May 16, 2014 Abt Associates | Cost for Regulation with and without Cooling Impoundments Provision | pg 1

Date May 16, 2014

To The Final Section 316(b) Existing Facilities Rule Record

From Abt Associates

Subject Social Costs for Final Rule and Other Options Considered with and without 

Impoundments Provision

1 Overview

As described in Section I. G. of the Preamble for the final existing facilities rule, and as defined at 

§125.92, Special definitions, (c)(2) of the final rule, closed-cycle recirculating system (CCRS) includes a 

system with impoundments of waters of the United States where the impoundment was lawfully created 

for the purpose of serving as part of the cooling water system (hereafter referred to as the Impoundments

Provision). Under this provision, facilities with qualifying impoundments of waters of the United States 

are subject to the final rule, but may meet the rule’s BTA standard for impingement mortality through 

operation of a CCRS in the baseline.1 As a result, these facilities may not need to install additional 

technology to meet BTA standards under the final rule and other options considered. 

EPA identified 64 facilities with cooling systems that contain impoundments that may qualify as CCRS

under the Impoundments Provision. This Memo to the Record compares the social cost and benefits of the 

final rule and other options EPA considered with and without the Impoundments Provision (Section 2).

The comparison of costs with and without the Impoundments Provision was not a factor in EPA’s 

decision to include the Impoundments Provision in the final rule.

2 Total Social Costs and Benefits for Existing and New Units

Table 2-1 presents total social costs for the existing and new units provisions of the final rule and other 

options EPA considered. Although EPA estimates that 64 facilities operate cooling water systems that 

include an impoundment, not all may qualify as CCRS. As a result, this memo reports values as a range

for the costs and benefits that include the Impoundments Provision. The lower cost and benefit values in 

these ranges reflect the assumption that all facilities with impoundments qualify as CCRS,2 while the 

higher values of the ranges reflect the assumption that no facilities with impoundments qualify as CCRS. 

For the costs and benefits that do not include the Impoundment Provisions, this memo reports only single 

cost and benefit values; these values are the same as the higher values reported including the 

Impoundments Provision – i.e., the values that assume that none of impoundments qualify as CCRS, 

which is equivalent to a regulation without the Impoundments Provision.

 

1 The Preamble also specifies that permit Directors will determine whether the impoundment minimizes the withdrawal of 

water for cooling purposes and would therefore meet the CCRS definition. As a result of this determination, in some cases, 

facilities with impoundments of waters of the United States might not qualify as CCRS and would need to install additional 

technology to meet the final rule’s BTA standard for impingement mortality.

2

For the analysis of this lower bound of cost and benefits values, EPA assumed that facilities with impoundments would not 

need to install additional technology, including both technology to meet impingement mortality standards and entrainment 

technology. EPA also assumed that these facilities would be assigned administrative activities commensurate with baseline 

CCRS.

Memorandum

Environment and Resources
May 16, 2014 Abt Associates | Cost for Regulation with and without Cooling Impoundments Provision | pg 2

The cost of the final rule without the Impoundments Provision is at most 12 percent higher than the final 

rule with the Impoundments Provision, under both the 3 percent and 7 percent discount rates. The 

comparable difference for Proposal Option 4 is 12 percent at the 3 percent discount rate and 13 percent at 

the 7 percent discount rate. The costs of Proposal Option 2 without the Impoundments Provision are at 

most 11 percent higher than costs with the Impoundments Provision, at the 3 percent discount rate; at the 

7 percent discount rate, the difference is at most 10 percent.

For the final rule with the Impoundments Provision, costs exceed monetized benefits by $242 to $274

million at the 3 percent discount rate and $269 to $304 million at the 7 percent discount rate. For Proposal 

Option 4 and Proposal Option 2, the comparable differences are $224 to $254 million and $5.2 to $5.6 

billion, respectively, at the 3 percent discount rate. The corresponding figures at the 7 percent discount 

rate are $247 to $281 million and $4.7 to $5.1 billion, respectively. For the final rule and other options 

considered without the Impoundments Provision, the differences between costs and monetized benefits 

are the same as the upper range values given for the final rule and other options considered with the 

Impoundments Provision.

Table 2-1: Annualized Total Social Costs and Benefits for Final Rule and Other Options EPA 

Considered – Existing Units and New Units Provisions (Millions; $2011; at 2013)

Discount 

Rate Cost Category

New 

Units

Existing Units Existing and New Units

Proposal 

Option 4

Final 

Rule

Proposal 

Option 2

Proposal 

Option 4 Final Rule

Proposal 

Option 2

With Impoundments Provision

3%

Total Monetized 

Benefits

-$0.2 $31.0 to 

$31.7

$33.0 to

$33.7

-$1,542.6 to -

$1,542.9

$30.8to

$31.5

$32.8 to 

$33.5

-$1,542.4 to 

-$1,543.1

Total Social Costs $2.6 $251.8 to

$283.2

$272.4 to

$304.8

$3,643.2 to 

$4,045.2

$254.3 to

$285.7

$274.9 to

$307.3

$3,645.8 to

$4,047.7

7%

Total Monetized 

Benefits

-$0.1 $27.2 to

$27.8

$28.7 to 

$29.3

-$1,148.2 to -

$1,148.4

$27.1 to

$27.7

$28.6 to 

$29.2

-$1,148.1 to 

-$1,148.5

Total Social Costs $2.0 $272.1 to

$306.9

$295.3 to

$331.0

$3,583.0 to

$3,949.5

$274.1 to 

$308.9

$297.3 to

$333.0

$3,585.0 to

$3,951.5

Without Impoundments Provision

3%

Total Monetized 

Benefits

-$0.2 $31.7 $33.7 -$1,542.9 $31.5 $33.5 -$1,543.1

Total Social Costs $2.6 $283.2 $304.8 $4,045.2 $285.7 $307.3 $4,047.7

7%

Total Monetized 

Benefits

-$0.1 $27.8 $29.3 -$1,148.4 $27.7 $29.2 -$1,148.5

Total Social Costs $2.0 $306.9 $331.0 $3,949.5 $308.9 $333.0 $3,951.5

a. Values may not sum to totals due to independent rounding.

Source: U.S. EPA analysis for this memorandum