May 16 , 2014 Abt Associates | Cost for Regulation with and without Cooling Impoundment s 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 Ot her 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) include s 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 Impoundment s

Provi sion). 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 m ay not need to install additional

technology to meet BTA standard s 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 Impoundm ents 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 Impoundment s Provision ( Section 2 )

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

decision to include the Impoundment s 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 provision s 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 report s values as a range

for the costs and benefits that include the Impoundments Provision . The lower cost and ben efit 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 report s 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 Director s will determine whether the impoundment minimizes the withdraw al 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 ResourcesMay 16 , 2014 Abt Associates | Cost for Regulation with and without Cooling Impoundment s Provision | pg 2



### The cos t of the final rule without the Impoundment s Provision is at most 1 2 percent higher than the final

rule with the Impoundment s 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 1 3 percent at
the 7 percent discount rate

. The costs of Proposal Option 2 without the Impoundment s Pro vision are at

most 1 1 percent higher than costs with the Impoundment s 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 Impoundment s Provision, costs exceed monetize d benefits by $24 2 to $27 4

million at the 3 percent discount rate and $26 9 to $30 4 million at the 7 percent discount rate. For Proposal

Option 4 and Proposal Option 2, the comparable differences are $22 4 to $254 million and $5.2 to $5.6

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

rate are $24 7 to $28 1 million and $4.7 to $ 5.1 billion, respectively

. For the final rule and other options

considered without the Impoundment s Provision, the difference s between costs and monetized benefits

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

Impoundment s 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 Impoundment s Provision

3% Total Monetized

Benefits - $0.2 $31. 0 to $ 3 1.7 $33. 0 to

$ 3 3.7 - $ 1,5 42.6 to

-

$ 1,5 42 .9 $3 0.8 to

$ 31 .5 $3 2.8 to

$ 3 3.5 - $ 1,5 42.4 to

- $ 1,54 3 .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 $2 7 .2 to

$ 27 .8 $2 8.7 to

$ 29.3 - $ 1,14 8.2 to

-

$ 1,148.4 $2 7.1 to

$ 2 7 .7 $2 8.6 to

$ 29.2 - $ 1,14 8.1 to

- $ 1,14 8.5

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 Impoundment s Provision

3% Total Monetized

Benefits - $0.2 $3 1.7 $3 3.7

- $1,5 42.9 $3 1.5 $3 3.5

- $1,54 3 .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 $2 7 .8 $ 29.3

- $1,14 8.4 $2 7 .7 $ 29.2

- $1,14 8.5

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