sample was less than the reporting limit. These issues were likely due to the difficult FGD matrix and likely interferences in the tests. EPA had the data narrative reviews indicating these problems, but inappropriately did nothing to act on them or modify the cyanide results obtained.
The table below provides the cyanide data EPA used to calculate TWPE removals for chemical precipitation and for chemical precipitation plus biological treatment. All of the cyanide data are qualified by the laboratory due to one or more of the following reasons:
(1) Cyanide samples were not preserved immediately upon collection as required by the method and were not analyzed within the holding time as required by the method,
(2) Cyanide measurements were less than the MDL,
(3) Cyanide measurements were less than the RL or quantification limit,
(4) MS (matrix spike) and/or MSD (matrix spike duplicate) were not within laboratorycontrol limits, or
(5) Cyanide was found in the blank.
Summary of EPA’s Cyanide Data Included in EPA’s TWPE Removal Calculations

Plant Sampling Point Average Concentration, mg/L (with qualifying flags) EPA’s Qualifications of

Analytical Results

Allen SP

- 1, Days 1

- 4 0.26 B CN was found in the blank for one day.

Allen SP

- 3, Days 1

- 4 and

Monthly 1

- 4 0.12 B, F, J 2 < RL; 2 found CN in the blank; 1 MS and/or MSD not within laboratory control limits. Belews Creek SP

- 1, Days 1

- 4 0.042 U, F, J 1 < MDL; 3 < RL

Belews Creek SP

- 3, Days 1

- 4 and

Monthly 1

- 4 0.044 U, J, F 1 < MDL; 7 < RL; 5 MS and/or MSD not within laboratory control limits.

Dickerson SP

- 1, Days 1

- 4 0.95 B CN was found in the blank for two days.

Hatfield’s Ferry SP

- 1, Days 1

- 4

(liquid and solid phases separated 44 H, P Samples not preserved directly following collection. Analyzed 23

- 25 days past the holding time required by the method.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 509

and analyzed separately) Hatfield’s Ferry SP

- 2, Days 1

- 4 and

Monthly 1

- 4 0.18 J, F MS and/or MSD not within laboratory control limits.

Keystone SP

- 1, Days 1

- 4

(liquid and solid phases separated and analyzed separately) 109 H, P Samples not preserved directly following collection. Analyzed 7

- 10 days past the holding time required by the method.

Keystone SP

- 2, Days 1

- 4 and

Monthly 1

- 4 0.16 B, J, U 1 < MDL; 3 < RL; 1 found CN in the blank.

Miami Fort SP

- 1, Days 1

- 4

(liquid and solid phases separated and analyzed separately) 107 H, B, P Samples not preserved directly following collection. Analyzed 13

- 16 days past the holding time required by the method.

Miami Fort SP

- 2, Days 1

- 4 and

Monthly 1

- 4 3.3 B, C, J, F 2 < RL; 5 found CN in the blank; 1 MS and/or MSD not within laboratory control limits.

Pleasant Prairie SP

- 1, Days 1

- 4 0.24 CN was found in the blank for all 4 days.

Roxboro Settling Pond

Effluent None No CN data measured.

EPA should not have used these cyanide data for any purpose, given these analytical issues. The detected results are highly suspect.
EPA has encountered problems with this cyanide test in other ELG rulemakings. In the proposed metal products & machinery ELG r ule, EPA proposed to use all reported cyanide results including those for non

- cyanide processes, which inappropriately predicted and exaggerated high TWPE removal for the treatment options. EPA corrected this error in the final rule by eliminating use of cyanide detection from industrial wastewaters not associated with cyanide plating or other cyanide operations. Development Document for the Final Metal Products and Machinery Category at 12

- 5. Similarly, FGD scrubber systems do not use any materials or che micals having cyanide constituents, and any measured results show all the symptoms of known interferences for this test.
In addition, it is highly unlikely that cyanide exists in FGD wastewater purge from limestone forced oxidation systems. Cyanide compoun ds are generated in reducing environments and destroyed in oxidizing environments ( i.e. , an LSFO absorber, especially one operated to produce saleable gypsum). Cyanide compounds are volatile in an acidic environment such as an FGD absorber. Therefore, from a theoretical chemistry standpoint, cyanide should not be present in FGD wastewater.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 510 See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 66.

Commenter Name: Chris M. Hobson Commenter Affiliation: Southern Company Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1 Comment Excerpt Number: 95 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s Method Detection Limit Study for FGD Wastewater Analysis is F lawed
EPA conducted a MDL study on FGD wastewater using EPA Method 200.8 by inductively

coupled plasma mass spectrometry (ICP

- MS) equipped with collision cell interference reduction equipment. The study involved the determination of MDLs in two matrices: reagent water and FGD wastewater. EPA’s FGD wastewater sample was a synthetic FGD water containing 12,000 mg/L of TDS.

ICP

- MS instruments are limited in the amount of TDS than can be introduced into the ICP plasma. EPA Method 200.8 states that the upper li mit if 0.2% or 2,000 mg/L TDS 39 . Higher TDS levels will cause physical interferences and inaccurate results. To analyze samples with higher TDS, the sample can be diluted prior to injection, or the instrument can be equipped with a high solids introduction system that uses gas to reduce the amount of sample entering the plasma. In either case, sample dilution reduces the electronic signal for the target analytes and internal standards, raising the effective detection limit for the sample.

The laboratories i n EPA’s MDL study had to dilute samples more than specified by EPA to avoid problems with plasma suppression and matrix interference, which did not conform to the EPA’s Study Plan. Because sample dilution varied from lab to lab (TDS ranged from 1,200 to 6, 000 mg/L), the results are not comparable across laboratories. In calculating MDLs for the synthetic FGD water, the dilution factors should have been accounted for by normalizing the results to TDS.
EPA’s synthetic FGD water used in their study was much mo re dilute than actual treated FGD effluent samples analyzed during their MDL study. In fact, actual FGD treated wastewaters for most plant will require higher dilution, raising the MDLs and RLs of the analytical method. In addition, higher FGD wastewater r ecycle rates will result in higher TDS levels, which in turn will require even higher dilution to analyze the target metals accurately. Therefore the MDLs and RLs (QLs) for certain FGD wastewaters may be higher than the proposed limits for arsenic, seleniu m and mercury. EPA should adjust the effluent limitations guidelines for FGD wastewater to account for the impact of sample dilution on MDLs and RLs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 511 39 EPA. 2004. Method 200.8, Determination of Trace Elements I Waters and Wastes by Inductively Coupled P lasma

– Mass Spectrometry, Revision 5.4.
Comment Response:
As noted in response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 67, Method 200.8 contains text regarding the effects of high TDS levels and potential interferences. However, EPA notes th at this text has appeared in the method since its earliest versions (circa 1994), is based on the 1986 reference cited in the method, and reflects the capabilities of ICP

- MS instrumentation at that time, without the use of collision cell or dynamic reactio n accessories. More modern ICP/MS instruments do not have the same physical limitations with regard to TDS as were noted in 1986 and many instrument manufacturers provide “high solids” interface equipment that is expressly designed to address the TDS

conc ern. EPA’s data gathering efforts for this rule involved analyses by commercial laboratories that routinely use such interfaces.
Some of the laboratories in EPA’s MDL study diluted the synthetic FGD matrix more than other laboratories. Other laboratories did dilute the EPA

- provided solution by the factor of 2 described in EPA’s study plan. EPA did not “normalize” any of the MDL study sample results to TDS in its evaluation or use of those results because such normalization is not a routine aspect of the published MDL procedure. However, laboratories do take into account the dilution of the sample in reporting results from actual field samples, including raising the detection limit to account for the dilution factor.
EPA notes that the monthly limit for arsenic of 8 μg/L (based on chemical precipitation treatment of FGD wastewater) is 4 times the highest minimum level (ML) for arsenic from any of the laboratories in the EPA MDL study (2 μg/L). The MDL values from the other laboratories in the EPA MDL st udy were considerably lower. For example, the ML resulting from the pooled laboratory results yields a ML of 1 ug/L; at least one laboratory participating in the MDL Study obtained a ML of 0.2 ug/L which is an order of magnitude lower than the maximum valu e from the study. Similar results were obtained for selenium. The highest ML for selenium from any of the laboratories in the EPA MDL study was 5 μg/L. The pooled pooled laboratory results yields a ML of 2 ug/L, and the lowest ML was 0.5 ug/L

– again, an order of magnitude lower than the maximum value from the study. These ML results demonstrate that focusing on the maximum ML is a very conservative approach that fails to acknowledge that most other labs actually can measure pollutant concentrations at low er levels, in some cases substantially lower. This means that even if a sample needed to be diluted further because of particularly high TDS concentrations, laboratories would be able to measure pollutant concentrations at the levels necessary to demonstra te compliance with the effluent limitations. The ability of laboratories to measure pollutant concentrations at low levels, despite the TDS present in FGD wastewater samples, is illustrated by the effluent data showing arsenic and selenium (as well as othe r pollutants) quantified at low levels for the EPA sampling, CWA 308 sampling, and industry self

monitoring data presented in DCN SE05733 and SE06277. Also see the data for the Mountaineer Plant, submitted by AEP in March 2014. EPA also notes that in pilot study of an FGD wastewater treatment system at IPL’s Petersburg plant, where TDS ranged as high as 27,000Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 512 ppm, the laboratory was able to quantify the low effluent concentrations of arsenic (averaging 1.4 ug/L).
MDL and ML values are laboratory

- specific, thus facilities with high TDS levels should to contract with laboratories with appropriate instrumentation and relevant experience in the analysis of FGD wastewaters. As noted in response to other comments, dischargers can and should provide appropriate g uidance to any internal or external laboratories performing analyses. In this instance, such guidance would include any existing data on TDS in the FGD matrix, as well as limits on the extent of dilution that would be acceptable for demonstrating complian ce with the ELG.

Commenter Name: Lisa Carty Commenter Affiliation: Xcel Energy Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4458

- A1 Comment Excerpt Number: 36 External Review Flag: No External Review External Review Incorporated into Response: No

Com ment Excerpt:
The ELG is based on improper analytical methods and fails to take into account detection limits.
The analysis of arsenic (As) and selenium (Se) by inductively coupled plasma (ICP) and ICP/MS (mass spec) are known to be biased in the waste s treams being addressed in the proposed ELG rules, especially at the proposed microgram (μg/l) and nanogram per liter (ng/l) levels. The bias is noted in a paper prepared for the World of Coal Ash (WOCA) Conference held in May of 2011 that all methods devel oped for analytical determinations of trace contaminants in environmental samples are subject to physical, chemical, and /or spectral interferences. This 2011 paper also references the EPA documented estimates that ICP and ICP/MS trace metal analysis from just the basic spectral interferences are and can impact a potential false positive or false negative bias on the reported results. Arsenic data is estimated by the EPA to encounter a 25 to 50 percent false positive rate even when the method quality contr ol (QC) is acceptable.
A review of the two Standard Operating Procedures (SOPs) drafted by the EPA in conjunction with two instrument manufacturers have been designed to specifically address the trace element analysis in FGD wastewaters; which are known to contain high levels of dissolved salts. The preparations of synthetic FGD solutions are used to conduct the study. The SOPs are written to be used with specialized instrument configurations/accessories that are designed to mitigate but cannot eliminate th e effects of these and other potential sample interferences. The SOP being referenced for comment is employing the instrument or a similar model being used by some laboratories; however additional costs will be incurred for instrumentation upgrades and tra ining; not including the expected rise in costs related to actual instrument maintenance, due to the effects of the sample matrices. Further costs will be incurred in the sampling processes; toEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 513 include the addition of sampling containers, preservatives, c ollection of additional QC samples, and potential shipping costs of the samples to the laboratory.
A review of the method detection limit (MDL) study shows the MDL for arsenic from a 2 μg/l spike into the FGD solution of 0.61μg/l; it is not general practic e for laboratories to report to the MDL without qualifying the data due to the uncertainty when approaching the MDL. Many laboratories use reporting limits (RLs) to report results as opposed to the MDL. The EPA allows the statistically determined MDL to be multiplied by a factor as high as 10 times which in this case will result in a reporting limit of 6 μg/l for arsenic and 3 μg/l for selenium. The calculation of the MDL for the study indicates that the spiked amount is too high to provide a realistic view of the actual instrument performance as it relates to the proposed limits in the ELG rule; hence providing misleading information as to the effectiveness of the actual instrument performance when dealing with the difficult matrix. This has been addressed in the SOP by stating that the values are examples, and not method requirements. Comparing the MDL studies for the two manufactures shows the decrease in the MDL with the use of a 40 μg/l spike amount resulting in a 3 μg/l for the RL.

In conclusion the a bility of the proposed analytical techniques and instrumentation to provide data that is of known quality is not possible given the difficulty of the matrices, the known background issues, and the admission by the EPA that the results for arsenic can have a 25

– 50 percent false positive rate with acceptable method quality control.
Comment Response:
EPA recognized the risks of interferences from FGD matrices, and this was the main reason for development of the FGD collision cell procedure. The procedure contains substantial additional quality control measures that are designed to ensure accurate determination of arsenic, selenium and other elements in FGD wastewaters. The commenter cites a 2011 presentation from the World of Coal Ash conference. Despite the lack of other relevant information, including the name of the author, EPA identifies the intended citation as Rago and Breland, “Evaluation of Inductively Couple Plasma (ICP) False Positives for Arsenic and Trace Metals Analysis in Coal Ash and Coal A sh Media.” After reviewing that presentation, we note that the authors never present any data on false positive or false negative rates at all. Rather, they cite two other documents as containing statements from “EPA” that purportedly list such rates. T he Rago and Breland presentation actually presents data that indicates that ICP results (without an MS detector) are “statistically higher” than the corresponding ICP/MS results on the same samples. They conclude that the interelement correction factors u sed in ICP instruments “may not adequately compensate for very high native aluminum concentrations” in the coal ash samples analyzed. These findings are not surprising and are one of the reasons that EPA did not pursue ICP analyses of the FGD wastewaters, in favor of the use of ICP/MS with collision cell instead.
The statements that the commenter attributes to “EPA” regarding false positive and negative rates appear to be drawn from two 2001 sources at EPA Region 4. EPA has not been able to confirm the s tatements cited by Rago and Breland from those 2001 sources. However, EPA notes that one of the statements clearly had nothing to do with either coal ash or FGD wastewaterEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 514 analyses, as these matrices are not analyzed by laboratories with EPA contracts as part of the Superfund Contract Laboratory Program. Lacking more specifics from the commenter, EPA surmises that the claimed false positive and negative rates quoted are simply more general assessments of the effects of spectral interferences on ICP and IC P/MS without the use of collision cell equipment. As noted elsewhere, these known types of interferences were what lead EPA to pursue the use of collision cell ICP/MS in the first place. To characterize any of those statements as “an admission” by EPA su ggests that the commenter is taking information completely out of context from a secondary source that they have not actually examined.
As noted in response to other comments, EPA agrees that Method 200.8 does discuss the effects of high TDS levels and pot ential interferences. However, EPA notes that this text has appeared in the method since its earliest versions (circa 1990) and reflects the capabilities of ICP

- MS instrumentation at that time, and without the use of collision cell or dynamic reaction

acc essories. Since the time of those early versions of Method 200.8, instrument manufacturers have developed and sold various “high solids” accessories that are designed to address this issue. Combined with the capabilities of the collision cell or dynamic reaction accessories, modern instrumentation is capable of monitoring the regulated analytes at the levels needed to demonstrate compliance with the effluent limits.
In estimating the cost of compliance with the rule, EPA factored in costs for the use of collision cell or dynamic reaction cell equipment when performing ICP/MS analyses of FGD wastewater samples. However, EPA disagrees that any additional costs are involved for “sampling containers, preservatives, collection of additional QC samples, and po tential shipping costs of the samples to the laboratory” beyond those associated with any compliance monitoring effort. Based on its own sampling activities in preparation of the rule, EPA is not aware of any characteristics of FGD wastewaters that requir e additional costs beyond the fact that the FGD wastewater must be sampled.
Regarding the commenter’s citation of an MDL for arsenic of 0.61 μg/L, EPA suspects that the commenter is actually referring to the arsenic MDL result provided in the draft collision cell procedure, and not to the a multi

- laboratory MDL study that EPA conducted in 2012. That MDL study generally yielded much lower single

- laboratory MDL values, and a pooled (across laboratories) MDL for arsenic of 0.35 μg/L.
Contrary to the c ommenter’s assertion, EPA does not “allow” the MDL to be multiplied by a factor as high as 10 in deriving the reporting limit termed the “minimum level of quantitation” or “ML.” Rather, it is the standard deviation underlying the calculated MDL that is mu ltiplied by a factor of 10. As noted in the 2012 MDL study, the pooled MDL value for arsenic was 0.35 μg/L, which yields a pooled ML of 1.0 μg/L after appropriate rounding. The maximum MDL for arsenic determined in that study was 0.80 μg/L, which yields a maximum ML of 2.0 μg/L after appropriate rounding. The spiking concentrations used by the laboratories in the 2012 study were within the expected range of the results for the single

- laboratory MDL values as well.
EPA stands by its conclusions about the ability of the collision cell or dynamic reaction cell procedures to produce valid results for arsenic and selenium in FGD wastewaters relative to the final ELGs.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 515 Commenter Name: Raven Power Holdings, LLC Commenter Affiliation: Raven Power Holdings, LL C Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4467

- A1 Comment Excerpt Number: 28 External Review Flag: Engineering, Statistics External Review Incorporated into Response: No
Comment Excerpt:
EPA proposed daily average limits of 6 μg/l for arsenic and 10 μg/l for selenium. EPA has also recognized the matrix interferences resulting in positive bias in FGD wastewaters when analyzing for low

- level compounds 4 and in the June 7, 2010 Hanlon memo (excerpt below) to EPA Region Water Division Directors, recogni zed that FGD sampling may require labs to alter analytical methods and the need for experienced labs and analysts.

It is essential that the Director make permitting decisions based on sufficiently sensitive data and, thus, sound science. The use of insuffi ciently sensitive analytical methods could lead the Director to make an incorrect determination about the presence or absence of a pollutant in an applicant’s discharge. These assumptions, in turn, could result in the Director making an incorrect permittin g decision. Additionally, requiring insufficiently sensitive analytical methods in permits for compliance monitoring purposes could result in an undetected exceedance of permit limits.

Due to advances in instrumentation since a method was developed and the benefit of experienced analysts, an analyst may achieve detection limits (MDLs) and minimum levels (MLs) lower than the published values. Thus, the Director should not rely solely on sensitivity measures, such as MDLs or MLs, in published methods. These m easures only give an upper, not a lower, bound on capabilities. In addition, EPA provides analysts the flexibility to modify an approved method without EPA review . This flexibility allows a laboratory to demonstrate performance better than the published MD L or ML.
The lack of a sufficiently detailed and approved method to accurately and reliably analyze FGD wastewaters is problematic in light of the proposed low

- level limits proposed. In addition, the proposed limits are below the reporting limits laborato ries are typically able to achieve with the FGD matrix. High levels of TDS found in FGD wastewaters require sample dilution to protect sensitive laboratory equipment and to prevent both analytical and physical interferences. Dilution of the sample increase s the reporting limit of the analysis. Instrumentation vendors for inductively coupled plasma

– mass spectrophotometry (ICP

- MS) recommend sample TDS not to exceed 2,000 ppm. Without sample dilution and the resulting increase in reporting limits, repeatable and reliable results, along with achievement of matrix spike/matrix spike duplicate recoveries within specified method limits is questionable. Given an elevated TDS of 60,000 ppm, which is by far not the maximum TDS seen within the industry, and utilizing the necessary dilution to achieve a 2,000 ppm maximum TDS entering the instrument, the minimum reporting limit that can be achieved is 30 ppb for arsenic and selenium.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 516 Raven Power recommends that because there is not a sufficiently detailed and a pproved method to accurately and reliable analyze FGD wastewaters and that due to the elevated reporting limits caused by elevated TDS concentrations, EPA should revise the proposed FGD wastewater effluent limits and method 200.8 Standard Operating Procedu res (SOPs) for analyzing FGD waters.

4 USEPA, Steam Electric Generating Point Source Category: Final Detailed Study Report, [EPA

821

- R

- 09

- 008] October 29, 2009
Comment Response:
EPA notes that the monthly average limitation in the final rule for arsenic is 8 ug/L and the monthly average limitation for selenium is 12 ug/L.
EPA notes that the concerns raised by the commenter with regard to method sensitivity are the very reasons that lead EPA to work with industry representatives to develop the coll ision cell and dynamic reaction cell procedures. As noted in response to other comments, The record indicates that laboratories using modern instrumentation and the collision cell or dynamic reaction cell procedure can achieve detection and reporting lim its suitable for demonstrating compliance with the proposed ELG limits for arsenic or selenium.
The analytical methods already provide laboratories with certain flexibility options, as detailed in 40 CFR 136.6. In keeping with generally accepted laborator y practices, each laboratory undertaking FGD wastewater analyses should develop standard operating procedures specific to their laboratory setting and instrumentation and that they may base those procedures on information provided in the collision cell pro cedure developed by EPA, the dynamic reaction cell procedure developed by one of the instrument vendors, as well as information from other sources ( e.g. , industry and other instrument vendors), so long as the resulting laboratory procedure falls within the flexibility outlined at 40 CFR 136.6.

Commenter Name: Jay Hudson Commenter Affiliation: Santee Cooper Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4476

- A1 Comment Excerpt Number: 29 External Review Flag: No External Review External Review Incorporat ed into Response: No
Comment Excerpt:
Analyti cal MethodsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 517 Regarding EPA's mandated analysis requirements, we note that the complexity of these waste streams makes analysis very difficult, that necessary analytical equipment is very expensive, and that st affing will have to increase to account for increased laboratory volume due to ELG mandated sampling.
For metals analysis, traditional ICP

- OES analyses (Method 6010) is often impractical given interferences which necessitate dilutions that negatively impac t the reporting limit. An alternative technique is analysis by ICP

- MS (Method 6020). However, this technique is subject to polyatomic interferences for some elements (e.g., arsenic and selenium). These interferences must be dealt with in order to achieve the desired detection limits, necessitating use of an advanced ICP

- MS (e.g. collision cell technology). The cost of this instrument is approximately $200,000, and the method requires substantial analyst time for proper filtration,digestion and analys is of samples. This cost must be borne by the utility and its customers either in implementing these expensive methods internally or by using one of the few qualified contract laboratories with this capability.
Other analysis mandates would require similar ly high laboratory and analysis costs. Regarding nutrient analysis, use of ion chromatography (Method 9056A) for nitrate/nitrite is very challengi ng due to interferences . The superior alternative is the cadmium reduction method (Method 353.2). However, t his would require a $10,000 modification to an existing instrument. Given the increased number of oil and grease samples which may result from this regulation, it would be necessary to use EPA Method 1664 for this analysis which would necessitate purchase of additional instrumentation costing approximately $60,000.
The additional costs described above only address instrumentation for the analytes that will be newly controlled. However, additional testing will also be required to properly operate additional treatment processes mandated by the rule. These additional testing costs cannot be predicted at this time.
Substantial additional costs will also be incurred due to requiring a significant increase of analyst time. Additional staffing would be necessary to handle the influx of steam effluent samples generated.
Comment Response:
As noted in the proposed rulemaking and elsewhere in the responses to comments, EPA has always recognized that the waste streams subject to this rulemaking pose analytical challe nges. However, wastewater matrices from other regulated industries also present analytical challenges. Moreover, FGD wastewaters have been analyzed for non

- regulatory purposes for many years. EPA developed the collision cell and dynamic reaction cell pro cedures after extensive consultations with industry representatives, and effectively ruled out the use of ICP/OES for the analysis of metals, in favor of the combination of ICP/MS with the addition of the collision cell or dynamic reaction cell procedures.
As noted elsewhere in these comment responses, in estimating the cost of compliance with the rule, EPA included costs for laboratory analyses of the compliance monitoring samples and theseEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 518 costs reflect the use of collision cell or dynamic reaction cell equipment when performing ICP/MS analyses of FGD wastewater samples. The commenter makes reference to the need to acquire additional laboratory equipment due to this rule; however, EPA’s cost estimates are based on plants sending their samples to commercia l laboratories for analysis. Commercial laboratories already analyze FGD wastewater samples from a number of plants so the analytical capability exists at such laboratories.
EPA notes that the majority of the analytical methods cited by the commenter are f rom the SW

846 methods manual ( e.g. , 6010, 6020, and 9056a), and EPA notes that none of those methods were either proposed for use in this rulemaking, nor are any of those methods approved at 40 CFR part 136 for use in monitoring compliance with effluent g uideline limitations under the NPDES program. Thus, while the cited methods may bear some similarity to the actual approved method for wastewater compliance monitoring, their capabilities are immaterial to the rulemaking because they are not approved for use for CWA purposes.
The one method cited by the commenter that is approved at 40 CFR part 136 is Method 1664, where the actual approved versions are 1664A and 1664B. The commenter states that the increased number of samples to be analyzed for oil and gr ease as a result of the rulemaking would necessitate the use of “EPA Method 1664” and therefore require purchase of additional instrumentation. EPA disputes this contention because the rule does not include any new effluent limits on oil and grease, and t herefore, the rule cannot result in an increase in monitoring of oil and grease. Thus, EPA finds the commenters concerns about such costs unfounded.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Cont rol Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 18 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
EPA’s Method Detection Limits (MDLs) and Minimum Levels (MLs) for arsenic and se lenium may overestimate method sensitivity. The MDLs do not account for required dilution of high

solids FGD wastewater.
Comment Response:
See responses to EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 67.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI)Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 519 Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 76 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:
Additionally, there are analytical interferences associated with measuring sulfides in wastewaters when using the two most common methods for sulfide anlaysis (the colormetric method and the Iodometric Titration method). The potential interferences are provided in Standard Method s for the Examination of Water and Wastewater [Standard Methods, 2013]. False positives can occur in the wastewater and in the source water if the interferences are not corrected. Therefore, the data EPA used may be biased high.

In the Iodometric Titration Method (Standard Methods 4500

- S2

- F), the color change that the lab staff must note is subtle, and would be difficult to observe in a wastewater. In essence, the method is not useful below 1.0 mg/L. Furthermore, this method has a high bias (interference)

w hen other reducing substances are present, including thiosulfate, sulfite, and various organic compounds, both solid and dissolved.
The colorimetric method is biased high if the sample had turbidity or color. Interferences can be confirmed using the method of standard additions, which establishes a linear response factor for spiked aliquots of sample, or by including matrix spike samples as part of normal quality control.
Comment Response:
EPA is not establishing effluent limitations for sulfide in the EL Gs.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 89 External Review Flag: No External Review External Review Incorporated into Re sponse: No
Comment Excerpt:



### 9.1 EPA’s Method Detection Limit (MDL) study does not accurately represent the capability of EPA Method 200.8 with collision/reaction cell for analysis of FGD wastewater.

 Laboratories had to dilute samples more than specified by EPA, to avoid problems with plasma supression and matrix interference

 Actual FGD waters would require higher dilution, raising detection limitsEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 520 The impact of sample dilution should be accounted for in developing effluent limits that are based on MDLs/ML s. EPA determined the sensitivity of EPA Method 200.8 by inductively

coupled plasma mass spectrometry ( ICP

- MS) equipped with collision cell interference reduction from the results of a five

- laboratory method detection limit (MDL) study [EPA, 2012]. The st udy involved determination of MDLs in two matrices: reagent water and FGD water; EPRI’s comments relate to the FGD water results only.

ICP

- MS instruments are limited in the amount of total dissolved solids (TDS) that can be introduced into the ICP plasma. Method 200.8 states that the upper limit is 0.2% (2,000 mg/L) [EPA, 2004]; higher TDS will cause physical interferences and inaccurate results. To analyze samples with higher TDS, the sample can be diluted prior to injection, or the instrument can be equip ped with a high solids introduction system that uses gas dilution to reduce the amount of sample entering the plasma chamber. In either case, sample dilution reduces the electronic signal for the target analytes and internal standards, raising the effectiv e detection limit for the sample.
EPA’s sample matrix was a synthetic FGD water containing 12,000 mg/L of TDS. Labs were instructed to first spike the EPA solution with the target analytes and then dilute the solution by two times, to a TDS of 6,000 mg/L. The diluted solution was considered the reference matrix for the study [EPA, 2012].
The laboratories in EPA’s MDL study used various approaches to analyze the synthetic FGD solution, which did not all conform to the EPA’s Study Plan.

 Test America first diluted the EPA solution by two times, then spiked with 1 ug/L of each element (except As and Pb, which were present as contaminants in the sample). They then diluted the spiked solution by an additional two times to avoid plasma suppression (to 3,000 mg/L TDS and an element concentration of 0.5 ug/L) [Test America, 2012]. It appears that this lab did not use a high solids introduction system (dilution gas = 0).

 Southwest Research Institute first diluted the EPA FGD solution by five times, then spiked at 1 ug/L, then diluted the spiked solution by a further two times (to 1,200 mg/L TDS and 0.5 ug/L of each target element), to avoid interference from the FGD water matrix on selenium. It appears that this lab did not use a high solids introduction system [So uthwest Research Institute, 2012].

 Several other laboratories injected the reference matrix directly into instruments equipped with high solids introduction systems; Perkin

- Elmer reported a gas dilution factor of 3 [Perkin

- Elmer, 2012]. The dilution factor s for the other labs were not stated.
Because sample dilution varied from lab to lab (TDS to the plasma ranged from 1,200 mg/L to 6,000 mg/L), the results are not comparable across labs. In calculating MDLs for the synthetic FGD solution, the dilution fact ors should have been accounted for by normalizing the results to TDS.
EPA’s synthetic FGD solution is much more dilute than most treated FGD effluent samples analyzed by EPA or EPRI. Figure 9

- 1 illustrates this point: EPA’s synthetic FGD water reference

ma trix is shown on a cumulative distribution plot of mean TDS concentrations in 25 actual FGD water treatment system effluents

— 19 from a recent EPRI study [EPRI, 2012] and 6 from EPA’sEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 521 site visits. The EPA synthetic FGD water (6,000 mg/L) is at the 10th perc entile of the distribution. In EPRI’s study, which used a synthetic FGD water at about the 50th percentile of TDS (17,000 mg/L), labs typically diluted the sample by 20 times to avoid analytical issues.
Due to the TDS discrepancy between actual samples and EPA’s matrix, laboratories will see higher reporting limits for many FGD samples than the Minimum Levels (MLs) calculated from EPA’s MDL study. This will be true even for laboratories using high solids introduction systems. The high reporting limits will impact power plant owners’ ability to monitor accurately at the proposed numerical effluent limits for arsenic and selenium in high

- TDS waters. The impact of the required sample dilution should be taken into account in developing effluent limits that are b ased on MDLs/MLs.

Comment Response:
As noted in response to other comments, EPA disagrees that the proposed FGD limits are based on MDLs/MLs. The data used to establish the effluent limitations are described in DCNEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 522 SE05733, as were the statistical pro cedures used to develop those numerical limits. Also see TDD Appendix B.
While EPA agrees that dilution will affect the sensitivity of any method for a given sample, EPA notes that the limitations imposed by TDS that are described in EPA Method 200.8 date to the early 1990s and do not reflect the capabilities of newer instrumentation.
EPA acknowledges that the laboratories in the 2012 MDL study utilized various approaches to analyze the synthetic FGD solution, however, the EPA study plan did not preclude t he use of those approaches, and none were outside of the realm of typical approaches to addressing challenging matrices. As noted by the commenters, several laboratories used instruments equipped with high

- solids introduction systems and successfully anal yzed the samples. EPA does not agree that the resulting MDLs need to be adjusted to include the “dilution” inherent in the use of such devices.
As noted in response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 95, the results from the MDL Study and the effluent data in the record demonstrate that plants will be able to measure pollutant concentrations at the levels needed to show compliance with the effluent limitations.
MDL and ML values are laboratory

- specific, thus facilities with high TDS levels need to contract with laboratories with appropriate instrumentation and relevant experience in the analysis of FGD wastewaters. As noted in response to other comments, dischargers can and should provide appropriate guidance to any internal or external la boratories performing analyses. In this instance, such guidance would include any existing data on TDS in the FGD matrix, as well as limits on the extent of dilution that would be acceptable for demonstrating compliance with the ELG.

Commenter Name: P aul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Number: 90 External Review Flag: No External Review External Review Incorporated into Response: No

Comment Excer pt:



### 9.2 EPRI concurs with EPA’s recommendation to use ICP

- MS with interference reduction technology to measure non

- mercury metals in FGD treatment system effluents, but more detailed guidance is needed for laboratories to successfully analyze FGD waters.

Multilaboratory studies conducted by EPRI have determined that the target metals can be accurately analyzed in FGD waters using either collision/reaction cell or dynamic reaction cellEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 523 ICP

- MS [EPRI, 2009; EPRI, 2012]. Analysis with instruments not equippe d with interference reduction will lead to extremely high biased results for some metals. EPA’s Standard Operating Procedure (SOP) for collision cell ICP

- MS is a helpful start to provide guidance to laboratories in the use of interference reduction techniq ues with FGD water samples. However, there are details of the sample preparation and instrument operation that are critical to obtaining accurate results on FGD waters but are not addressed in EPA’s SOP. EPRI has prepared two guidance documents to suppleme nt EPA’s SOP and Method 200.8, which are attached to these comments as Appendix F. We recommend that the information in EPRI’s guidance be incorporated into future EPA SOP revisions.
Comment Response:
EPA appreciates the commenter’s general support of th e use of either the collision cell or dynamic reaction cell procedures. EPA has reviewed the additional guidance prepared by EPRI and agrees that it may be useful to laboratories, but does not agree that the information needs to be included in the SOP dev eloped by EPA. The SOP was prepared as guidance to laboratory analysts, with the expectation that the laboratory would use the SOP along with their protocols to develop their own laboratory

- specific SOP. To the extent that the EPRI guidance is useful to th e laboratories, they may also incorporate that information into their lab

- specific SOPs.

Commenter Name: Paul Chu Commenter Affiliation: Electric Power Research Institute (EPRI) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1 Comment Excerpt Numb er: 91 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:



### 9.3 The MDL and ML are poor indicators of method performance. Alternate measures of detection and quantitation are needed.

In 2007, EPA compl eted an extensive study of alternatives to the MDL procedure, under the auspices of a Federal Advisory Committee on Detection and Quantitation (FACDQ). After extensive pilot testing and issuance of the final report [FACDQ, 2007], EPA decided not to move ah ead with the recommendations of the Committee. Nevertheless, the shortcomings of the current Part 136, Appendix B procedure remain

— such as the failure to take long

- term instrument and operator variability into account, lack of a requirement that MDLs be de termined in the matrix under consideration, and statistical issues related to the relationship between spiking level and standard deviation. EPRI encourages EPA to reingage with the laboratory community and other interested parties to address these issues.
Comment Response:Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 524 EPA notes that independent of the steam electric rulemaking, EPA has continued to work with representative laboratory trade groups and others to refine the method detection limit procedure. Effort such as those revisions are outside of the scope of this rulemaking.

Commenter Name: Tom DeLawrence Commenter Affiliation: Public Service Company of New Hampshire(PSNH) Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4633

- A1 Comment Excerpt Number: 65 External Review Flag: No External Rev iew External Review Incorporated into Response: No
Comment Excerpt:
EPA proposes to require that compliance with effluent limitations must reflect results obtained from “sufficiently sensitive” analytical methods. 78 Fed. Reg. at 34524. A “sufficiently

s ensitive” method is defined as “a method that ensures the sample

- specific quantitation level for the wastewater being analyzed is at or below the level of the effluent limitation.” Id. This Proposed Rule would require the use of methods with quantitation l evels low enough to measure the pollutant level in a facility’s discharge, the effluent limit in an NPDES permit, or water quality criteria. However, where there are methods approved in 40 C.F.R. Part 136, the rule encourages monitoring by some unapprove d “sufficiently sensitive” method. This provision might allow permitting agencies to use unapproved methods outside EPA’s Alternative Test Procedure (ATP), which would not account for precision, accuracy or any of the procedural safeguards in the ATP progr am.
Measurements of water pollutants must be based on reliable and well

- defined analytical methods. EPA’s present method for calculating detection and quantitation levels is unsatisfactory. As EPA is well aware, laboratories have struggled for decades to meet detection limits specified by EPA even under approved methods. See, e.g., 75 Fed. Reg. 15500, 15516 (Mar. 29, 2010). In response to numerous complaints regarding the shortcomings of EPA’s method detection limits (MDL), EPA convened a Federal Advisory Committee in 2007, which found that the current MDL procedure had deficiencies that should be corrected. However, to date, none of the Committee’s recommendations for correcting the MDL deficiencies have been accomplished. If EPA is going to require the us e of “sufficiently sensitive” methods, EPA should also require that only EPA

- approved methods, if available, should be used. Stated differently, the “sufficiently sensitive” rule should apply only to choosing from among methods in 40 C.F.R. Part 136. We re quest that EPA state this in the actual rule and not just in the Preamble.
Nevertheless, use of sufficiently sensitive monitoring methods should not be required. Many of these methods are unnecessarily complicated and would not only increase lab costs, b ut they could also require long waiting times for the results, which could create problems with filing DMRs on time. For instance, for flow minimization techniques for FGD waste water (i.e., recycling to maximum chloride level), the TDS levels are sometime s so high (due to recycling) that the laboratory would have to dilute the sample to 0.02% in order to be able to analyze itEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 525 using the most sensitive method for metals determination, Method 200.8, due to instrumentation constraints.
EPA erroneously conclude d that the Proposed Rule will cause little increased burden to applicants or permittees. Any rule that requires the use of more sensitive methods, particularly experimental and unapproved test methods will increase the cost of analyses required by the perm its. Such cost increases include the research and development required to run a non

approved method and the cost to purchase the advanced equipment needed to run more sensitive methods. For example, the cost of Method 1668C for PCBs is estimated to cost $ 1,000 per sample.
In sum, before EPA makes any “sufficiently sensitive” rule final, the Office of Management and Budget should conduct a full review of the potential impacts of the rule and EPA should address the recommendations of the Federal Advisory Committee it created. EPA should also set measurement quality performance objectives to ensure the objectivity of scientific information and processes. Moreover, EPA should only require the use of sufficiently sensitive methods if EPA eliminates the intern al effluent limitations and continues to allow commingling of waste streams. If internal effluent limitations are implemented, then there is no need for extra sensitive and more expensive monitoring methods.
Comment Response:
The final rule does not requ ire permittees to use EPA

- approved analytical methods that are sufficiently sensitive to provide reliable, quantified results at levels necessary to demonstrate compliance with the final effluent limitations and standards because another recently promulgat ed rule already accomplishes this. As public commenters pointed out, EPA was conducting a rulemaking on that topic; and, in August 2014, EPA published a rule requiring the use of sufficiently sensitive analytical test methods when completing any NPDES perm it application. Moreover, the NPDES permit authority must prescribe that only sufficiently sensitive methods be used for analyses of pollutants or pollutant parameters under an NPDES permit where EPA has promulgated a CWA method for analysis of that pollut ant. That rule clarifies that NPDES applicants and permittees must use EPA

- approved analytical methods that are capable of detecting and measuring the pollutants at, or below, the applicable water quality criteria or permit limits.
Regarding the method det ection limit comments and the need for “unnecessarily complicated” methods and the need to dilute samples, see the responses to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1, Excerpt Number 89; EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, Excerpt Number 67; and EPA

- HQ

- OW

- 2009

- 0819

- 43 79

- A1, Excerpt Number 95. However, EPA disputes that the fact that samples must be diluted will “require long waiting times for results.” In fact, as noted in response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4305

- A3, using knowledge of the effluent composition, the p ermittee may need to adjust their contracting strategy to ensure that appropriate dilutions are analyzed and that multiple dilutions may be necessary. However, once that fact is known to a well

- run laboratory, the “waiting times” for results should not exc eed those encountered for other existing regulatory analyses, nor affect timely filing of discharge monitoring reports (DMRs).Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 526 EPA is not promulgating revisions to the effluent limitations for PCBs in this rule.

Commenter Name: Elizabeth E. Aldridge, Hu nton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 44 External Review Flag: Analytical External Review Incorporated into Response: No
Comment Excerpt:

a. Sulfides Issues with the Titri metric Procedure
There are several methods for analyzing sulfide. The two most commonly used EPA

- approved methods are the titrimetric procedure (EPA 376.1 or the more detailed Standard Methods 20 th Edition SM

- 4500

- S2

- F) and the methylene blue colorimetric procedure (EPA 376.2 or the more detailed Standard Methods 20 th Edition SM

- 4500

- S2

- D). For either method, the Standard Methods reference highly recommends performing the interference removal procedures described in Standard Methods 20 th Edition SM

- 4500

- S 2

- C, because both methods are highly susceptible to interferences.
Judging from the very high detection limits for most of the EPA sulfide data (1 mg/L or higher), it is likely that many facilities used EPA Method 376.1 for the Form 2C data. Method 376.1 measures any material that will react with and be oxidized by iodine. In Standard Methods (SM

4500

- S2

- F), it is recommended that this method be used only if sulfide is known to be present above 1 mg/L and interferences are either absent or can be effecti vely removed by SM

- 4500

- S2

- C.

Iodine demand (the reaction of iodine with water constituents) is similar to chlorine demand, as iodine and chlorine are similar oxidants in water. Even deionized water has iodine demand. Iodine reacts with any organic mater ial and also with any reducing material such as sulfites, particularly metals with varying oxidation states like iron and manganese, both of which are found in ash pond discharges. All will register as positive sulfide interferences. The EPA version of t he iodine titration method, 376.1, while acknowledging high detection limits (and recommending Method 376.2, the colorimetric method, for values <1 mg/L), is an abridged extraction from the Standard Methods method, with only a limited description of potent ial interferences.
The sample preservation and interference removal process for both the colorimetric and iodometric methods is to precipitate the sulfide using zinc acetate and sodium hydroxide. 13 The sample is then filtered to remove the precipitate. If using the iodine titration method, the material on the filter is then re

- solubilized in an acid

- iodine solution, at which time the iodine reacts with any acid soluble reducing agents (including sulfide). The remaining iodine is thenEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 527 back

- titrated with so dium thiosulfate. The iodine missing from the back

- titration is assumed to have reacted with sulfide.
However, in the case of ash pond discharge, significant particulate metals (EPA has estimated 30 mg/L TSS) will be caught on the filter to react with the acid/iodine. Also, dissolved Mn +2 and ferrous iron (the most common forms) are present. These metal interferents would not be removed by the described process. Instead, both would precipitate as hydroxide by the sodium hydroxide and be caught on the fi lter. Therefore, they would be available to react with the acid/iodine and would be misidentified as sulfide.

b. Sulfides Methods Issues: Method 376.2 and SM4500

- S2

- C and

– D

The colorimetric methods 376.2 and the 20 th Ed. SM

- 4500

- S2

- D method from which i t is adapted have much lower detection limits, but they also have other types of interferences (most notably sample turbidity) and are considerably more difficult to run. The colorimetric sulfide test is generally superior to the iodometric titration meth od, which is largely useful only to standardize the sulfide standard so that the colorimetric method can be performed. The colorimetric method has a much lower reporting limit (0.05 mg/L) and is far more specific for sulfide.
It is not without its problem s, however. The titration method is relatively easy to use in the field. Ease of use in the field is critical because, unless preserved, sulfides must be measured immediately. Even with preservatives, the holding time is relatively short. In fact, EPA Method 376.2 does not discuss preservation and simply states that analysis must begin immediately. (Standard Methods says samples may be preserved with zinc acetate and sodium hydroxide but does not specify a holding time.) Essentially the laboratory mus t be set up to run Method 376.1 (the iodometric titration) as well as the colorimetric procedure, since the titration is needed to standardize the stock sulfide standard solution. A fresh standardization and calibration curve must be generated each day.

T here are several types of possible interferences with the colorimetric method. The TSS content causes high readings, since TSS cannot be removed without also losing the sulfide preserved as precipitated zinc sulfide. Reducing agents such as thiosulfate c an interfere with color development. Sulfide itself, when present in concentrations higher than 20 mg/L, may inhibit color development or prevent it altogether at higher concentrations. Sometimes the color reagent forms a precipitate in some samples, whi ch also would be read as color if not detected. Obviously, if a sample forms a precipitate, this must be observed by the technician (automated color measurement will not detect this), or else a positive interference will occur. A sample with precipitate might be used if filtered or centrifuged to measure the characteristic blue color, but the results could be questionable, depending on color absorption onto the filter (low) or else fine particulate passing through the filter (high).

For the reasons stated above, UWAG recommends that EPA remove all of the sulfide data from its analytical database. Given the flawed sulfide data and the lack of information on test methods for most of these data points, the Form 2C data are not appropriate as a basis for regu lation. InEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 528 the presence of dissolved oxygen (DO), sulfide generally will not be generated and, if generated, will not persist for long.

13 Samples not preserved can be measured in the field within 15 minutes, but the interference removal step must be skipped. In this case, the sampler must know sulfide is present while interferences are relatively absent, such as in a sulfur well.
Comment Response:
EPA is not establishing ELGs for sulfide in this rule.

Commenter Name: Elizabeth E. Aldridge, Hunto n & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 96 External Review Flag: Analytical External Review Incorporated into Response: No
Comment Excerpt:
6. Issues with EPA’s Use of Cyanide Data
a. EPA Used Invalid Cyanide Data in Calculating TWPEs
All of EPA’s cyanide data are invalid because of the potential interferences with the analytical method as well as the chemical (sodium hydroxide) used to preserve the samples. EPA should not use these data for any purpose, including calculating TWPEs and TWPE removals.
EPA used Standard Methods, Method 4500 CN E, a colorimetric pyridine

- barbituric acid procedure. This method has numerous interferences, especially in complex sample matrices. This method, as well as other cyanide methods, were originally designed for use with discharges from metal plating facilities where cyanide was known to be present. Most of the interferences result in false positives, and many of these interferences are cause d by sulfide and other reduced sulfur compounds that may be present in FGD wastewater. Other compounds that can cause false positives under the right conditions are organosulfides, thiosulfates, nitrates, and other nitrogen compounds. Some of these compo unds can actually cause cyanide to be produced during the acid distillation procedure of the method. The procedures for removing interferences, as provided in the methods, are often not effective, and complex samples, such as FGD wastewater, may also cont ain unknown interferences. It is entirely possible that most

– if not all

– of the reported cyanide detections could be sample matrix interferences.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 529 The laboratory analyzing EPA’s samples for cyanide reported interferences that are discussed in the data n arratives to the SERs. See, e.g. , EPA

- HQ

- OW

- 2009

- 0819

- 0885.03. The laboratory diluted most of the FGD wastewater samples 1 to 10 before even proceeding with the cyanide distillation. In doing so, this raised the reporting limit for cyanide from 0.01 mg/ L to 0.1 mg/L. Most of the FGD wastewaters analyzed had slight detections of cyanide very close to the reporting limit of 0.1 mg/L; these most likely were the result of positive interferences. The laboratory reported:

 poor to no recovery of cyanide in ma trix spikes;

 detections in laboratory reagent blanks that, when multiplied by the 10 dilution factor, represented a substantial portion of the reported concentration in the samples; and

 poor reproducibility in the field duplicates.
In one instance, a very high detection of cyanide in a Miami Fort sample could not be confirmed; a field duplicate of that sample was less than the reporting limit. These issues were likely due to the difficult FGD matrix and likely interferences in the tests.
The table below pr ovides the cyanide data EPA used to calculate TWPE removals for chemical precipitation and for chemical precipitation plus biological treatment. All of the cyanide data are qualified by the laboratory due to one or more of the following reasons:

1. Cyanide s amples were not preserved immediately upon collection as required by the method and were not analyzed within the holding time as required by the method, 2. Cyanide measurements were less than the MDL, 3. Cyanide measurements were less than the RL or quantificati on limit, 4. MS (matrix spike) and/or MSD (matrix spike duplicate) were not within laboratory control limits, or 5. Cyanide was found in the blank.
Summary of EPA’s Cyanide Data Included in EPA’s TWPE Removal Calculations

Plant Sampling Point Average Concentration, mg/L (with qualifying flags) EPA’s Qualifications of

Analytical Results

Allen SP

- 1, Days 1

- 4 0.26 B CN was found in the blank for one day.

Allen SP

- 3, Days 1

- 4

and Monthly 1

- 4 0.12 B, F, J 2

Belews Creek SP

- 1, Days 1

- 4 0.042 U, F, J 1

Belews Creek SP

- 3, Days 1

- 4

and Monthly 1

- 4 0.044 U, J, F 1

Dickerson SP

- 1, Days 1

- 4 0.95 B CN was found in the blank for two days.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 530 Plant Sampling Point Average Concentration, mg/L (with qualifying flags) EPA’s Qualifications of

Analytical Results

Hatfield’s Ferry SP

- 1, Days 1

- 4

(liquid and solid phases separated and analyzed separately) 44 H, P Samples not preserved directly following collection. Analyzed 23

- 25 days past the holding time required by the method.
Hatfield’s Ferry SP

- 2, Days 1

- 4

and Monthly 1

- 4 0.18 J, F MS and/or MSD not within laboratory control limits.

Keystone SP

- 1, Days 1

- 4

(liquid and solid phases separated and analyzed separately) 109 H, P Samples not preserved directly following collection. Analyzed 7

- 10 days past the holding time required by the method.

Keystone SP

- 2, Days 1

- 4

and Monthly 1

- 4 0.16 B, J, U 1

Miami Fort SP

- 1, Days 1

- 4

(li quid and solid phases separated and analyzed separately) 107 H, B, P Samples not preserved directly following collection. Analyzed 13

- 16 days past the holding time required by the method.

Miami Fort SP

- 2, Days 1

- 4

and Monthly 1

- 4 3.3 B, C, J, F 2

Pleasant Prairie SP

- 1, Days 1

- 4 0.24 CN was found in the blank for all 4 days.

Roxboro Settling Pond

Effluent None No CN data measured.

EPA should not have used these cyanide data for any purpose, given these analytical issues.

EPA has encountered problems with this cyanide test in other ELG rulemakings. In the proposed MP&M ELG rule, EPA proposed to use all reported cyanide results including those for non

cyanide processes, which inappropriately predicted and exaggerated high TWPE removal for the treatment options. EPA corrected this error in the final rule by eliminating use of cyanide detection from industrial wastewaters not associated with cyanide plating or other cyanide operations. MP&M Development Document at 12

- 5. Similarly, FGD scrubber systems do not use any materials or chemicals having cyanide constituents, and any measured results show all the symptoms of known interferences for this test.
In addition, it is highly unlikely that cyanide exists in FGD wastewater purge from limestone f orced oxidation systems. Cyanide compounds are generated in reducing environments and destroyed in oxidizing environments ( e.g. , an LSFO absorber, especially one operated to produceEffluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 531 saleable gypsum). Cyanide compounds are volatile in an acidic environmen t such as an FGD absorber. Therefore, from a theoretical chemistry standpoint, cyanide should not be present in FGD wastewater.
Comment Response:
See the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4379

- A1, Excerpt Number 66.

Commenter Name: Elizabeth E. Aldridge, Hunton & Williams Commenter Affiliation: UWAG Document Control Number: EPA

- HQ

- OW

- 2009

- 0819

- 4655 Comment Excerpt Number: 134 External Review Flag: No External Review External Review Incorporated into Response: No
Comment Excerpt:

A. Collisi on Cell Analysis of FGD Wastewater
EPA has done a study to develop MDL data for the collision cell procedure ( i.e. , analysis by EPA Method 200.8 by inductively

- coupled plasma mass spectrometry (ICP

- MS) equipped with collision cell interference reduction eq uipment. Multiple laboratories participated in the study, with the purpose of deriving corresponding Minimum Levels, or quantitation limits, to support EPA’s efforts to regulate discharges from FGD systems. EPA derived the Minimum Levels using procedures published in the Federal Register on March 12, 2003 (68 Fed. Reg. 11,770). See Study Plan for Developing Method Detection Limits and Minimum Levels of Quantitation for Selected Analytes Using EAD’s Draft Collision Cell ICP/MS Procedure (July 24, 2012), E PA

- HQ

- OW

- 2009

- 0819

- 0575.
EPA’s contractor CSC recommended using the maximum MDL and ML as regulatory limits:
For the purpose of developing effluent limitations guidelines and standards for discharges of FGD wastewater, CSC recommends that EAD use the maxim um MDL and maximum ML values for the FGD matrix. The maximum values are the “worst

- case” results for each of the target analytes from the MDL study, meaning that the other laboratories in the study were able to achieve better sensitivity. The data from t his study illustrates that all of the laboratories in this study (which were all identified as well

- operated laboratories with experienced staff and operating the appropriate analytical instrumentation) could achieve MDL values at least that low, and the m aximum ML values represent the corresponding quantitation limits from the study.
CSC, Results of the ICP/MS Collision Cell Method Detection Limit Studies in the Synthetic Flue Gas Desulfurization Matrix (Jan. 16, 2013), EPA

- HQ

- OW

- 2009

- 0819

- 2116 at 5.Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category:

EPA’s Response to Public Comments

9

- 532 UWAG agrees with EPRI’s comments on EPA’s MDL study. EPA used a synthetic FGD wastewater for the study containing 12,000 mg/L TDS. Selecting just a single TDS level is not at all representative of FGD wastewaters within the industry. EPRI’s analysis shows th at EPA’s synthetic FGD wastewater is much more dilute than most treated FGD effluent samples analyzed by EPA or EPRI. EPRI compared EPA’s synthetic FGD wastewater to mean concentrations of 19 treated FGD effluent samples from a recent EPRI study and six s amples from EPA’s sampling program. The EPA synthetic FGD wastewater (6,000 mg/L, after dilution according to EPA’s instructions) is at the 10 th percentile of the distribution. In comparison, in EPRI’s earlier study, which used a synthetic FGD wastewater at about the 50 th percentile of TDS (17,000 mg/L), labs typically diluted the sample by 20 times to avoid analytical issues. Id.
For this reason and others detailed by EPRI, UWAG does not believe EPA’s MDL study is valid. 68 EPA should not use the MDL st udy for any purpose related to the rulemaking.
Also, because EPA’s synthetic FGD wastewater was much more dilute than actual treated FGD effluent samples, actual FGD treated wastewaters for most plant will require higher dilution, raising the MDLs and RLs of the analytical method. In addition, higher FGD wastewater recycle rates will result in higher TDS levels, which in turn will require even higher dilution to analyze the target metals accurately. Therefore the MDLs and RLs (QLs) for certain FGD wastewa ters may be higher than the proposed limits for arsenic, selenium and mercury. EPA should adjust its proposed limits for FGD wastewater to account for the impact of sample dilution on MDLs and RLs.

68 In 2010, UWAG provided detailed comments to EPA on i ts Standard Operating Procedure for ICP

- MS for Trace Element Analyses in Flue Gas Desulfurization Wastewaters (SOP). See letters to Ronald P. Jordan and Richard W. Reding, from Donna B. Hill, UWAG Effluent Guidelines Chair, dated March 19, 2010 and April 6, 2010 (Attachments 19 and 20 to these comments).
Comment Response:
Regarding the method detection limit comments, see the response to DCN EPA

- HQ

- OW

- 2009

- 0819

- 4499

- A1.
Further, EPA disagrees with the commenter’s characterization of the recommendation of EPA’s contractor CSC with regard to the results of the MDL study. Contrary to the commenter’s assertion, the quote from the January 16, 2013 report on the MDL study is not a recommendation that EPA use “the maximum MDL and ML as regulatory limits ” (empha sis added). Rather, the quoted text is a recommendation that EPA compare whatever discharge limits it derives from the data on actual FGD wastewaters to those maximum MDL and ML values as part of EPA’s deliberations. In fact, this is exactly how EPA used those values, and as noted elsewhere in these responses, the daily and monthly discharge limits for arsenic and selenium are higher than the maximum MLs from that study.