*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 1 of 642 EO12866_Cooling Water Intakes_2040_ AE95_ Final_Preamble _20130722+Rule _20140519 ENVIRONMENTAL PRO TECTION AGENCY 40 CFR Parts 9, 122 , 123, 124, and 125 [EPA-HQ-OW-2008-0667, FRL – 9817-3] RIN 2040–AE95 National Pollutant Discharge Elimination System—Final Regulations to Establish Requirements for Cooling Water Intake Stru ctures at Existing Facilities and Amend Requirements at Phase I Facilities AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY:SUMMARY: The purpose of this action is to reduce impingement and entrainment of fish and other aquatic organism s at cooling water intake structures used by certain existing power genera tion and manufacturi ng facilities for th e withdrawal of cooling water from waters of the United States. This rule establishes requirements under section 316(b) of the Clean Wa ter Act (CWA) for existing po wer generating facilities and existing manufacturing and i ndustrial facilities that are designed to withdraw more than 2 million gallons per day ( MGDmgd ) of water from waters of the U.S.United States and use at least twenty-five ( 25 ) percent of the water they withdraw exclusively for cooling purposes. These national requirements, whic h will be implemented through National Pollutant Discharge Elimination System (N PDES) permits, apply to the location, design,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 2 of 642 construction, and capacity of cooling water intake structures (C WIS) at regulated facilities by settingand provide requirements that reflect th e best technology available (BTA) for minimizing advers e environmental impact. On April 20, 2011, EPA published a proposed rule that included several options for addressing these impacts. Subsequently, EPA published two Notices of Data Availa bility (NODA), on June 11, 2012 and June 12, 2012, that further clarified EPA’s proposed approach. This final rule constitutes EPA’s responsealso responds to thejudicial remand of theaspects of the previously promulgated Phase II and Phase III section 316(b) rules. In addition, EPA is also responding to thean earlier judicial decision in Riverkeeper I to removeby removing from the previously promulgated Phase I new facility rule thea restoration-based compliance alternative and the associated monitoring and demonstration requirements.

DATES: This regulation is effective [ INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER ]. For judicial review purposes, this final rule is promulgated as of 1 p. m. EDT (Eastern Daylight Time) on [ INSERT DATE 14 DAYS AFTER DATE OF PUBLICAT ION IN THE FEDERAL REGISTER ] as provided in 40 CFR 23.2. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPAHQ-OW-2008-0667. All documents in the docket are listed on the www.regulations.gov Webweb site. Although listed in the index, some information is not publicly available, e.g., CBI (confidential business information) or other information whose disclosure is restricted by statute. Certain other material, such as copyright ed material, is not placed on*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 3 of 642 the Internetinternet and will be publicly available only in hardcopy form. Publicly available docket materials are avai lable either electronically through www.regulations.gov or in hardcopy at the Water Do cket in the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Cons titution Avenue, NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is 202– 566–1744, and the telephone number for the Water Docket is 202–566–2426. FOR FURTHER INFORMATION CONTACT: For additional technicalbiological information, contact Paul ShrinerTom Born at 202

–- 566 –1076-1001 ; e-mail: shriner.paul@epa.govborn.tom@epa.gov . For additional economic information, contact Wendy Hoffman at 202–564–8794; e-mail: hoffman.wendy@epa.gov . For additional biologicaltechnical information, contact Tom BornPaul Shriner at 202

-– 566 -1001–1076 ; e-mail: born.tomshriner.paul @epa.gov

. SUPPLEMENTARY INFORMATION:
What EntitiesFacilities Are Regulated By This Action? This final rule applies to existing facilitie s that use cooling water intake structures to withdraw water from wate rs of the United States and have or require an NPDES (National Pollutant Discharge Elimination Sy stem) permit issued under section 402 of the CWA (Clean Water Act). Existing facilities subject to this re gulation include those with a DIF ( design intake flow (DIF ) greater than 2 mgd (million gallons per day).. If a facility meets these conditions, it is subject to today’ s final regulations. If a facility has or requires an NPDES permit but does not meet the 2 mgd intake flow threshold, it is Field Co d*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 4 of 642 subject to permit conditions implementi ng CWA section 316(b), developed by the
NPDES permit directorPermit Director on a site-specificcase-by-case basis using BPJ (best professional judgment) under 40 CFR 125. 90(b). This final rule defines the term cooling water intake structure to mean the total physical structur e and any associated constructed waterways used to withdraw cooling water from waters of the United States , provided that at least 25 per cent of the water actually wi thdrawn is used for cooling
purposes.. The cooling water intake structure extends from the point at which water is first withdrawn from waters of the surface waterUnited States source up to, and including, the intake pumps. Generally, facilities that meet these criteria fall into two major groups: steam electric generating facilitie s and manufacturing facilities. The final rule also makes limited changes to the requi rements for Phase I facilities (i.e., new facilities). Exhibit 1 lists the typesindustry sectors of entities that are potentiallyfacilities subject to this final rule. This ta ble is not intended to be exhaustive , but it provides a guide for readers regarding enti ties likely to be regulated by this action. Other types of entities; facilities in other industries not listed in the tableExhibit 1 could also be regulated. The 4-digit NAICS industry sectors ma y include 6-digit NAICS industry subsectors with operations that ar e not dependent on cooling water.

Exhibit 1. Industry Sectors with Facilities Subject to the Final Rule Exhibit 1. Example regulate d entities and their codes
Category Examples of Regulated Entities Standard Industrial North American 4- NAICS Definition Deleted C Deleted C Inserted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 5 of 642 Classifica

tion Codes Digit NAICS Industry Codes (NAIC) Sectors

Federal, State and Local Government Operators of steam electric generating point source dischargers that employ cooling water intake structures.Elec tric Power Industry 4911 and 493 221111, 221112, 221113, 221119, 221121, 221122, 221111, 221112, 221113, 221119, 221121, 221122

2211 Electric Power Generation, Transmission and Distribution

Industry Operators of industrial point

source dischargers that employ cooling water intake structures.Elec tric Power Industry See below See below

Steam electric generating2211 4911 and 493Electric Power Generation, Transmission and Distribution 221111, 221112, 221113, 221119, 221121, 221122, 221111, 221112, 221113, 221119, 221121, 221122

Industry Agricultural productionPrim ary Manufacturing Industries 0133 111991, 11193

Metal mining 1011 21221 Deleted C

Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 6 of 642 3112 Oil and gas extraction (excluding offshore and coastal subcategories)Grain and Oilseed Milling 1311, 1321 211111, 211112

3113 Mining and quarrying of nonmetallic mineralsSugar and Confectionery Product Manufacturing 1474 212391

3121 Beverage Manufacturing

3221 FoodPulp, Paper, and kindred productsPaperboard Mills 2046, 2061, 2062, 2063, 2075, 2085 311221, 311311, 311312, 311313, 311222, 311225, 31214

Tobacco products3222 2141Converted Paper Product Manufacturing 312229, 31221

Textile mill products 2211 31321

3241 Lumber and wood products, except furniturePetroleum and Coal Products Manufacturing 2415, 2421, 2436, 2493 321912,32111 3, 321918, 321999, 321212, 321219 3251 Basic Chemical Manufacturing

3252 Paper and allied productsResin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing 2611, 2621, 2631, 2676 3221 , 322121, 32213, 322121, 322122, 32213, 322291

3253 Chemical and allied productsPesticide, 28 (except 325 (except 325182, Inserted Deleted C Deleted C

Inserted Deleted C Deleted C

Inserted Deleted C Deleted C

Inserted Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 7 of 642 Fertilizer, and Other Agricultural Chemical Manufacturing 2895, 2893, 2851, and 2879) 32591, 32551, 32532)

3254 Petroleum refining and related industriesPharmaceu tical and Medicine Manufacturing 2911, 2999 32411, 324199

3256 Rubber and miscellaneous plastics productsSoap, Cleaning Compound, and Toilet Preparation Manufacturing 3011, 3069 326211, 31332, 326192, 326299

3259 Stone, clay, glass, and concrete productsOther Chemical Product and Preparation Manufacturing 3241 32731

Primary metal industries 3312 , 3313 , 3315, 3316, 3317, 3334, 3339, 3353, 3363, 3365, 3366 324199, 331111, 331112, 331492, 331222, 332618, 331221, 22121, 331312, 331419, 331315, 331521, 331524, 331525

3311 Fabricated metal products, except machinery and transportation equipmentIron and Steel Mills and Ferroalloy Manufacturing 3421, 3499 332211, 337215, 332117, 332439, 33251, 332919, 339914, 332999

3312 Steel Product Manufacturing from Purchased Steel Inserted Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 8 of 642 3313 IndustrialAlumina and commercial machineryAluminum Production and computer equipmentProcessin g 3523, 3531 333111, 332323, 332212, 333922, 22651, 333923, 33312

Industry Transportation equipmentOthe r Industries 3724, 3743, 3764 336412, 333911, 33651, 336416

1119 Other Crop Farming 2122 Metal Ore Mining

3133 Measuring, analyzing, and controlling instruments; photographic, medical, and optical goods; watches and clocksTextile and Fabric Finishing and Fabric Coating Mills 3861 333315, 325992

Electric, gas, and sanitary services3211 4911, 4931, 4939, 4961Sawmills and Wood Preservation 221111, 221112, 221113, 221119, 221121, 221122, 22121, 22133

Educational services3314 8221Nonferrous Metal (except Aluminum) Production and Processing 61131

Engineering, accounting, research, management and related services3322 8731Cutlery and Handtool Manufacturing 54171

3329 Other Fabricated Metal Product Manufacturing Inserted Deleted C Deleted C

Inserted Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 9 of 642 3364 Aerospace Product and Parts Manufacturing

3391 Medical Equipment and Supplies Manufacturing

To determine whether a facility could be regulated by this action, one should carefully examine the applicab ility criteria in § 125.91 of the final rule. For information regarding the applicability of this action to an en tity, consult the personpersons listed for technical information in FOR FURTHER INFORMATION CONTACT.

Supporting Documentation 1. Docket EPA has established an official public docket for this action under Docket ID EPA-HQ-OW-2008-0667. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not include information claimed as Confidential Business Information ( CBI ) or other information , the disclosure of which , is restricted by statute. For information on how to access materials in the docket, see ADDRESSES above. To view docket materials, call ahead to schedule an appointme nt. Every user is entitled to copy 266 pages per day before incurring a charge. The Docket Center may charge $0.15 for each page over the 266-page limit, plus an administrative fee of $25.00.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 10 of 642 2. Electronic Access You may access this Federal Register doc ument and the docket electronically through the Web site http://www.regulations.gov by searching for Docket ID EPA-HQOW-2008-0667. For additional information about the public docket, visit the EPA Docket Center home page at http://www.epa.gov/epahome/dockets.htm

.

3. Technical Support Documents The final regulation is suppor ted by three major documents:

 Economic Analysis for the Final Secti on 316(b) Existing Facilities Rule (EPA821-R- 13-00414-001 ), referred to as the EA throughout . This document presents the analysis of compliance costs, closureseconomic impacts , energy supply effects, and a summary of benefits associated with the final rule.

 Benefits Analysis for the Final Section 316(b) Existing Facilities Rule (EPA-821-
R- 12-00314-005 ), referred to as the BA throughout . This document examines cooling water intake structure impacts and regulatory benefits at the regional leveland national levels

.

 Technical Development Document for the Final Section 316(b) Existing Facilities Rule (EPA-821-R- 12-00814-002 ), referred to as the TDD (Technical Development Document) throughout. This document presents detailed information on the methods used to deve lop unit costs and describes the set of technologies that may be used to meet the final rule requirements.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 11 of 642 Table of Contents I. Executive Summary and Scope of Today’s Rulemaking A. Executive Summary B. Scope of Today’s Rulemaking C. General Applicability D. What is an “Existing Facility ” for Purposes of the Final Rule? E. What is “Cooling Water” and What is a “Cooling Water Intake Structure?” F. Would My Facility Be Covered Only If It Is a Point Source Discharger? G. Would My Facility Be Covered If It Withdraws Water from Waters of the United States? What If My Facility Obtains Cooling Water from an Independent Supplier? H. What Intake Flow Thresholds Result in an Existing Facility Being Subject to the Final Rule? I. I. What are the Requirements for Existing Offshore Oil and Gas Facilities, Offshore Seafood Processing Facilities or LNG Terminals BTA Requirements under the Final Rule ? J. What is a “New Unit” and How Are Ne w Units Addressed Under the Final Rule? K. Amendments Related to the Phase I Rule II. Legal Authority for and B ackground of the Final Regulation A. Legal Authority B. Purpose of the Regulation C. Background III. Environmental Effects Associated wi th Cooling Water Intake Structures A. Introduction B. Major Anthropogenic Stresso rs in Aquatic Ecosystems C. Effects of CWIS on Aquatic Ecosystems D. Community–level or Indirect Effects of CWIS E. Cumulative Effects of Multiple Facilities IV. Summary Description of the Final Rule A. BTA Standard for Impingement Mortality for Existing Units at Existing Facilities B. BTA Standard for Entrainment for Existing Units at Existing Facilities C. BTA Standard for Impingement Mortality and Entrainment for New Units at Existing Facilities D. Other Provisions V. Summary of Most SignificantData Updates and Revisions to the Proposed Rule A. Data Updates B. Regulatory Approach and Compliance*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 12 of 642 C. New Units VI. Basis for the Final Regulation A. EPA’s Approach to BTA BB. Overview of Fina l Rule Requirements C . Technologies Considered to Mini mize Impingement and Entrainment CD . Technology Basis for Today’s Final Rule D. Other Options Considered for Today’s Final Regulation E. Option Selection F. Other Options Considered for Today’s Final Regulation G. Final Rule BTA Performance Standards H. Economic and Benefit Analysis for the Final Rule GI . Site-Specific Considerati on of Entrainment Controls VII. Response to Major Comments on the Proposed Rule and Notices of Data Availability ( NODANODAs ) A. Scope and Applicability B. Proposed Amendments Related to Phase I Rule C. Environmental Impact Associated wi th Cooling Water Intake Structures D. EPA’s Approach to BTA E. BTA Performance Standards F. Implementation G. Costs H. Monitoring and Reporting I. EPA Legal AuthorityEndangered Species Act VIII. Implementation A. When Does the Final Rule Become Effective and How are the Requirements Sequenced in an Orderly Way? B. How Does the Final Rule Reduce Biological Monitoring Requirements? C. What Information Will I Be Required to Submit to the Director When I Apply for My NPDES Permit? D. When Are Permit Application Studies Due? E. How Will the Director Determine the Best Technology Available for Minimizing Adverse Environmental Impacts? F. What are Example Permit Conditions and Compliance Monitoring for Impingement Mortality? G. What Monitoring is Required for Entrainment? H. What Reports Am I Required To Submit? I. What Records WouldWill I Be Required to Keep? J. What Are the Respective Federal, State, and Tribal Roles? K. Permits for Existing Facilities are Subject to Requirements under theProtection of Endangered and Threatened Species Actand Designated Critical Habitat*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 13 of 642 L. Permits for Existing Facilities are Subj ect to Requirements under Other Federal Statutes IX. Cost Development and Economic Impact Analysis A. Overview of Costs to Regulated Faci lities and Federal a nd State Governments B. Development of Compliance Costs C. Social Costs D. Economic ImpactImpacts E. Employment Effects X. Benefits Analysis A. Introduction B. Regional Study Design C. Physical Impacts of Impingement Mortality and Entrainment D. National Benefits of the Fina l Rule and Options Considered XI. Related Acts of Congress, Execu tive Orders, and Agency Initiatives A. Executive Order 12866: Regulatory Pla nning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act (RFA) D. Unfunded Mandates Reform Act (UMRA) E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation a nd Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Child ren from Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations K. Executive Order 13158: Marine Protected Areas L. Congressional Review Act*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 14 of 642 I. Executive Summary and Scope of Today’s Rulemaking A. Executive Summary 1. Summary of the Major Provisi ons of the Regulatory Action This rule establishes requirements unde r section 316(b) of the Clean Water Act (CWA) for existing power generating facilitie s and existing manufact uring and industrial facilities that withdraw more than 2 million gallons per day ( MGDmgd ) of water from waters of the U.S.United States and use at least twenty-five ( 25 ) percent of the water they withdraw exclusively for cooling purposes. These national requirements, which will be implemented through National Pollutant Di scharge Elimination System (NPDES) permits, apply to the location, design, constr uction, and capacity of cooling water intake structures (CWIS) at regulat ed facilities by setting require ments that reflect the best technology available (BTA) for minimi zing adverse environmental impact. 1 On April 20, 2011, EPA published a proposed rule that includ ed several options for addressing these impacts. EPA published two Notices of Da ta Availability (NODA), on June 11, 2012 and June 12, 2012, that further clarified EPA’s a pproach. This final rule constitutes EPA’s response to the remand of the Phase II and Phase III rules. In addition, EPA is also responding to the decision in Riverkeeper I to remove from the Phase I new facility rule

1 As noted here, the term BTA means “best technolo gy available for minimizing adverse environmental impact.” In the interests of brevity, the acronym will frequently be used in the preamble to reflect the entire definition.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 15 of 642 the restoration-based compliance alternative and the associated monitoring and demonstration requirements. 2. Need for the Rule Cooling water is withdrawn for the pur pose of dissipating waste heat from industrial processes. Over half of all water w ithdrawn in the United States each year is for cooling purposes. By far, the largest industrial use of cooli ng water is for thermoelectric generation, but cooling water is also used in the manufactur e of aluminum, chemicals and allied products, food and kindred products, pulp and paper, refine d petroleum products, and steel, as well as in othe r industries. Although newer desi gns are more efficient, the long life of the capital equipment in th ese industries suggests that the adverse environmental impacts could continue for decades. Electric generators, for example, typically convert 30 to 40 pe rcent of the heat content of their fuel to electricity, depending on their fuel source, age of thei r facility, and capacity utilization (see TDD 5.1). The purpose of cooling water withdrawals is to dissipate that por tion of the heat that is a by-product of industrial processes that fac ilities have not used and therefore view as waste heat. The withdrawal of cooling water by exis ting facilities removes and kills hundreds of billions of aquatic organisms from waters of the United States each year, including plankton (small aquatic animals, including fi sh eggs and larvae), fish, crustaceans, shellfish, sea turtles, marine mammals, and many other forms of aquatic life. Most impacts are to early life stages of fish and shellfish. Aquatic organisms drawn into CWIS are either impinged (I) on components of the intake structure or entrained (E) in the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 16 of 642 cooling water system itself. In CWA section 316(b) and in this ru lemaking, these impacts are referred to as adverse environmental impact (AEI). Rates of I&E depend on species characteristics, the facility’s environmen tal setting, and the location, design, construction and capacity of the facility’s CW IS. In addition to direct loss es of aquatic organisms from I&E, a number of indirect, ecosystem-level effects may also occur, including (1) disruption of aquatic food webs resulting from the loss of impinged and entrained organisms that provide food for other species, (2) disruption of nutri ent cycling and other biochemical processes, (3) alteration of species compos ition and overall levels of biodiversity, and (4) degradation of the overa ll aquatic environment. In addition to the impacts of a single CWIS on currents and ot her local habitat feat ures, environmental degradation can result from the cumulative impact of multiple intake structures operating in the same watershed or intakes located within an area where intake effects interact with other environmental stressors. Finally, although it is di fficult to measure, the compensatory ability of an aquatic populati on, which is the capacity for a species to increase survival, growth, or reproduction rates in response to decreased population, is likely compromised by I&E and the cumula tive impact of other stressors in the environment over extended periods of time. The beneficiaries of fish protection at cooling water intakes include fisherman, both recreational and commercial, and people interested in well-f unctioning and healthy aquatic ecosystems. While most people consum e electricity, they consume electricity in differing amounts, and may not be uniformly inte rested in, or willi ng to pay for, fish protection. Thus, there is imperfect overlap between those who could be required to pay*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 17 of 642 for fish protection and those who w ould benefit from fish protection. Those who desire more fish protection have extremely limited opportunities in which they can express their willingness to pay for fish protection in market transactions that result in fish protection. In addition, deregulation in the electric indus try has made it more difficult for merchant power producers to both remain compet itive and pass along to consumers costs associated with fish protection, relative to rate-regulated electric utilities that are vertically integrated. Fish protection at cooling water intakes is also variable, based on species and their migrations, waterbody, size of a cooling water in take, presence of multiple facilities on a waterbody, and many more variable s that are highly site spec ific. In addition, given the history of litigation around this section of the Clean Water Act, states have, in some instances, administratively c ontinued permits while awaiti ng final Federal action, and thus fish protection has been delaye d, in some instances for decades. Promulgation of today’s final rule will co mplete EPA’s regulations under section 316(b) of the Clean Water Act. This rule in cludes a national performance standard as the BTA to address impingement mortality (IM) at existing CWIS. This national standard for impingement reflects EPA’s assessment th at impingement reduction technology is available, feasible and demonstrated, a nd thus BTA for existing facilities. The impingement mortality standard is based on modified traveling screens with fish returns and includes a performance standard as one compliance alternative, but also offers six other compliance alternatives that are equivalent or better in performance. With regard to entrainment, this rule contains a national BTA standard that is a process for a site-specific*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 18 of 642 determination of entrainment mitigation requirements at existing CWIS. The entrainment provision reflects EPA’s assessment that ther e is no single technology basis that is BTA for entrainment at existing facilities, but in stead a number of f actors that are best accounted for on a site-specific basis. Site-specific decision making may lead to a determination by the NPDES permitting author ity that entrainment requirements should be based on variable speed pumps, water reus e, fine mesh screens, a closed-cycle recirculating system, or some combination of technologies that c onstitutes BTA for the individual site. The site-specific decision-making may also lead to no additional technologies being required. In addition to the above provisions, wh ich apply to existing units at existing facilities, the rule establishes a BTA st andard, for both impingement mortality and entrainment, for new units at existing facilitie s. Under this standard, new units at existing facilities will be subject to requirements si milar to the section 316(b) requirements for new facilities subject to the previously promulgated Phase I rule. In addition, there is a need to regulate even those fac ilities that adopt the most effective technology. Cooling water is withdrawn for the purpose of dissipating waste heat from industrial processes. Over half of all water withdrawn in the United States each year is for cooling purposes. By far, the la rgest industrial use of cooling water is for thermoelectric generation, but cooling water is also used in the manufacture of aluminum, chemicals and allied products, food and ki ndred products, pulp and paper, refined petroleum products, and steel, as well as in other industries. Most of these industries are capital intensive. The purpose of these withdraw als is to dissipate th at portion of the heat*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 19 of 642 that is a by-product of industrial processes that facilities have not harnessed to a productive end and therefore view as waste he at. Electric generators typically convert 30 to 40 percent of the heat c ontent of their fuel to elect ricity, depending on their fuel source, age of their plant, and capacity utilization. Although newer designs are more efficient, the long life of th e capital equipment in these industries suggests that the adverse environmental impacts could continue for decades. Closed-cycle cooling is a technology that recirculates cooling water, reducing withdrawals from surface waters. Closed-cycle cooling can reduce water withdrawals by upwards of 90at least 95 percent, compared to once-through cooling, but is itself ca pital intensive. Faciliti es that retrofit to closed-cycle cooling without also modifying their condenser ma y not be able to operate at full capacity during summer peak peri ods of electricity demand (replacing the condenser would require longer outages). Thus, even operatorsOperators who retrofit closed-cycle cooling systems have a financial incentive not to run their system in closedcycle mode during summer months. Thus, private decision making at facilities that use cooling water may not take society’s preferences for fish protection into account in their private actions. The beneficiaries of fish protection at cooling water intakes include fisherman, both recreational and commercial, and citizens interested in well-f unctioning and healthy aquatic ecosystems. While most citizens consume electricity, they consume electricity in different amounts, and may not be uniformly in terested in, or willing to pay for fish protection. Thus, there is imperfect overlap between those who could be required to pay for fish protection and those who w ould benefit from fish protection. Citizens who desire*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 20 of 642 more fish protection have extremely limited opportunities in which they can express their willingness to pay for fish protection in market transactions that result in fish protection. In addition, deregulation in the electric indus try has made it more difficult for merchant power producers to both remain compet itive and pass along to consumers costs associated with fish protection, relative to rate-regulated electric utilities that are vertically integrated. Fish protection at cooling wa ter intakes is also variable , based on species and their migrations, water body, size of a cooling water in take, presence of multip le facilities on a water body, and many more factors. These fact ors make it difficult for EPA to issue a regulation based on uniform national technol ogy requirements. In addition, given the history of litigation around this section of the Clean Water Act, states have, in some instances, administratively exte nded permits, awaiting final fede ral action, and thus fish protection has been delayed, in some instances for decades. EPA notes that some facilities have installed, and some NPDES perm its require, controls that protect aquatic organisms from impingement and entrainment. Facilities may have adopted controls as good stewards. Permit directorsDirectors may have required controls to meet state water quality standards, particularly with regard to temperature. TheseBased on our evaluation of available evidence, these actions have not been widespread enough to discourage cooling water withdrawals from waters where they have the greatest impact . With today’s rule, EPA is promulgating a rule that w ill complete the Agency’s regulations under Section 316(b) of the Clean Water Act. In re sponse to the adverse environmental impact caused by operation of cooling water intake stru ctures, and the fact that private decisions*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 21 of 642 may not account for this impact and thus le ad to economic losses in society, EPA is promulgating this final rule. This rule incl udes a national performa nce standard as the best technology available to address impinge ment mortality at existing CWIS. This national standard reflects EPA’s assessment that impingement reduction technology is available, feasible and demonstrated, and thus BTA for all existing facilities. In addition, this rule contains a national BTA standard for entrainment that is a process for a sitespecific determination of entrainment requi rements at existing CWIS. This provision reflects EPA’s assessment that there is no te chnology that is BTA for entrainment at all facilities, based on a set of factors that are be st accounted for on a si te-specific basis. on aquatic organisms. Site-specific decision making may lead to a determination by the NPDES permitting authority that entrainment requirements should be based on variable speed pumps, water reuse, fine mesh screens, a closed-cycle reci rculating system, or some combination of technologies that cons titutes BTA for the individual site. The sitespecific decision-making may also lead to no additional technologies being required.
In addition to the above provisions, wh ich apply to existing CWIS units at existing facilities, the rule establishes a BTA standard for new units at existing facilities. New units are defined as newl y built, standalone units, or repowered, rebui lt or replaced units in which the turbine and condenser are replaced which are not high energy efficiency units.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 22 of 642 3. Costs and Benefits As presented in Exhibit I-1, EPA assessed the expected costs to society for complying with the final rule as $297 million and $309 million per year, depending on
the discount rate that is used in the cost calcul ation. This calculation accounts, accounting for both the existing CWIS unitsunit provision , and the new unitsunit provision ., as $275 million and $297 million per year at the 3 percent and 7 percent discount rates, respectively. These costs reflect permit app lications, studies, reco rdkeeping, monitoring, and reporting required by the rule. The cost s also include costs of technologies for complying with the BTA for IM. The cost of additional technologies that may be required to meet the site-specific BTA for entrainment are not included in this analysis because, as explained in Section VII, EPA cannot estimate , with any level of certainty, what sitespecific determinations will be made based on the analyses that will be generated as a result of the national BTA standard for entrainment decision-making established by today’s rule. EPA estimates that thetoday’s final rule – including standards for both existing units and new units provisionsat existing facilities – will achieve total monetized benefits to society of $ 1933 million and $ 2129 million annually, again depending on the discount rate. This estimate of benefits omits important categories of benefits that EPA expects the rule will achieve, such as mo st of the benefits associat ed with fish other than commercially and recreationally harvested fish. As a result, these estimates are likely to understate substantially the rule’s expected be nefits to society. In estimating the benefits of today’s rule, EPA did not rely on the resu lts of the stated pref erence survey conducted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 23 of 642 by the Agency and described in the June 12, 2012 Notice of Data Availability (77 FR 34927 (June 12, 2012)). Included in the monetized benefits is EPA’s estimate that the final rule will reduce greenhouse gas (GHG) emissions by 5.69.3 million tons of
CO 2 -equivalent emissions over the 40-year comp liance period for this analysis. Based on this reduction in GHG emissions, EPA estim ates benefits to society (based on social cost of carbon ) (DCN 2 12-4853)) ranging from $ 512 million to $ 613 million , annually (see Section 9 of the BA), depending on the discount rate and other assumptions in the social cost of carbon analysis.

Exhibit I-1. Total annualiz ed social costs and benefits for th e final rule (in millions, 2011 dollars) Existing Units New Units Total Using 3 percent discount rate Social Costs $272.4 $2.5 $274.9
Social Benefits $33.0 -$0.2 $32.8 Using 7 percent discount rate Social Costs $295.3 $2.0 $297.3
Social Benefits $28.7 -$0.1 $28.6

EPA expects that the final rule will ha ve relatively minor economic impacts on the regulated facilities, the entities that own them, and the overall electric power sector, which is the industry most affected by t oday’s rule. Under the rule’s existing unit provisionprovisions , EPA estimates that a substantial majority ( 8486 percent) of Electric

2 DCN refers to a document control number. An index of DCNs can be found in the docket for this action.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 24 of 642 Generatorselectric generators will incur compliance costs of less than 1 percent of revenue, indicating the minor impact of the rule on these facilities. EPA also expects very small impacts on the non-power sector component of regulated facilities. EPA estimates that 571504 out of 579509 facilities will incur costs less than one percent of revenue, eightfive will incur costs between one and three percent, and none will incur costs greater than 3 percent. In addition, EPA estimates that no Manufacturersmanufacturing facilities will close as a result of today’s rule, and that only 12 facilities in the non-power s ector component will experience moderate financial stress short of closure. These 12 facilities repres ent approximately 3 percent of the estimated total regulated facili ties in the non-power sector component. At the level of the entities that own regul ated facilities, EPA estimates that 91 to 94 percent of entities owning regulated faciliti es in the electric power sector will incur compliance costs of less than 1 percen t of revenue under th e rule’s existing unitsunit provisions. Likewise, for the non-power sector component of regulated facilities, EPA estimates that 90 to 95 percent of entities owning regulated facilities will incur compliance costs of less than 1 percen t of revenue under th e rule’s existing unitsunit provisions. Finally, EPA estimates that today’s rule will have a minor impact on the overall electric power sector and electricit y consumers. EPA estimates that the rule’s existing units provisionrule will not affect national or regional electricity markets on a long-term basis. In addition, EPA expects th ere to be no effects of the fi nal rule on the reliability of electricity generation, transmission and distri bution. In terms of consumer impacts, EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 25 of 642 estimates, on average, across the United States, that the final rule will increase electricity production costs by 0. 010009 cents per kWh, causing an estimated 0.1 percent increase in average electricity prices. The corresponding annual increas e in electricity costs is approximately $1. 1703 per household.
B. Scope of Today’s Rulemaking Today's final rule represents the last st age in EPA’s efforts to implement section 316(b) of the CWA (Clean Water Act).. In the course of thei r operations, electric power plantsfacilities and certain manufacturing facilities use large amount s of water either for cooling purposes or in their manufacturing processes. Such facilities typically remove water from nearby sources using “cooling wa ter intake structures .” The structures associated with water removal pose a number of threats to the environment. Principally, aquatic organisms are squashed against intake screens – impingement – or drawn into the cooling system – entrainment. Section 316(b) requires EPA to develop standards for cooling water intakes structures. Today’s final rule establishes national re quirements applicab le to the location, design, construction, and capacity of cooling wate r intake structures at existing facilities that reflect the best technology availableBTA for minimizing the adverse environmental impact (BTA)–impacts– impingement and entrainment – associated with the use of these structures. It represents the culmination of EPA’s efforts to implement section 316(b) and, as such, fulfills EPA's obligation under a settlement agreement entered in the United States District Court for the Sout hern District of New York in Riverkeeper Inc., et al. v.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 26 of 642 Jackson , No. 93 Civ. 0314 (AGS). (For a more de tailed discussion of the settlement agreement, see Section II.C.) This final rule establishes requirements for all existing facilities with a DIF (design intake flow) of more than 2 mgd (million gallons per day).. EPA estimates that a total of 1,065 facilities w ill be subject to the final rule, including 544 Electric Generators, 509 Manufacturers in six Primary Manufacturin g Industries, and 12 Manufacturers in Other Industries. The rule also clarifies the definition and requirements for new units at existing facilities. The applicable requi rements are summarized in Exhibits I- 12 and I- 23

.
Exhibit I- 12 . Applicability by phase of the 316(b) rules Facility characteristic Applicable rule New power-generating or manufacturing facility Phase I rule New offshore oil and gas facility Phase III rule New unit at an existing power-generating or manufacturing facility This rule Existing power-generating or manufacturing facility This rule Existing offshore oil and gas facility and offshore seafood processing facilities This rule (site-specific, BPJ)

Exhibit I- 23 . Applicable requirements of today’s rule for existing facilities Facility characteristic Applicable requirements Existing facility with a DIF greater than 2 mgd and

an AIF (actual intake flow) greater than 125 mgd Impingement mortality standar ds at § 125.94(c) and site-specific entrainment requirements under the entrainment standards at § 125.94(d) (Additional study requirements at § 122.21(r)(1) (ii)(B)) Existing facility with a DI F greater than 2 mgd but

AIF not greater than 125 mgd Impingement mortality st andards at § 125.94(c) ) and site-specific entrainment requirements under the entrainment standar ds at § 125.94(d) New unit at an existing facili ty where the facility has

a DIF greater than 2 mgd Impingement mortality standards at § 125.94(c) and new unit entrainment standards for new units at § 125.94(e)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 27 of 642 Other existing facility with a DIF of 2 mgd or smaller

or that has an intake stru cture that withdraws less than 25 percent of the water for cooling purposes on an actual intake flow basis Site-specific, BPJCase-by -case BPJ permitting per § 125.90(b)

At an early stage in the development of section 316(b) requirements, EPA divided its rulemaking effort into three phases. The first addressed new facilities, the second, large existing electricity utility facilities and the third, the remaining electric generating facilities not addressed in th e earlier phases as well as ex isting manufacturing operations. As EPA’s analysis progressed, however, it b ecame clear that it could address in one rulemaking cooling water inta ke structures at both existing steam electric generating and manufacturing facilities. From a biological pers pective, the effect of intake structures on impingement and entrainment 3 does not differ depending on wh ether an intake structure is associated with a power plant or a manufacturer. In 2009, following judicial challenge of the Phase II rule, EPA asked the U.S. C ourt of Appeals for the Second Circuit to remand the rule to the Agency for further act ion consistent with a decision by the U.S. Supreme Court in Entergy Corp. v. Riverkeeper, Inc. and the Second Circuit’s decision on the Phase II rule in Riverkeeper, Inc

. v. EPA , 475 F.3d 83 (2d cir. 2007). In 2009, EPA also asked the U.S. Court of Appeals for th e Fifth Circuit to remand certain aspects of EPA’s Phase III rule that were before it in a petition for review. Today’s rule responds to

3 Throughout the preamble and support documents, the terms “entrainment” and “entrainment mortality” may be used interchangeably. As described below, EPA continues to assume that, in most instances, entrainment mortality is 100 %, percent, leaving little distinction between the two terms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 28 of 642 these remands as well to the Second Circuit’ s remand of limited as pects of the Phase I section 316(b) rule in Riverkeeper Inc. v. Johnson , 358 F.3d 174 (2nd Cir. 2004). EPA has here consolidated the uni verse of potentially regulated facilities from the remanded 2004 Phase II rule with the existing faciliti es in the remanded 2006 Phase III rule for establishing requirements in a single proceeding. C. General Applicability This rule applies to owners a nd operators of ex isting facilities 4 that meet all following criteria:

 The facility is a point source th at uses or, in the case of a new unitunits at an existing facility, proposes to use cooling water from one or more cooling water intake structures, including a cooling wa ter intake structure operated by an independent supplier not othe rwise subject to 316(b) re quirements that withdraws water from waters of the United States a nd provides cooling water to the facility by any sort of contract or other arrangement;

 The facility-wide DIF for all cooling water intake structures at the facility is greater than 2 mgd;

 The cooling water intake structure wit hdraws cooling water from waters of the United States; and

4 Throughout the preamble, the terms “owner or op erator of a facility” and “facility” may be used interchangeably. In cases where the preamble may state that a facility is required to do a given activity, it should be interpreted as the the owner or operator of the facility is required to do the activity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 29 of 642  At least 25 percent of the water actually withdrawn

--–actual intake flow (AIF)

--

–is used exclusively for cooling purposes. A facility may choose to demonstrate compliance with the final rule for the entire facility, or for each individual co oling water intake structure. EPA is adopting provisions that promote the reuse of water from certain sources for cooling and that ensure th at the rule does not discourage the reuse of cooling water for other uses such as process water. For exampl e, the final rule at § 125.91(c) specifies that obtaining cooling water from a public wate r system, using reclaimed water from wastewater treatment facilities or desalina tion plants, or recycling treated process wastewater effluent (suc h as wastewater treatment plant “g ray” water) does not constitute use of a cooling water intake structure for pur poses of this rule. In addition, the definition of cooling water at § 125.92 provides that cooling water obtained from a public water system, reclaimed water from wastewater tr eatment facilities or desalination plants, treated effluent from a manufact uring facility, or cooling water that is used in a manufacturing process either before or after it is used for cooling isas process water is not considered processcooling water for the purposes of cal culating the per centage of a facility’s intake flow that is used for c ooling purposes. Therefore, water used for both cooling and non-cooling purposes does not count toward the 25 percent threshold. Examples of water withdrawn for non-cooli ng purposes includes water withdrawn for warming by LNG (liquefied natural gas) faci lities and water withdrawn for public water systems by desalinization facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 30 of 642 Today’s rule focuses on those facilities th at are significant user s of cooling water. The rule provides that only those facilities that use more than 25 percent or more of the water withdrawn exclusively for cooling purposes (on an actual intake flow basis) are subject to the rule. EPA previ ously considered a number of cut-points or approaches for focusing the applicability of the rule (66 FR 28854 [, May 25, 2001 ] and 66 FR 65288 [, December 18, 2001 ]).). EPA used the 25 percent threshold in each of the Phase I, II, and III rules. For this rule, EPA did not receive any new data supporting a different threshold or identify new approaches to the applicab ility of the rule. C onsequently, EPA is adopting 25 percent as the threshold for the pe rcent of flow used for cooling purposes to ensure that a large majority of cooling wate r withdrawn from waters of the United States are subject to the rule’s requirements fo r minimizing adverse environmental impact. Because power-generating facili ties typically use far more than 25 percent of the water they withdraw exclusively for cooling purposes, the 25 percent threshold will ensure that intake structures accounting for nearly all cooling water used by the power sector are addressed by today’s rule requirements. Wh ile manufacturing fac ilities often withdraw water for more purposes than cooling, the ma jority of the water is withdrawn from a single intake structure. Once water passes thr ough the intake, water can be apportioned to any desired use, including uses that are not related to cooling. However, as long as at least 25 percent of the water is used exclusiv ely for cooling purposes, the intake is subject to the requirements of today’s rule . EPA estimates that approximately 6870 percent of manufacturers and 9387 percent of power-gener ating facilities that meet the first three criteria for applicability outlined above also use more than 25 percent or more of intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 31 of 642 water for cooling and thus are subject to today’s rule. (See 66 FR 65288, December 18, 2001.) For facilities that are below any of the applicability thresholds in today’s rule , – for example , a facility that withdraws less than 25 percent of the intake flow for cooling
purposes , –the Director must set ap propriate requirements on a site-specificcase-by-case basis, using best professional judgment ( BPJ ) , based on § 125.90(b). Today’s rule is not intended to constrain permit writers at the Federa l, State, or Tribal level, from addressing such cooling water intake structures. Also, EPA decided to adopt fo r the final rule the proposed provision that require s the owners and operators for certain categories of facilities (existing offshore oil and gas f acilities, existing offshore seafood processing facilities and offshore LNG terminals) to meet site-specificcase-by-case BTA impingement and entrainment requirements, es tablished by the Director. Such facilities are subject to permit conditions implementing CWA section 316(b) if the facility is a point source that uses a cooling water intake structure and has, or is required to have, an NPDES permit. D. What is an “Existing Facilit y” for Purposes of the Final Rule? In today’s rule, EPA is defining the term “existing facility” to include any facility subject to section 316(b) that is not a “new facility” as defined in 40 CFR 125.83 . (the Phase I rule).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 32 of 642 A point source discharger would be subject to Phase I or today’s rule even if the cooling water intake structure it uses is not located at the facility. 5 In addition, modifications or additions to the cooling water intake structure (or even the total replacement of an existing cooling water intake structure with a new one) does not convert an otherwise unchange d existing facility into a ne w facility, regardless of the purpose of such changes (e.g., to comply with today’s rule or to increase capacity). Rather, the determination as to whether a facility is new (Phase I) or existing (today’s rule) focuses on whether or not it is a greenfield or stand-alone facility whose processes are substantially independen t of an existing facility, and whether or not there are changes to the cooling water intake . New facility does not include new units that are added to accommodate it.a facility for purposes of the same general industrial operation. For example, a new peaking unit at an existing electrical generating station is not a new facility (40 CFR 125.83). The di stinction between an existing facility and a new facility is separate from the distinction between an existing unit at an existing facility and a new unit at an existing facility, which is discu ssed at greater length in Section J below. E. What is “Cooling Water” and What is a “Cooling Water Intake Structure?” EPA has notslightly revised the definition of cooli ng water intake structure from proposal for today’s rule. AIn today’s final rule, a cooling water intake structure is defined as the total physical structure and a ny associated constructed waterways used to

5 For example, a facility might purchase its cooling wa ter from a nearby facility that owns and operates a cooling water intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 33 of 642 withdraw cooling water from wa ters of the United States. Un der the definition in today’s rule, the cooling water intake structure extends from the point at which water is first withdrawn from Waters of the surface water sourceUnited States up to, and including, the intake pumps. The final rule at § 125.91(c) al so specifies that ob taining cooling water from a public water system, using reclaimed water from wastewater treatment facilities (such as wastewater treatment plant “gray” water) or desalination plants, or recycling treated process wastewater effluent (such as wastewater treatm ent plant “gray” water) does not constitute use of a cooling water intake structure for purposes of applicability of this rule . As a point of clarification, facilities subject to today’s rule may choose to use another entity’s treated wastewater as a sour ce of cooling water, thereby reducing cooling water withdrawals and associated impingement and entrainment. EPA notes that because the entity providing the wastewater for c ooling has already treated it to meet any applicable discharge requirements (e.g., ot herwise applicable effluent limitations guidelines and standards, water quality standard s, etc.), EPA is not concerned that this provision will lead to pollutant discharges that would not have occurred if the treated effluent had been discharged by the other entity

. Today’s rule adopts the new facility rule’s definition of cooling water as water used for contact or noncontact cooling, incl uding water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The definition specifies that the intended use of coo ling water is to absorb waste heat [ not being efficiently used or recaptu red for production and thus ] rejected from the process or processes used orfrom auxiliary operations on the facility ’s premises. The definition also*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 34 of 642 indicates that cooling water obtained from a public water system, reclaimed water from wastewater treatment facilities or desalin ation plants, treated effluent from a manufacturing facility , or cooling water that is used in a ma nufacturing process either before or after it is used for cooling , or is as process water would not be considered cooling water for the purposes of determining whether 25 percent or more of the actual intake flow is cooling water. This clarificat ion is necessary because cooling water intake structures typically bring wate r into a facility for numer ous purposes, including industrial processes; use as circulating water, service water, or evaporative cooling tower makeup water; dilution of effluent heat content; equipment cooli ng; and air conditioning. Note, however, that all intake water (including cooling and non-co oling process) is included in the determination as to whether the 2 mgd DIF threshold for covered intake structures is

met. F. Would My Facility Be Covered Only If It Is a Point Source Discharger? Today’s rule applies only to facilities that have an NPDES permit or are required to obtain one. This is the same requirement EPA included in the Phase I new facility rule at § 125.81(a)(1). Requirements for complying with CWA section 316(b) will continue to be applied through NPDES permits. On the basis of the Agency’s review of potential existing facilities that employ cooling water intake structures, the Agency anti cipates that most facilities will control the intake structure that supplies them with co oling water, and discha rge some combination of their cooling water, wastewater, or stormw ater to a water of the United States through a point source regulated by an NPDES permit. In such cases, the facility’s NPDES permit*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 35 of 642 must include the requirements for the cooli ng water intake structure. If an existing facility’s only NPDES permit is a general permit for stormwater discharges, the Agency anticipates that the Director will writ e an individual NPDES permit containing requirements for the facility’s cooling water intake structure. Alternatively, requirements applicable to cooling water intake structures could be incorporated into general permits. If requirements are placed into a general perm it, they must meet the requirements set out
at 40 CFR 122.28. As EPA stated in the preamble to th e final Phase I rule (66 FR 65256, December 18, 2001), the Agency encourages the Director to closely examine scenarios in which a facility withdraws significant amounts of cooling water from waters of the United States but is not required to obtain an NPDES permit. As appropriate, the Director must apply other legal requirements, where applicab le, such as CWA sections 401 or 404, the Coastal Zone Management Act, the Nationa l Environmental Policy Act, the Endangered Species Act, or similar State or Tribal authorities to address adverse environmental impact caused by cooling water intake structures at those facilities. G. Would My Facility Be Covered If It Withdraws Water from Waters of the United States? What If My Facility Obtains Cooling Water from an Independent Supplier? The requirements in today’s rule apply to co oling water intake st ructures that have the design capacity to withdraw amounts of wa ter greater than 2 mgd from waters of the United States. Waters of the United States in clude the broad range of surface waters that meet the regulatory definition at 40 CFR 122.2 and 40 CFR 230.3 , which includes lakes,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 36 of 642 ponds, reservoirs, nontidal rivers or streams, tid al rivers, estuaries, fjords, oceans, bays, and coves. These potential sources of c ooling water can be adversely affected by impingement and entrainment. Some facilities use an impoundment such as a man-made pond or reservoir as part of theira cooling system. Cooling water is wit hdrawn from the pond or reservoir at one point and heated water is discharged to a different point, using mixing and evaporative
processes. These impoundments can be closed syst ems if the pond or reservoir was not constructed by impounding a water of the U.S. In these cases impoundments may constitute a closed-cycle cooling system a nd therefore might already comply with some of or all the technology-based requirements in today’s rule . However, facilities that withdraw cooling water from impoundments that areAs explained above, section 316(b) and today’s final rule apply only to withdrawals of cooli ng water from waters of the United States; accordingly, to the extent a f acility withdraws coo ling water from a pond or reservoir that is not itse lf a water of the United Stat es and does not withdraw any make-up water from waters of the U.S., the re quirements of today’s rule do not apply to such systems. Impoundments that are not cons tructed from a waters of the U.S. but do withdraw make-up water from waters of th e U.S. can be closed-cycle recirculating systems subject to the requirements of today’ s rule, provided that withdrawal for makeup water is minimized. Facilities that withdraw cooling water fr om impoundments that are in whole or in part waters of the United States and that meet the other criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 37 of 642 subject to today’s rule. In some cases, water is withdrawn from a water of the United States to provide make-up water for the impoundment.In today’s rule, the agency is defining the term closed-cycle recirculating system to include, at § 125.92(c)(2), a system with impoundments of waters of the U.S. where the impoundment was lawfully created 6 for the purpose of serving as part of the c ooling water system. In determining whether an impoundment qualifies as a closed-cycle recirc ulating system, the Director will determine whether the make-up water withdrawals fo r such a system have been minimized. In many cases, EPA expects that such make-up water withdrawals are commensurate with the flows of a closed -cycle cooling tower , and again the facility might already comply with requirements to reduce its intake fl ow under the rule. In those cases where the withdrawals of make-up water come from a wa ter of the United States, and the facility otherwise meets today’s criteria for coverage (including a DIF of greater than 2 mgd), the facility will be subject to today’s rule requirements. So me of these impoundments may qualify for the waste treatment exclusion f ound in the definition of a waste treatment system at 40 CFR 122.2, and this rule does not affect the applicability of that exclusion

. EPA does not intend for this rule to change the regulatory status of impoundments. Impoundments are neither categorically included nor categorically

6 The owner or operator of the facility would provide documentation such as the project purpose statement for the Clean Water Act section 404 permit obtained to construct the impoundment. If the impoundment was created prior to the CWA requirement to obtain a section 404 permit, the owner or operator would provide any other license or permit obtained to lawfully construct the impoundment for the purposes of a cooling water system.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 38 of 642 excluded fromaddressed in the definition of waters of th e United States at 40 CFR 122.2 and 40 CFR 230.3 . The determination whether an im poundment is a water of the United States is to be made by the Director on a site-spe cific basis. The EPA and the U.S. Army Corps of Engineers have jointly issued juri sdictional guidance concer ning the term waters of the United States in light of the Supreme Court’s decision in Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers , 531 U.S. 159 (2001) (SWANCC). A copy of that guidance was pub lished as an Appendix to an Advanced Notice of Proposed Rulemaking on the definiti on of the phrase waters of the United States, see 68 FR 1991, January 15, 2003, which is at http://www.epa.gov/owow/w etlands/pdf/ANPRM-FR.pdf . The agencies additionally published guidance in 2008 regardin g the term waters of the Un ited States in light of both the SWANCC and subsequent Rapanos case ( Rapanos v. United States , 547 U.S. 715 (2006)). The EPA published a proposed revision to the definition of “Waters of the United States” under the Clean Wate r Act on April 21, 2014 (see 79 FR 22188). EPA recognizes that some impoundments may be man-made waterbodies that support artificially managed and stocked fish populations. As a result, EPA has included a provision in today’s final rule to allow the Director to waive certain permit application requirements for such facilities. Note, however, that these facilities ar e still subject to the final rule. EPA acknowledges that the point of compliance for facilities located on impoundments may also vary depending on whetherwhere the facility withdraws from a water of the United States. As suchAgain, only cooling water systems with withdrawals*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 39 of 642 of cooling water from waters of the Unite d States are covered by section 316(b) and today’s rule. Because a facility may withdr aw cooling water from a water of the United States either directly or as makeup water for a closed-cycle cooling system , the Director
may impose requirements at the determine where within a facility’s main cooling water intake structure or at its makeup water withdrawal inta ke.is or are the facility’s point or points of compliance. The Agency recognizes that some facilities that have or are required to have an NPDES permit might not own and operate the inta ke structure that supplies their facility with cooling water. In addressing facilities th at have or are required to have an NPDES permit that do not directly control the intake structure that supplie s their facility with cooling water, § 125.91 provides (similar to th e new facility rule) th at facilities that obtain cooling water from a public water syst em, use reclaimed water from a wastewater treatment facility or desalinization plant, or use treated effluent are not deemed to be using a cooling water intake structure for pur poses of this rule. However, obtaining water from another entity that is withdrawing water from a water of the United States will be counted as using a cooling wate r intake structure for purposes of determining whether an entity meets the threshold requirements of th e rule. For example, facilities operated by separate entities might be located on the same , adjacent, or nearby property. One of these facilities might take in cooling water and then transfer it to other facilities that discharge to a water of the United States. Section 125.91( b) specifies that use of a cooling water intake structure includes obtai ning cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the supplier or suppliers*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 40 of 642 withdraw water from waters of the United Stat es but that is not itself a new or existing facility subject to CWA secti on 316(b), except if it is a public water system, a wastewater treatment facility or desalination plant providi ng reclaimed water, or a facility providing treated effluent for reuse as c ooling water pursuant to § 125.91(c)

. As a practical matter, the existing facilities subject to this rule are the largest users of cooling water and therefore typically require enoughwithdraw volumes of water for cooling water tothat warrant owning the cooling water in take structures. In some cases, such as at nuclear power plants or critical ba seload facilities, the need for cooling water includes safety and reliability reasons th at would likely preclude any independent supplier arrangements. Therefore, EPA expects this provision will have only limited applicability. EPA is nevertheless retaining the provision to preven t facilities from circumventing the requirements of today’s rule by creating arrangements to receive cooling water from an entity that is not itsel f subject to today’s rule and that is not otherwise explicitly exempt from today’s rule(such as drinking water or treatment plant discharges reused as cooling water). H. What Intake Flow Thresholds Result in an Existing Facility Being Subject to the Final Rule? EPA determines the cooling water flow at a facility in two ways. The first way is based on the DIF, which reflects the maximum intake flow the facility is capable of withdrawing. While this normally is limited by the capacity of the cooling water intake pumps, other parts of the cooling water inta ke system could impose physical limitations on the maximum intake flow the facility is capable of withdrawing. The second*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 41 of 642 waymethod for determining cooling water flow is based on the AIF, which reflects the actual volume of water withdrawn by the facil ity. EPA has defined AIF to be the average water withdrawn each year over the preceding three calendar years. 7 Both of these definitionsmethods are used in today’s rule. In this rule, EPA considered requirements based on the intake flow at the existing facility. Today’s final rule applies to facilities that have a total design intake capacityDIF of greater than 2 mgd (see § 125.91). 8 At a threshold of 2 mg d, today’s rule covers 99. 78 percent of the total water withdrawals by utilit ies and other industrial sources (if the other criteria for coverage are met), including 58which includes 70 percent of the manufacturing facilities , 70 percent of the non- utility facilities, and 100 87 percent of the utility facilities. 9 electric generators. EPA also chose the greater than 2 mgd threshold because it was consistent with the app licability criteria in the Phase I rule. 10 EPA has concluded that this threshol d ensures that the users of cooling water causing the most adverse environmental impact will be subject to the rule. There are substantial environmental benefits that will accrue with a threshold of 2 mgd. For example, EPA's analysis indicates that greater than 82 percent of impinged fish

7 For permit terms subsequent to the first permit issued under today’s rule, the rule defines AIF as the average flows over the 5 years in the previous permit term5 years

. 8 The 2004 Phase II rule would have applied to exis ting power-generating facilities with a design intake flow of 50 mgd or greater. Facilities potentially regulated by the Phase III rule had a DIF of greater than 2 mgd. 9 Utilities are regulated entities that provide electricity at a set price and typically include generation and transmission capabilities. Non-utilities produce power primarily for themselves or for sale to utilities. 10 For more information, see 65 FR 49067 /3 , August 10, 2000.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 42 of 642 mortality across all facilities w ould be prevented by this rule at this threshold. EPA also considered a threshold of 50 mgd. The reco rd includes 38 studies documenting IM at more than 40 facilities with flows lower than 50 mgd. Further, the industry questionnaire demonstrates that such facilities are twice as likely to have no controls in place for impingement or entrainment than are facilities with intake flows greater than 50 mgd. In addition, lower intake flow facilities can have similar impacts to those of larger flow facilities as sizable numbers of fish are impinged by lower flow facilities. Moreover, sitespecific impacts of lower flow facilities may be significant, particularly where threatened or endangered species are present. Although smaller flow facilities (those less than 50 mgd) constitute a large proportion of the total number of the f acilities regulated ( 476 of 1,065), the total compliance cost for these smaller facilities are only a small portion of the total compliance cost of the rule ($23 million of $275 million). Thus any perceived aggregate cost savings from setting the threshold higher than 2 mgd would be minimal. There is no appreciable difference in the cost effectiveness of the rule with a higher applicability threshold. For example, th e cost effectiveness of the rule with a threshold of 2 mgd is $0.42 per age-one equiva lent losses (A1E). At a threshold of 50 mgd the cost effectiveness would be $0.41 per A1 E. In addition, the incremental cost of the 2 mgd threshold relative to a 50 mgd thre shold is negligible for the electric power industry at less than 0.1 percent of annual el ectricity sector revenue, which exceeds $126 billion. The facility-lev el impacts are negligib le to zero at either 2 or 50 mgd threshold. At the 2 mgd threshold, only 5 (1 percent) of the manufacturing fac ilities have a cost-to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 43 of 642 revenue ratio exceeding 1 percent (but less th an 3 percent). While this drops to zero facilities at the 50 mgd threshold, the differen ce of 5 facilities out of 509 facilities is not significant. Costs for lower fl ow facilities are so small th at the average annual household utility bill would not measurably decrease by changing the threshold from 2 to 50 mgd. While 58 percent of the small facilities affect ed by the final rule are below 50 mgd, 40 percent of them already meet one of th e compliance alternatives for impingement mortality of the rule and likely would not need to install any additional compliance technologies. And small businesses account for only 17 percent of facilities at or below 50 mgd, demonstrating that there would not be a disproportionate impact on small businesses at a 2 mgd threshold. Thus, EPA concluded that the threshold of 2 mgd ensures that the users of cooling water causing the most adverse environmental impact are subject to the rule. Raising the threshold for applicability of the rule’s im pingement and entrainment requirements to 50 mgd as some commenters suggested was not supportable given the statistics and information described above. Raising the applicability threshold to 50 mgd would have meant that 476 facilities, almost half of the 1,065 facilities subject to the national standards set by today’s rule, would not be subject to the ru le. Ignoring so many f acilities when setting national standards fails to appl y the common sense approaches set forth in this rule for minimizing adverse environmental impacts fr om cooling water intake structures. Excluding such a large number of facilities from this rule would create regulatory uncertainty for those facilities since they would remain subject to CWA permitting*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 44 of 642 requirements, but without the benefits of the st ructure of this rule. Directors would have an obligation to establish controls on a case-by-case basis for these lower flow facilities using a BPJ analysis instead of using the mo re straightforward and transparent provisions of setting controls based on national standards contained in this rule. Such BPJ analyses can be uncertain, and can be time consuming and complex to develop for both Directors and owners and operators of facilities. Case-by-case BPJ permits (instead of permits based on the national standards in today’s rule) would likely increase the time and costs to states for such permits to be develope d, further delaying the minimization of adverse environmental impacts called for by CWA sec tion 316(b). Maintaining an applicability threshold of 2 mgd DIF best combines the shared goals of minimizing adverse environmental impacts as required by the CW A, and the predictability and flexibility contained in the rule. EPA acknowledges that there may be circ umstances where flexibility in the application of the rule may be called for and th e rule so provides. For example, some low flow facilities that withdraw a small proporti on of the mean annual flow of a river may warrant special consideration by the Director. As an illustra tion, if a facility withdraws less than 50 mgd AIF, withdraws less than 5 percent of mean annual flow of the river on which it is located (if on a river or stream), and is not co-located with other facilities with CWISs such that it contributes to a larger share of mean annual flow, the Director may determine that the facility is a candidate for consideration under the de minimis provisions contained at § 125.94(c)(11). In the case of f acilities on lakes and reservoirs,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 45 of 642 co-location would be better determined by multiple CWIS facilities on the same waterbody, rather than distance. In either case, the flexibilities contained in the rule for the Director to consider the site-specific characteristics of each intake st ructure within the nati onal standard provide a useful mechanism for facilities with lower intake flows and low impacts to be considered. EPA is continuing to base applicabilit y on DIF as opposed to AIF for several reasons. In contrast to AIF, DIF is a fixe d value based on the desi gn of the facility’s operating system and the capacity of the circ ulating and other water intake pumps. This provides clarity because the DIF does not vary with facility operati ons, except in limited circumstances, such as when a facility unde rgoes major modifications. On the other hand, actual flows can vary significantly over some times short periods. For example, a peaking power plant might have an AIF close to th e DIF during times of full energy production, but an AIF of zero during lengthy periods of standby. Use of DIF provides clarity as to regulatory status, is indicativ e of the potential magnitude of environmental impact, and avoids the need for monitoring to confirm a f acility’s status. For more information about these thresholds, see 69 FR 41611, July 9, 2004. Under this rule, all facilities wi th a DIF of greater than 2 mgd , that meet the other three criteria for appli cability of today’s rule, must submit basic information describing the facility, source water physical data, source water biological characterization dataSource Water Physical Data, Sour ce Water Biological Characterization Data , and cooling water intake system dataCooling Water Intake System Data . In addition, these facilities must submit additional facility-s pecific information including the selected*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 46 of 642 impingement compliance option, and operational st atus of each of th e facility’s units. 11 Certain facilities withdrawing the largest vol umes of water for cooling purposes have additional information and study requirements such as relevant biological survival studies and the Entrainment Characterizat ion Studyentrainment study as described below. The final rule uses AIF rather than DIF for purposes of determining which facilities must provide the information required in § 122.21(r)(9 )-(13), including an Entrainment Characterization Study.) through (1 3), referred to as the entrainment study. Thus, the rule provides that any facility subject to the rule with actual flows in excess of 125 mgd must provide an entrainment study with its permit application (which includes the Entrainment Characterization Study with its permit appli cation.at § 122.21(r)(9)). 12 Adverse environmental impacts from entrainmen t result from actual water withdrawals, and not the maximum designed level of withdr awal. Further, using actual flow might encourage some facilities to adopt oper ational practices to reduce their flows below 125 mgd AIF to avoid collecting supplemental data and submitting the additional entrainment characterization study. Furthermore, any facility th at has DIF greater than 2 mgd , that meets the other three criteria fo r applicability of today’s rule, is required to submit basic

11 The final rule contains streamlinedallows the Director to waive certain information submission requirements for facilities that already employ closed-cycle cooling. 12 For impoundments constructed in uplands or not in waters of the United States, the point of compliance for measuring AIF to determine if it is greater than 125 mgd is the intake into the impoundment from the waters of the United States.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 47 of 642 information that will allow the Director to veri fy its determination of whether it meets the 125 mgd AIF threshold. EPA has selected aan administrative threshold of 125 mgd AIF for submission of the Entrainment Characterization Study (as well as studies described at § 122.21(r)((7) and (10)-(13))entrainment study because this threshold will capture 90 percent of the actual flows but will apply to only 30 percent of existing facilities. ThisFurther, based on EPA’s data there are no closed-cycle recircul ating systems in use above this threshold. The 125 mgd AIF threshold will significantly limit facility burden at more than twothirds of the potentially affected facilitie s while focusing the Director on major cooling water withdrawals. Contrary to a number of public comments, however, EPA is not implying or concluding that the 125 mgd thre shold is an indicator that facilities withdrawing less than 125 mgd are (1) not causing any adverse impacts or (2) automatically qualify as meeting BTA. In other words, the threshold, while justified on a technical basis, does not result in exemptions from the rule. Instead, EPA is making a policy decision onas to which facilities must provide a certain level and type of information. The Director, of course, will re tain the discretion to require reasonable information to make informed decisions at the smaller facilities. The 125 mgd threshold is simply an administrative cutoff that focuses on the facilities with the highest intake flows and the highest likelihood of causing adve rse impacts; it is not an indicator that facilities under that thre shold are no longer of co ncern in the final rule. In today’s rule, EPA seeks to clarify that for some facilities, the DIF is not necessarily the maximum flow associated with the intake pumps. For example, a power*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 48 of 642 plant might have redundant circulating pumps, or might have pumps with a name plate rating that exceeds the maximum water through put of the associated piping. EPA intends for the DIF to reflect the maximum rate at which a plantfacility can physically withdraw water from a source waterbody (usually normalized to a daily rate in mgd). This also means that a plantfacility that has permanently taken a pump out of service should be able to consider such constraints when repor ting its DIF, as the facility’s capacity to withdraw water may have fundamentally chan ged. Additionally, if a facility’s flow is limited by constrictions in the piping or othe r physical limitations (e.g., a given portion of its cooling system that can only safely handl e a given amount of flow) and that flow is lower than the DIF for the pumps, the facility should be able to consider such constraints when reporting its DIF, because it is not cap able of withdrawing its full pumping DIF without compromising the cooling system.
I. What are the Requirements for Existing Offshore Oil and Gas Facilities, Offshore Seafood Processing Facilities or LNG Terminals BTA Requirements under the Final Rule ? Under today’s rule, existing offshore oil and gas facilities, existing offshore seafood processing facilities and existing LNG terminals will be subject to section 316(b) requirements on a BPJ basis. In the Phase III rule, EPA studied offshore oil and gas*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 49 of 642 facilities and offshore s eafood processing facilities 13 and could not identify any technologies (beyond the protectiv e screens already in use) th at are technically feasible for reducing impingement or entrainment in such existing facilities. 14 As discussed in the Phase III rule, known technologies that could further reduce impingement or entrainment would result in unacceptable changes in the enve lope of existing platforms, drilling rigs, mobile offshore drilling units, offshore seafood processing facilities, and similar facilities as the technologies would project out from the hull, potentially decrease the seaworthiness, and potentially interfere with st ructural components of the hull. It is also EPA’s view that for many of these faciliti es, the cooling water withdrawals are most substantial when the facilities are operating fa r out at sea and, therefore, not withdrawing from a water of the United States. EPA is aware that LNG fac ilities may withdraw hundreds of million gallons per day of seawater for warming (re-gasification). However, some existing LNG facilities might still withdr aw water where 25 percent or more of the water is used for cooling purposes on an actua l intake flow basis. EPA has not identified a uniformly applicable and available tec hnology for minimizing impingement mortality and entrainment at these fac ilities. However, technologies might be available for some

13 EPA studied naval vessels and cruise ships as part of its developing a general NPDES permit for discharges from oceangoing vessels. (For more information, see http://cfpub.epa.gov/npdes/home.cfm?program_id=350 .) EPA studied offshore seafood processing facilities and oil and gas exploration facilities in the 316(b) Phase III rule. 14 As discussed in today’s preamble, requirements for new offshore facilities that were set forth in the Phase III rule remain in effect.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 50 of 642 existing LNG facilities. LNG facilities that withdraw any volume of water for cooling purposes will be subject to site-specific, BPJ BTA determinations of BTA

. EPA has not identified any new data or appr oaches that would result in a different determination. Therefore, EPA has adopted th e approach of the proposed rule and is requiring that NPDES permit directorsPermit Directors , on a site-specificcase-by-case basis using BPJ, determine BTA for existi ng offshore oil and gas extraction facilities and, existing offshore seafood processing facilities , and existing LNG terminals

. J. What is a “New Unit” and How Are New Units Addressed Under the Final Rule? Today’s rule establishes requirements for new units at an existing facility that are different than the requirements that othe rwise applythose applicable to existing units at an existing facility. The requirements for new units at existing facilities are modeled after the requirements for a new facility in the Phase I rule. Today’sUnder today’s rule clarifies that , a “ new unit ” means a newly built, stand-alone unit, whose construction begins after the effective date of the rule . EPA is also clarifying that while Phase I does not include certain limited upgrades to units newly constructed at an existing unit. Instead,facility for the same general industrial operation, such units do constitute a new unit does mean the addition of a newly built, stand-alone unit or the modification of anat existing unit that is repowered or undergoes significant modifi cation such that both the turbinefacilities and condenser, as such, are replaced, except that the addition or modification of an existing un it to replace it with a high en ergy efficiency unit is not defined as a new unit. subj ect to today’s final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 51 of 642 On the basis of the public comments received on how to define “ new units (and repowering),unit,” EPA has sought to provideprovides a clear definition for these termsthis term in the final rule. In EPA’s view, these definitionsThe definition for a new unit at an existing facility establishestablishes a clear regulatory framework for both affected facilities and Directors. ItThis definition captures facilities that are undergoing major construction projects involving the construction of a new stand-alone unit , while not discouraging upgrades or the construction of new/replacement units.. For example, a nuclear facility conducting a measurement uncer tainty capture or a stretch power uprate , or a fossil-fuel facility repow ering an existing generating unit, would not be considered to result in the relevant unit becoming a new unit. As another example, under this definition placing an offshore facility or vessel into a dr y dock for maintenance or repair does not result in either the offshore facility, vessel, or the dry dock as being defined as a new unit. Section VI discusses EPA’s rationale for establishing the definitions for new units at existing facilities described below. A definition for high energy efficiency units is also provided in Section VI.
1. Electric Generators The final rule defines two types of units as a a new unit at an existing facility

. First, as a newly built, stand-alone unit (i.e., a unit where a new c ondenser and turbine are built) that is constructed at an existing facility ( and that does not meet the definition of a new facility ) will be defined as a new unit. Second, an. An existing unit that is repowered or undergoes significa nt modifications ( to a degreesuch as where both the turbine and condenser are replaced) will also beis not considered a new unit at an existing facility,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 52 of 642 except where replaced with high energy efficien cy units. High energy efficiency units are those that use less fuel, measured as BTU (British thermal units), to produce a kWh (kilowatt hour) of elec tricity. The definition of high energy efficiency units at § 125.92 includes a numeric threshold for high energy efficiency. Under the second category, several types of modifications will not lead to considering the unit as a new unit, thereby defining the unit as an existi ng unit. In such cases, the ex isting unit will be regulated under the existing unit provisions of this rule, and the unit will not be subject to categorical requirements to reduce intake flow to a level commensurate with closed-cycle cooling.

. Exhibit I- 34 below provides several examples and whether these hypothetical units will be defined as new or existing units.

Exhibit I- 34 . Examples of new and existing units at existing electric generatorsgeneration facilities Examples of new units at an existing facility Examples of existing units A unit that is constructed at a stand-alone location at

an existing facility (either adjacent to existing units or on newly acquired or developed property) A unit where only the turbine is replaced, but not both the turbine and condenser

A unit that is repowered, including the replacement

of both the turbine and condenser (regardless of the change in generating capacity, the change in cooling water intake flow, or the use of an existing intake structure), except in the case of high energy efficiency units A unit where modifications are made to the turbine and/or condenser (e.g., optimization, repairs, upgrades to operational elements up to, but not including full replacement of the turbine or condenser, etc.)

An existingA unit is retired before or after a new

unitthat is constructed as a replacement (regardless of the change in generating capacity, the change in cooling water intake flow, or the use ofat a stand-alone location at an existing intake structure ) Increases in efficiency of the generating system that do not require replacement of the turbine or condenser, such as uprates at a nuclear generating unit*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 53 of 642 An existing unit is retired and demolished, with a

new unit constructed in the former unit’s location as a replacement (regardless of the change in generating capacity, the change in cooling water intake flow, or the use of an existing intake structure) A unit where a new boiler or fuel type is employed (e.g., a new heat recovery steam generator and combustion turbine is connected to an existing steam turbine and condenser)

An existing unit is retired and repowered in place,

including the replacement of the turbine and condenser (regardless of the change in generating capacity, the change in cooling water intake flow, or the use of an existing intake structure), except in the case of high energy efficiency units A unit where upgrades or modifications are made to elements of the system unrelated to the turbine or condenser (e.g., boiler upgrade, modifications to control systems, addition or modification of air pollution controls, etc.)

2. Manufacturers At manufacturing facilities that generate electricity onsite, the previous discussion of how to define new units at existing electric generatorsgenerating facilities generally applies. Some manufacturers employ different industrial processes than an electric generator and therefore have different indus trial equipment (incl uding cooling systems). In particular, manufacturers may not use a st eam condenser or steam turbine for their industrial processes, making the definition for “repowering” above inappropriate for manufacturing facilities. However, manufacturers domay have opportunities to reuse cooling water that power plants maydo not, and in site visits, EPA found many manufacturers have conducted energy and wate r audits resulting in significant reductions in water withdrawals. The final rule provides for manufact urers to receive credit for such reductions in fresh water withdrawals,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 54 of 642 AIt is not as easy to identify a similar conceptual approach for defining new manufacturing units with a new or replaced cooling sy stem is not as easily defined sinceat existing manufacturing facilities because waste heat can be generated from a variety of sources including exothermic pr ocesses, product heating and cooling, and the processing, handling, treating, or disposal of feed streams, waste streams, by-products, and recycled components. Sources may include direct cooling transferred across an inert material (e.g., heat exchanger, steam condens er), indirect cooling using a working fluid (e.g., chillers, refrigeration), or contact cool ing where cooling water comes into direct contact with a product or process stream. 15 Unlike electric generatorsgenerating units where the majority of cooling water comes from a single process source (the steam condenser), manufacturing units may incl ude many separate non-contact or contact cooling water sources dispersed throughout the production processes and the facility. Thus, a definition for manufacturing units with a new or replaced cooling system must take into considerati on a broader category of cooling water sources. The conceptual equivalent of a steam turb ine at a manufacturing unit would be the equipment that serves as the major source of waste heat associated with non-contact cooling water. The conceptual equivalent for the steam condenser would be the heat

15 Note that EPA did not include the contact cooling category as part of its analysis of possible closed-cycle coolingrecirculating system requirements but contact cooling water does nonetheless fall within the definition of cooling water at § 125.92.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 55 of 642 exchange/transfer equipment that contributes heat to the non-contact cooling water. Thus, the final rule defines a new manufacturing unit as follows: Any newly built production units or replacement production units where the majority of the waste heat-produci ng equipment that serves as sources of non-contact cooling water and the majority of the heat exchanging equipment that contributes heat to the non-contact cooling water are newly installed or replaced.
While this definition may provide sufficient guidance regarding which manufacturing plant modifications are considered to be new un its, the definition of “unit” itself may require some clarification. For power generators, the te rm “generating unit” is quite clear since there is only one product (e lectricity), the non-contact cooling water predominantly comes from one source, and th e application of the term is well understood in the industry. But for some manufacturing faci lities, it may be unclear what constitutes a “unit” since manufacturing processes can involve numerous vertically integrated processes or production steps that may involve intermediate products. For example, a unit could encompass an entire series of producti on steps (start to finish) or simply the individual steps. Also, there may be ancill ary support equipment that serves various functions and it is not clear wh ether this will be considered a unit or part of a unit. To provide flexibility for these complexities, the final rule allows the Director broad discretion in making such determinations. 16

16 Example definitions the Director might use could include:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 56 of 642 For example, a petroleum refiner will typically include various processes such as distillation, cracking, hydrotre ating, coking, reforming, and di fferent types of various products. Various intermediate products from these processes may be directly transported (piped) from one process to another or stored and some may be sold. And because various intermediate and final process produc ts may be blended into different products, differentiating units on a product or intermed iate product basis may not provide clear distinctions. In summary, at a manufacturer, there are also two types of uni ts that are defined as a new unit at an existing facility. First, a newly built, stand-alone unit (i.e., a unit where a new cooling system is built) that is constructed at an existing facility (and that does not meet the definition of a new facili ty) is defined as a new unit. Second, an existing unit that undergoes significant modi fications (to a degree where the cooling system is replaced) is also a new unit at an existing facility including but not limited to the addition of a new produc tion line. Under the second category, several types of modifications do not lead to c onsidering the unit as a new un it, thereby defining the unit as an existing unit. In such cases, the existing unit is re gulated under the existing unit

 A new unit may include distinct production lines that are added to increase product output and operate parallel and independently of existing production equipment.

 A new unit may include the replacem ent or rebuilding of distinct production lines or distinctprocesses where the majority of the waste heat producing equipment that serve as sources of noncontact cooling water and the majority of the heat exchanging equipment th at contributes heat to the non-contact cooling water are replaced. This does not necessarily include replacement/upgrade of individual components or ancillary equipment alone.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 57 of 642 provisions of this rule, and the unit is not subject to automatic requirements to reduce intake flow to a level commensur ate with closed-cycle cooling. For these reasons EPA has defined new unit to simply mean a new stand-alone unit. A new unit may include one or more di stinct production lines that are added to increase product output and ope rate parallel to and indepe ndently of existing production equipment. A new unit does not include the replacement or rebuilding of one or more distinct production lines or distinct processe s involving the replacement of the majority of the waste heat producing equipment that serves as sources of non-contact cooling water and the majority of the heat exchanging e quipment that contributes heat to the noncontact cooling water. Such modifications alone do not render the unit a new unit. A unit undergoing such modifications would continue to be considered an existing unit and would be regulated under the existing unit provisions of this rule. This definition therefore does not impose any disincentives for the replacement/upgrade of individual components or ancillary equipment alone. Exhibit I- 45 below provides several examples andof whether these hypothetical units are defined as new or existing units . As noted above, the Director has broad discretion to assess the scope of any modifications at the ma nufacturing facility and to determine whether the most appropriate scale for defi ning the term “new construction comprises a stand-alone unit .”. For the purposes of today’s final rule, however, the Director should remain focused on does not need to address whether the stand-alone unit is for the cooling system and cooling water withdr awals, as manufacturing sites can be very complex, with intricate process flow s, production lines, and other elements. But*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 58 of 642 thesame general industrial purposes, or whethe r the new unit is a replacement unit. The key factors in assessing whether a un it will be defined as new lies with the cooling water use; these other complexities are ultimately not relevant to the determinationwhether the construction results in a stand-alone unit

.
Exhibit I- 45 . Examples of new and existing units at manufacturers Examples of new units at an existing facility Examples of existing units at an existing facility A unit that is constructed at a stand-alone location at

an existing facility (either adjacent to existing units or on newly acquired or developed property) A unit where only the waste heat generating process equipment or the cooling system equipment is replaced , but not both A unit that is modified, in cluding the replacement of

the majority of the waste heat generating process equipment and the cooling system (e.g., heat exchanger, chiller) (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure)A unit that is constructed adjacent to an existing unit for the same industrial activity (such as expanding the production output by building a second unit as a stand-alone unit next to the existing unit) A unit where modifications are made to the waste heat generating process equipment or the cooling system (e.g., optimization, repairs, upgrades to operational elements up to, but not including full replacement))

An existing unit is retired before or after a new unit

is constructed as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure) Replacement or upgrade of ancillary equipment (e.g., pumps, motors, HVAC, etc.) Increases in efficiency of the system that do not require replacement of the waste heat generating process equipment and the cooling system An existing unit is retired and demolished, with a

new unit constructed in the former unit’s location as a replacement (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure) A unit where upgrades or modifications are made to elements of the system unrelated to the cooling system (e.g., production equipment upgrade or replacement, modifications to control systems, addition or modification of air pollution controls, etc.) An existing unit is retired and rebuilt in place,

including the replacement of the waste heat Replacement or upgrade of ancillary equipment (e.g., pumps, motors, HVAC, etc.)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 59 of 642 generating process equipment and the cooling system (regardless of the change in production capacity, the change in cooling water intake flow, or the use of an existing intake structure)

K. Amendments Related to the Phase I Rule EPA is making limited changes to the Phas e I rule at 40 CFR Part 125 Subpart I. The changes fall into two categories. The first is deleting the provision in the Phase I rule that would allow a facility to demons trate compliance with the Phase I BTA (best technology available) requirements in whole or in part through restoration measures. This change responds to the decision of the U.S. Court of Appeals for the Second Circuit, which remanded these provisions to EPA becau se it concluded that the statute did not authorize restoration measures to comply with CWA sec tion 316(b) requirements. The second category of changes reflec ts technical corrections or e rrors that do not change the substance of the Phase I rule. EPA has not reop ened any other aspects of the Phase I rule other than the provisions specifically noted here. 1. Restoration Provisions Not Authorized The Phase I final rule established tw o compliance tracks. Track I requires facilities to restrict intake flow and velo city. Track II gives a f acility the option of demonstrating to the Director that the control measures it em ploys will reduce the level of adverse environmental impact to a comparab le level to what would be achieved by meeting the Track I requirements. As part of this demonstration, Track II originally allowed a facility to make use of restoration measures. The Comprehensive*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 60 of 642 Demonstration Study allowed a quantitative or qualitative demonstrat ion that restoration measures would meet, in whole or in part, th e performance levels of Track I. Similarly, the Verification Monitoring Plan could be tailor ed to verify that the restoration measures would maintain the fish and shellfish in the waterbody at a substantially similar level to that which would be achieved under Track I. See 66 FR 65280–65281, December 18,
2001. Upon legal challenge, the Second Circuit Court concluded that EPA exceeded its authority by allowing new facilities to comply with CWA section 316(b) through restoration measures, and remanded that aspect of the rule to EPA. The Supreme Court did not grant the petitions for writs of cer tiorari concerning rest oration provisions. Today’s final rule amends Phase I to remove those provisions in §§ 125.84(d) and 125.89(b)(1)(ii) authorizing rest oration measures in conf ormance with the Second’s Circuit’s decision. Today’s rule also specifically deletes permit application requirements contained in the Comprehensive Demonstrati on Study at § 125.86(c)(2)( ii); evaluation of proposed restoration measures at § 125.86( c)(2)(iv)(C); and ve rification monitoring requirements at § 125.86(c)(2)(iv)(D)(2) th at are specific to restoration. EPA acknowledges these changes might reduce the alternatives availabl e to some Phase I facilities. EPA notes, however, that the de letion of restoratio n measures does not otherwise alter the availability of Track II. In any event, EPA’s determination of BTA for Phase I did not presume reliance on the rest oration provisions, and the deletion of restoration measures in no way alters the Agency’s BTA determination for Phase I facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 61 of 642 2. Corrections to Subpart I Today’s final rule changes the applicabil ity of the technical requirements at § 125.84 and permit application requirements at § 125.86 statement to match the applicability statement at § 125.81(a)(3). The appli cability in all thr ee instances should specify DIF or withdrawals “greater” than th e specified value of 2 mgd. See Basis for the Final Regulation at 66 FR 65270, December 18, 2001. Today’s rule also corrects the source water bodywaterbody flow information submission requirements. Track I requiremen ts at § 125.84(b)(3) appl y to new facilities that withdraw equal to or greater than 10 mgd. Track I requirements at § 125.84(c)(2) apply to facilities that withdraw less than 10 mgd. The source water bodywaterbody flow information under § 125.86(b)(3) requires a faci lity to demonstrate it has met the flow requirements of both §§ 125.84(b)(3) “and” 125.84( c)(2). However, a facility cannot be subject to both §§ 125.84(b)(3) and 125.84(c)(2) at the same time. Accordingly, the word “and” should read as “o r” in § 125.86(b)(3). In addition, today’s fi nal rule corrects the permit application requirement for the Source Water Biological Characterization at § 122.21(r)(4). Accordingly, references to the Source Water Biological Characterizati on should read as (r)(4). However, the references to the Source Water Biological Characterization at § 125.86(b)(4)(iii), at § 125.87(a), and at § 125.87(a)(2) incorrectly refer to § 122.21 (r)(3) and are thus being corrected.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 62 of 642 II. Legal Authority for and Background of the Final Regulation A. Legal Authority Today’s final rule is issu ed under the authority of CWAClean Water Act sections 101, 301, 304, 308, 316, 401, 402, 501, and 510, 33 U.S.C. 1251, 1311, 1314, 1318, 1326, 1341, 1342, 1361, and 1370. B. Purpose of the Regulation The purpose of today’s rule is to redu ce impingement and entrainment of fish, shellfish and other aquatic organisms at cooling water intake structures. Today’s rule establishes national requirements for cooling wa ter intake structures at existing facilities under section 316(b) of the CWA. That section provides that any standard established pursuant to CWA sections 301 or 306 and applicable to a point source must require that the location, design, construction, and capacity of cooling water intake structures reflect the BTA for minimizing adverse environm ental impact. Today’s rule establishes requirements applicable to all existing power-generating facilities and existing manufacturing and indus trial facilities that are point sources, that have a DIF of greater than 2 mgd from waters of the United States , and use at least 25 percent of the water they withdraw exclusively for coo ling purposes on an actual inta ke flow basis. In addition, EPA is today also making minor changes to theits earlier rule establishing section 316(b) requirements for new facilities. Specifical ly, EPA is removing a provision that would have allowed a restoration-based alternative for complying with performance standards as well as the associated monitoring and other requirements for demonstrating compliance.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 63 of 642 C. Background 1. The Clean Water Act a. General The Federal Water Pollution Contro l Act, also known as the CWA (Clean Water Act),, 33 U.S.C. 1251 et seq., seeks to “restore and maintain the chemical, physical, and biological integrity of the nation’s waters.” 33 U.S.C. 1251(a). Among the goals of the Act is, wherever attainable, an interim goa l of water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the water. 33 U.S.C. 1251(a)(2). In furtherance of these objectives, the CWA establishes a comprehensive regulatory program, key elements of which are (1) a prohibition on the discharge of pollutants from point sources to waters of the United States, except in compliance with the statute and (2) authority for EPA or aut horized States or Tribes to issue NPDES permits that authorize and regulat e the discharge of pollutants. CWA section 402 authorizes EPA (or an aut horized State or Tr ibe) to issue an NPDES permit to any person discharging any po llutant or combination of pollutants from a point source into waters of the United States. Forty- sevensix States and one U.S. territory are authorized u nder section 402(b) to administer the NPDES permitting program. NPDES permits restrict the types a nd amounts of pollutants, including heat, that may be discharged from various industrial, commercial, and other sources of wastewater. These permits control the di scharge of pollutants by requi ring dischargers to meet technology-based and possibly water-quality-b ased effluent limitations. Under section*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 64 of 642 316(b), NPDES permits are required to contain conditions to implement the requirements of section 316(b). CWA section 510 provides that, except as provided in the CWA, nothing will preclude or deny the right of any State (or po litical subdivision th ereof) to adopt or enforce any requirement respecting control or abatement of pollution; except that if a limitation, prohibition or standard of performan ce is in effect under the CWA, such State may not adopt any other limitation, prohibition, or standard of performance which is less stringent than the limitation, prohibition, or standard of performance under the Act. EPA interprets this to reserve for the States aut hority to implement requirements that are more stringent than the Federal re quirements under state law. PUD No. 1 of Jefferson County v. Washington Dep't of Ecology , 511 U.S. 700, 705 (1994). New York and California have enacted State requirements that are at least as stringent as those of the final rule, and therefore, EPA has analyzed facilities in those States that are subject to those State requirements as already complying with the final rule. 17 Those facilities still must comply with the administrative requi rements of the final rule. CWA sections 301, 304, and 306 require that EPA develop technology-based effluent limitations guidelines and new source performance standards that are used as the basis for discharge requirements in wastewat er discharge permits. EPA develops these effluent limitations guidelines and standards for categories of industrial dischargers on

17 For example, California policy addressing 19 coasta l power plants would not affect the compliance costs of inland facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 65 of 642 the basis of the pollutants of c oncern discharged by the industry in a relatively predictable manufacturing process , the degree of control that can be attained using various levels of pollution control technology a ppropriate for each industria l process or subcategory, consideration of various economic tests impl emented under the author ity of the CWA for each level of control, and other factors identified in CWA sections 304 and 306 (such as non-water quality environmental impact s including energy impacts). EPA has promulgated regulations setti ng effluent limitations guidelines and standards under CWA sections 301, 304, and 306 for 57 industry ca tegories. See 40 CFR parts 405 through 471. EPA has established effluent limitations gui delines and standards that apply to the industry categories that are th e largest users of cooling wa ter (e.g., steam electric power generation, paper and allied products, petroleu m refining, iron and steel manufacturing, and chemicals and allied products ), as well as many other indu strial categories that may include facilities subject to this final rule. b. Section 316(b) Section 316(b) states, in full, Any standard established pursuant to section 301 or section 306 of [the Clean Water] Act and applicable to a point source shall require that the location, design, construction, and cap acity of cooling water intake structures reflect the best technol ogy available for minimizing adverse environmental impact. 33 U.S.C. 1326(b). This provision is uni que among CWA provisions because it addresses the adverse environmental impact caused specifically by the intake of cooling water, in contrast to other provi sions of the Act that regulate the discharge of pollutants into waters of the United States.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 66 of 642 The CWA does not further define the subs tantive standard specified in section 316(b) – “best technology available for mi nimizing adverse environmental impact” (BTA). 33 U.S.C. 1326(b). The standard that cooling water intake structures must achieve under section 316(b) – BTA – is a diffe rent standard from those prescribed under sections 301 and 306 of the Act. Riverkeeper, Inc. v. v. EPA , 358 F.3d 174 (2d Cir. 2004). Moreover, unlike Sectionssections 304 and 306, Sectionsection 316(b) does not set forth the specific factors that the EPA must cons ider in determining BTA. BTA is “the only substantive statutory requirement explicitly applicable to the intake structure regulations.” Id. at 186. Unlike other provi sions of the Act, section 316(b) standards are not subject to a “host” of other requirements or limitations. Ibid . There is no “elucidating language applicable to the BTA test.” Entergy Corp. v. Riverkeeper, Inc. , 556 U.S. 208, 221 (2009). 18 Section 316(b) does, howe ver, cross-reference Sectionssections 301 and 306 of the CWA by stating that any st andards established pursuant to those sections also require that cooling water intake structures reflect BTA. Ibid. This cross reference, in the view of the Second Circuit, is an invitation, not a st raitjacket. EPA “may” look to the referenced sections in discerning what factors Congre ss intended EPA to consider in determining
BTA.

18 Included in an appendix to th e decision is a table comparing CW A statutory standards under 301, 306 and 316(b), the table. In the column headed “Statuto rily Mandated Factors,” for section 316(b), the table states “N/A.”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 67 of 642 Because section 316(b) refers to sections 301 and 306 but provides a different standard ("best technology available for minimizing adverse environmental impact" instead of, for example, "b est available demonstrated control technology") and does not explicitly provide that regulations pursuant to section 316(b) are subject to the requirements of sections 301 and 306, we think it is permissible for the EPA to look to those s ections for guidance but to decide that not every statutory directive contained therein is applicable to the Rule. The terse statutory description of BTA and the absence of any prescribed statutory factors for consideration in determining BTA suggest that Congress delegated EPA significant rulemaking discretion in this area. 19 As notedAs noted, in contrast to efflue nt limitations guidelines and standards , the CWA does not describe the factors to be considered in establishing section 316(b) substantive performance requirements that reflect the “best technology available for minimizing adverse environmental impact” nor does it require that EPA develop uniform nationally applicable performance requirements through rule making. The U. S. Supreme Court has, howev er, recently provided guidance, in Entergy Corp. v. Riverkeeper, Inc., in interpreting section 316(b) and what factors EPA may consider in its standard-set ting. That decision addressed the question of whether CWA section 316(b) authorizes EPA to compare co sts and benefits of various technologies

19 The Second Circuit has noted the limited legislative hi story for section 316(b). “This paucity of legislative history, when measured against the volumes of drafts and speeches devoted to other aspects of the 1972 amendments, and when combined with the brevity of the provision itself, counsels against imputing much specific intent to Congress beyond the section's words themselves. To the extent the provision is silent on issues to which other sections speak, we hesitate to draw the negative inference that the brevity of section 316(b) reflects an intention to limit the EPA's authority rather than a desire to delegate significant rulemaking authority to the Agency.” Id. at 187.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 68 of 642 when setting national performance standards fo r cooling water intake structures under CWA section 316(b). In overtur ning EPA’s earlier rule to establish section 316(b) requirements for existing facilities, the S econd Circuit held that balancing costs and benefits was an impermissible factor for standard setting under section 316(b). The Supreme Court reversed and remanded the Second Circuit ruling in a 6-3 opinion authored by Justice Scalia. The Court held that it is permissible for EPA to consider a cost-benefit analysis in setti ng national performance standards for cooling water intake structures under section 316(b) . The Court held that EPA ha s the discretion to consider costs and benefits under section 316(b) but is not required to do so. 556 U.S. 208, 222-23

. The Court’s discussion of the language of section 316(b)—section 316(b) is “unencumbered by specified statutory factors” —and its critique of the Second Circuit’s decision affirms EPA’s broad discretion to c onsider a number of factors in standard setting under section 316(b). While the Supreme Court’s decision is limited to whether or not EPA may properly consider one factor (cost/benefit an alysis) under s ection 316(b), the language also indicates that EPA has wide discretion in considering other factors that it deems relevant to 316(b) standard setting. 556 U.S. 208, 222 (2009) (“It is eminently reasonable to conclude that § 1326b ’s silence is meant to convey nothing more than a refusal to tie the agency’s hands as to whether cost-benefit analysis should be used, and if so to what degree .” 556 U.S. 208, 222 (2009)..”). Regarding the other factors EPA may , but is not mandated to, consider, as noted above, section 316(b) cross references CWA sections 301 and 306 by requiring that any standards established pursuant to those sections also mu st require that the location,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 69 of 642 design, construction and capacity of intake structures reflect BTA. Following the decisions of the Second Circuit in reviewing both the Phase I and Phase II rules, EPA has interpreted the cross reference as authorizing consideration of the same factors considered under those provisions to help guide section 316(b) rulemaking without determining that each of those f actors is applicable to this rule . Thus, for example, section 306 directs EPA to establ ish performance standards for new sources based on the BADT (best available demonstrated cont rol technology). 33 U.S. C. 1316(a)(1). In establishing BADT, EPA “shall take into c onsideration the cost of achieving such effluent reduction, and any non-water qua lity environmental impact and energy requirements.” 33 U.S.C. 1316(b)(2)(B). Similarly, CWA section 301 requires EPA to establish standards known as effluent limitations guidelines for existing point source discharges in two phases. In the first phase, applicable to all pollutants, EPA must establish effluent limitations based on the BPT (best practicable control tec hnology currently available). 33 U.S.C. 1311(b)(1)(A). In establishing BPT, the CWA di rects EPA to consider the total cost of application of technology in re lation to the effluent reducti on benefits to be achieved from such application, and to also take into account the age of the equipment and facilities involved, the process employed, the engineering aspects of the application of various types of control techniques, proce ss changes, non-water quality environmental impacts (including energy requirements), and such other factors as EPA deems appropriate. 33 U.S.C. 1314(b)(1)(b).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 70 of 642 EPA must also establish effluent limita tions for conventional pollutants based on the BCT (best conventional pol lution control technology), and for toxic pollutants based on the BAT (best available technology economically achievable). 33 U.S.C. 1311(b)(2)(A), (E). In determining BCT, EPA must consider, among other factors, the relationship between the costs of attaining a reduction in effluents and the effluent reduction benefits derive d, and the comparison of the cost and level of reduction of such pollutant s from the discharge from publicly owned treatment works to the cost and level of reduction of such pollutants from a class or category of industry source.... and the age of equipment and facilities involved, th e process employed, the engineering aspects .... of various types of contro l techniques, process changes, the cost of achieving such effluent re duction, non-water quality environmental impacts (including energy requirements) , and such other factors as [EPA] deems appropriate. 33 U.S.C. 1314(b)(4)(B) In determining BAT, the CWA directs EPA to consider “the age of equipment and facilities involved, the process employed, the engineering aspects .... of various types of control techniques, process ch anges, the cost of achieving such effluent reduction, nonwater quality environmental impacts (includi ng energy requirements), and such other factors as [EPA] deems appropr iate.” 33 U.S.C. 1314(b)(2)(B) While Section, in establishing standards know n as effluent limitations guidelines, to consider specified factors. For a comp lete discussion of f actors considered in establishing section 301 effluent limits , see 76 FR 22178-22179, April 20, 2011. But, EPA in establishing section 316(b) standard s is not constrained in what factors it considers or bound by any statutor ily prescribed tests as is the case with sections 301 and 306. Consequently, while section 316(b) expressly refers to section 301 and 306, and,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 71 of 642 while it shares some of the same words us ed in sections 301(b) and 306, its language is different. 20 These differences in the statutory desc riptions, coupled with the brevity of section 316(b) itself, prompt EPA to look, in part, toexamine the factors described in section 301, 306 and, ultimately, section 304 aswhere relevant factors in determiningEPA’s determination of the “best technology availa ble to minimize adverse environmental impact” of cooling water for intake structures for existing facilities. 21 By the same token, however, asAs noted above , there are significant differences between section 316(b) and sections 301, 304 and 306. See Riverkeeper, Inc. v. United States Environmental Protection Agency (2nd Cir. Feb. 3, 2004) (“not every statutory directive contained [in sec tions 301 and 306] is applicab le” to a section 316(b) rulemaking). Moreover, as the Supreme Court recognized, while the provisions governing the discharge of toxic pollutants must require the e limination of discharges if technically and economically achievable, se ction 316(b) has the less ambitious goal of “minimizing adverse environmental impact.” 556 U.S. at 219. In contrast to the effluent limitations provisions, the object of the best technology available is explicitly articulated

20 Compare “best technology available for minimizi ng adverse environmental impacts” with “best practicable control technology currently available”( 301(b)(1)A)), “best conventional pollutant control technology (301(b)(2)(E)) “best available technology economically achievable” (301(b)(2)(A)), and best available demonstrated control technology, (306(b)(1)(B)). Section 316(b), section 301(b)(1)(A)—the BPT provision— section 301(b)(2)(E) – the BCT provision -- section 301(b)(1)(B)—the BAT provision— and section 306(b)(2)(E). All include th e terms “best,” “technology,” and “avai lable,” but none also include the modifying phrase “for minimizing adverse environmental impacts,” found in section 316(b). See 33 U.S.C. 1311(b)(1)(A) and (2)(A). 21 As noted here, the term BTA means “best technolo gy available for minimizing adverse environmental impact.” In the interests of brevity, the acronym will frequently be used in the preamble to reflect the entire definition.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 72 of 642 by reference to the receiving water: to mi nimize adverse environmental impact in the waters from which cooling water is withdrawn. This difference is reflected in EPA’s past practices in implementing sections 301, 304, andas contrasted with 316(b). For example, EPA has established BAT effluent limitati ons guidelines and new source performance standards on the basis of the efficacy of one or more technologies to reduce pollutants in wastewater in relation to th eir costs without necessarily considering the impact on the receiving waters. This contrasts to 316(b) requirements which historically have been developed on a site-specific basis, where EPA has considered the costs of technologies in relation to the benefits of minimizing a dverse environmental impact in establishing 316(b) limitsrequirements . In Re Public Service Co. of New Hampshire, 10 ERC 1257 (June 17, 1977); In Re Public Service Co. of New Hampshire, 1 EBAD 455 (Aug. 4, 1978); Seacoast Anti-Pollution League v. Costle, 597 F. 2d 306 (1st Cir. 1979). EPA concluded that, because both section 301 a nd 306 are expressly cross-referenced in section 316(b), EPA could reasonably in terpret section 316(b ) as authorizing consideration, where appr opriate, of the same factors, including costs , as in those sections even if not in the same way. Over the years, EPA has interpreted best technology available in section 316(b) to mean the be st technology available at an economically practicable cost. This appro ach squared with the limited le gislative history of section 316(b) which suggested the BTA was to be based on technology whose costs were economically practicable. In deba te on section 316(b), one legisl ator explained that “[t]he reference here to ‘best technology available’ is intended to be interpreted to mean the best technology available commercially at an economically practicable cost .” 118 Cong. Rec.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 73 of 642 33,762 (1972) (statement of Rep. Clausen) (em phasis added).. EPA stresses that it may therefore consider some of the same factors, even if it is not legally required to consider them in the same way. 2. The Consent Decree 2. Early Litigation History On January 19, 1993, a group of individua ls and environmental organizations 22 filed, under CWA section 505( a)(2), 33 U.S.C. 1365(a )(2), a complaint in Cronin, et. al. v. Reilly , 93 Civ. 314 (LTS)(S.D.N.Y.). The plainti ffs alleged that EPA had failed to perform a nondiscretionary duty to issue re gulations implementing CWA section 316(b), 33 U.S.C. 1326(b). In 1995, EPA and the plaint iffs executed a consent decree in the case. As amended, it provided for EPA to implem ent CWA section 316(b) by prescribed dates in the three separate rule-m aking proceedings. Phase I concerned cooling water intake structures at new facilities, Phase II existing power plants using large volumes of cooling water and Phase III for existing smaller-flow pow er plants and factorie s in at least four industrial sectors (pulp and paper making, petroleum and coal products manufacturing, chemical and allied manufacturing, and pr imary metal manufacturing). EPA promulgated

22 The plaintiffs are the following: Riverkeeper, Inc.; Alex Matthiessen, a/k/a The Hudson Riverkeeper; Maya K. Van Rossum, a/k/a The Delaware Riverkeepe r; Terrance E. Backer, a/k/a The Soundkeeper; John Torgan, a/k/a The Narragansett BayK eeper; Joseph E. Payne, a/k/a Th e Casco BayKeeper; Leo O’Brien, a/k/a the San Francisco BayKeeper; Su e Joerger, a/k/a The Puget Soundkeep er; Steven E. Fleischli, a/k/a The Santa Monica BayKeeper; Andrew Willner, a/k/ a The New York/New Jers ey Baykeeper; The Long Island Soundkeeper Fund, Inc.; The New York Coastal Fishermen’s Asso ciation, Inc.; and The American Littoral Society, Inc.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 74 of 642 the Phase I rule in December, 2001, the Phase II rule in July, 2004 and the Phase III rule in June, 2006. On November 17, 2006, some of the same environmental organizations in the
Cronin case filed a second complaint, amended on January 19, 2007, in Riverkeeper, et al. v. EPA , 06 Civ. 12987 (S.D.N.Y.) asserting that EPA’s Phase III rule failed to discharge EPA’s duty under CWA section 316(b). On August 14, 2008, EPA filed a motion to terminate the Cronin proceeding because it had discharged its obligations (t o take final action) under the decree with respect to the 2004 Phase II a nd 2006 Phase III rulemakings. Subsequently, EPA entered into a settlement with the plaintiffs in bot h lawsuits. Under the settlement agreement, EPA agreed to sign a notice of a propos ed rulemaking implementing CWA section 316(b) at existing facilities no later than March 14, 2011, and to sign a notice taking final action on the proposed rule no later than July 27, 2012. Plaintiffs agreed to seek dismissal of both their suits, subject to a request to reopen the Cronin proceeding if EPA failed to meet the agreed deadlines. The district courts have now entered orders of dismissal. On March 11, 2011, the parties agreed to an am endment to the settle ment agreement to extend the date for proposal to March 28, 2011. On July 17, 2012, the parties agreed to an amendment to the settlement agreement to extend the date for the final rule to June 27,
2013. On June 21, 2013, the parties agreed to extend the date to November 4, 2013, to accommodate completion of formal consultation under the Endangered Species Act. In part due to the government shutdown, on November 12, 2013, the parties agreed to extend the date to January 14, 2014. On Fe bruary 10, 2014, to continue progress on the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 75 of 642 Endangered Species Act (ESA) c onsultation process, the partie s agreed to extend the date to April 17, 2014. Finally, on April 23 2014, in a conference with the court EPA informed the judge that the EPA and the Se rvices would complete the ESA consultation, so that the EPA would sign the rule by May 16, 2014. The court entered an order provisionally reinstating the case if EPA failed to inform the court by May 19, 2014 that it had taken the contemplated action. On May 19, 2014, the Administrator signed this notice for publication in the Federal Register.
3. Prior EPA Actions to Address Coolin g Water Intake Structures a. 1976 Rulemaking In April 1976, EPA promulgated regulations under section 316(b) that addressed cooling water intake structures. 41 FR 17387 (, April 26, 1976 ).. The rule added a new § 401.14 to 40 CFR Chapter I that reiterated th e requirements of CWA section 316(b). It also added a new part 402, which included three sections: (1) § 402.10 (Applicability), (2) § 402.11 (Specialized definitions), a nd (3) § 402.12 (Best technology available for cooling water intake structures). Section 402.10 stated that the provisions of part 402 applied to “cooling water intake structures for point sources for which effluent limitations are established pursuant to se ction 301 or standards of performance are established pursuant to section 306 of the Act.” Sec tion 402.11 defined the terms cooling water intake structure, location, design, constr uction, capacity, and Development Document. Section 402.12 included the following language: “The information contained in the Devel opment Document shall be considered in determining whether the location, design, cons truction, and capacity of a cooling water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 76 of 642 intake structure of a point source subject to standards es tablished under section 301 or 306 reflect the best technology available for minimizing adverse environmental impact.” In 1977, 58 electric utility companies challe nged those regulations, arguing that EPA had failed to comply with the requireme nts of the Administrative Procedure Act in promulgating the rule. Specifically, the uti lities argued that EPA had violated the Administrative Procedure Act in promulga ting regulations mandati ng consideration of the information in the Development Document in establishing 316(b) conditions in individual NPDES permits because EPA had neither published the Development Document in the Federal Register nor properl y incorporated the document into the rule by reference. The U.S. Court of Appeals for the Fourth Circuit agreed. The court determined that the information in the Deve lopment Document was part of the substance of a regulation imposing specific obligati ons in mandatory terms. As such, the information must either be published in the Federal Register in its entirety or to be reasonably available and prope rly incorporated by refere nce under Federal Register requirements. The court explai ned it did not object to site-s pecific implementation of the section 316(b) requirements (“[w]hile we emphasize we do not fault EPA for its point source by point source applica tion”), it did require EPA to “devise a less uncertain method of advising those affected of the conditions by which they are to be bound.” Appalachian Power Co. v. Train, 566 F.2d 451, 457 (4th Cir. 1977). Without reaching the merits of the regulations themselves, the court remanded the rule. EPA later withdrew part 402. (See 44 FR 32956, June 7, 1979.) Section 402.10, however, now codified at § 401.14, remains in effect.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 77 of 642 Following the Fourth Circuit remand of EPA’s section 316(b) regulations in 1977, NPDES permit authorities have made decisi ons implementing CWA section 316(b) and § 401.14 without the direction of a national ru le. EPA published draft guidance addressing section 316(b) implementation in 1977. See Draft Guidance for Evaluating the Adverse Impact of Cooling Water Intake Structures on the Aquatic Environm ent: Section 316(b) Pub. L. 92–500 (U.S. EPA 1977). That draft guidance describes the studies recommended for evaluating the impact of cooling water in take structures on the aquatic environment and recommends a basis for determining the BTA for minimizing adverse environmental impact. The 1977 section 316(b) draft guidan ce states, “[t]he environmental-intake interactions in question are highly site-spe cific and the decision as to best technology available for intake design, location, constr uction, and capacity must be made on a caseby-case basis” (Section 316(b) Draft Guidance, U.S. EPA 1977, p. 4). This site-specific approach was also consistent with the approach described in the 1976 Development Document referenced in the remanded regul ation. (See DCN 1-1056-TC from the Phase I docket.) The 1977 section 316(b) draft gui dance suggested a general process for developing information needed to support se ction 316(b) decisions and presenting that information to the Director. The process i nvolved developing a site -specific study of the environmental effects associated with each facility that uses one or more cooling water intake structures, and consideringconsideration of that study by the Director in determining whether the facility must make any changes for minimizing adverse environmental impact. Under this framew ork, the Director determined whether*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 78 of 642 appropriate studies have been performed, whether a given facility has minimized adverse environmental impact, and what, if any, technologies may be required. b. Phase I – New Facility Rule i. Rulemaking On November 9, 2001, EPA took final acti on on regulations governing cooling water intake structures at new fac ilities. See 66 FR 65255, December 18, 2001. On December 26, 2002, EPA made minor changes to the Phase I regulations. 67 FR 78947. The final Phase I new facility rule (40 CF R 125, Subpart I) establishes requirements applicable to the location, design, construc tion, and capacity of cooling water intake structures at new facilities that have a de sign capacity to withdraw greater than 2 mgd and use at least 25 percent of the water they withdraw solely for cooling purposes on an actual intake flow basis. In the new facility rule, EPA adopted a two-track approac h. Under Track I, for facilities that withdraw equal to or greater than 10 mgd , must were required to meet three requirements. First, the intake flow of the coo ling water intake structure is restricted, at a minimum, to a level commensurate with that wh ich could be attained by use of a closedcycle, recirculating cooling system. Second, th e design through-screen intake velocity is restricted to 0.5 fps (foot per second). Third, th e total quantity of intake is restricted to a proportion of the mean annual flow of a freshwat er river or stream, or to a level necessary to maintain the natural thermal stratification or turnover patterns (where present) of a lake or reservoir except in cases wh ere the disruption is beneficial , or to a percentage of the tidal excursions of a tidal river or estuary. Fu rther, if there are, for example, endangered*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 79 of 642 or threatened species stressed by a facility’s intake structure, a facility that would otherwise meet the applicab le performance requirements may have to select and implement additional design and construction or operational measures to address impingement mortality and entrainment if thes e measures are inadequate to protect the species. Facilities with greater than 2 mgd but less than 10 mg d flows are not required to reduce intake flow to a level commensurate with a closed-cycle, recirculating cooling system, but they must still meet specific operational criteria. Under Track II, a facility hashad the opportunity to demonstrate to the NPDES permitting authority (Director) that the technologies it employs will reduce the level of adverse environmental impact to a comparab le level to what would be achieved by meeting the Track I requirements for restricti ng intake flow and velo city. In making this demonstration, the regulations a llow a facility to rely on a combination of measures in addition to technology controls for reducing impingement and entrainment to achieve results equivalent to the Track I intake flow and velocity requirements. Among these measures, the rule would have allowed restoration of the affected water bodywaterbody through efforts such as restoc king fish and improving the surr ounding habitat to offset the adverse effects that would ot herwise be caused by operating the intake structures. The Second Circuit, in reviewing th e new facility rule, determined that section 316(b) did not authorize the use of restoration measures in complying with the EPA performance standard. (Note that EPA is removing the prov ision related to restoration measures from the CFR in this rulemaking but has included th e above description of the Phase I rule for completeness.) For more information, see sectionSection I above.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 80 of 642 In addition, under the Phase I rule, the Director may establish less stringent alternative requirements for a facility if compliance with the Phase I standards would result in compliance costs wholly out of proportion to those EPA considered in establishing the Phase I requirements or woul d result in significant adverse impacts on local air quality, wa ter resources, or local energy markets. EPA specifically excluded new offshore oi l and gas extraction facilities from the Phase I new facility rule but committed to consider establishing requirements for such facilities in the Phase III ru lemaking. 66 FR 65338, December 18, 2001. ii. Subsequent Litigation Various environmental and industry gr oups challenged the Phase I rule. In February 2004, the Second Circuit sustained th e entire rule except for the restoration provision, ruling that rest oration was not a technology as pr ovided for in section 316(b). With respect to the other provisions of the ru le, the court concluded the Phase I rule was based on a reasonable interpreta tion of the applicable stat ute and sufficiently supported by the record. Restoration pr ovisions of the rule were remanded to EPA for further rulemaking consistent with the court’s decision. Riverkeeper, Inc. v. EPA, 358 F.3d 174, 191 (2nd Cir., 2004). Today’s rule removes the restoration provisions from the Phase I rule. For more details, see Chapter I of this preamble. c. Phase II – Large Flow Existing Power Plants i. Rulemaking On February 16, 2004, EPA took final acti on on regulations governing cooling water intake structures at certain existing power-produci ng facilities. 69 FR 41576, July*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 81 of 642 9, 2004. The final 2004 Phase II rule applied to ex isting facilities that are point sources; that, as their primary activity, both generate and transmit electric power or generate electric power for sale or transmission; that use or propose to use a cooling water intake structure with a total DIF of 50 mgd or more to withdraw water from waters of the United States; and that use at least 25 percent of the withdrawn water exclusively for cooling purposes on an actual intake flow basis. In addition, power producers fitting the description above were also s ubject to the final 2004 Phase II rule even if they obtain their cooling water from one or more inde pendent suppliers of cooling water. Such facilities were subject to the rule if their supplier withdraws water from waters of the United States even if the supplier was not itself a 2004 Phase II existing facility. EPA included this provision to prevent circumve ntion of the 2004 Phase II rule requirements by a facility purchasing cooling water from entities not otherwise subject to section 316(b). The final 2004 Phase II rule and preamble also clarified the definition of an existing power-producing facilit y. The 2004 Phase II rule define d an existing facility as “any facility that commenced construction as described in § 122.29(b)(4) on or before January 17, 2002; and any modification of, or a ddition of a unit at such a facility that does not meet the definition of a new facili ty at § 125.83.” Because the definition of the term existing facility was based in part on the Phase I definition of the term new facility, the preamble to the final 2004 Phase II rule al so clarified and provided some examples of how the definition of existing facility might appl y to certain changes at power-producing facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 82 of 642 Under the 2004 Phase II rule, EPA esta blished BTA performance standards for the reduction of impingement mortality a nd, under certain circumstances, entrainment (see 69 FR 41590-41593, July 9, 2004). The perfor mance standards consisted of ranges of reductions in impingement mortality and, if applicable, entrainment (e.g., reduce impingement mortality by 80 to 95 percent and/or entrainment by 60 to 90 percent) relative to a calculation baseline that reflect ed the level of impi ngement mortality and entrainment that would occur absent specific controls. These performance standards were not based on a single technology but, rather, on consideration of a su ite of technologies that EPA determined were commercially available and economically achievable for the industries affected as a whole (69 FR 41598-41610, July 9, 2004). EPA based the impingement mortality and entrainment perfor mance standards on a suite of technologies because it found no single technology to be e ffective at all affected facilities. For impingement standards, these technologies in cluded the following: (1) fine- and widemesh wedgewire screens, (2) barrier nets, (3) modified screens and fish return systems, (4) fish diversion systems, and (5) fine-mesh traveling screens and fish return systems. With regard to entrainment reduction, thes e technologies include the following: (1) aquatic filter barrier systems, (2) fine-m esh wedgewire screens, and (3) fine-mesh traveling screens with fish re turn systems. Because EPA ba sed the performance standards on a combination of technologies and because of the uncertainty inherent in predicting the efficacy of one or more of these technolog ies as applied to diffe rent facilities, EPA promulgated these standards as ranges. Furthermore, because the site-specific performance was based on a comparison to a once-through system without any specific*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 83 of 642 controls on the shoreline near the source water bodywaterbody (i.e., calculation baseline, for more details see sectionSection III.B.1 of the preamble to the proposed rule, 76 FR 22185, April 20, 2011), the rule also allowed faci lities to receive credit toward meeting the performance standards for impingement and entrainment reduction associated with alternative locations of their intakes (e.g., deep water where fish and shellfish were less abundant). The types of performance standard appli cable to a facility (i.e., reductions in impingement mortality only or both impingeme nt mortality and entrainment) were based on several factors, including the facility’s location (i.e., source water bodywaterbody ), rate of use (capacity utilization rate), and the proportion of the water bodywaterbody withdrawn. The 2004 Phase II rule identified five co mpliance alternatives to meet the performance standards. A facility could demonstrate to the Director one of the following: (1) that it has already reduced its flow comm ensurate with a closed -cycle recirculating system (to meet both impingement mortality and entrainment), or that it has already reduced its maximum through-screen velocity to 0.5 fps or less (to meet the impingement performance standard only); (2) that its c ooling water intake st ructure configuration meets the applicable performance standards; (3) that it has selected design and construction technologies, operational measures , and/or restoration measures that, in combination with any existing design a nd construction techno logies, operational measures, and/or restoration measures, meet the applicable performance standards; (4) that it meets the applicability criteria and has installed a nd is properly operating and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 84 of 642 maintaining a rule-specified and/or appr oved State-specified de sign and construction technology (i.e., submerged cylindrical wedge wire screens) in accordance with § 125.99(a) or an alternative technology that m eets the appropriate performance standards and is approved by the Director in accordance with § 125.99(b); or (5) that its costs of compliance would be significantly greater than either the costs considered by the Administrator for a like facility to meet th e applicable performance standards, or the benefits of meeting the applicable performan ce standards at the facility. Under the costcost comparison alternative, a Director could determine that the cost of compliance for a facility would be significantly greater than the costs considered by EPA in establishing the applicable impingement mortality and en trainment performance standards. Similarly, under the cost-benefit comparison alternative, a Director could determine that the cost of compliance for a facility would be significantl y greater than the benefits of complying with the applicable performance standards. If either of these determinations were made, the Director would have to make a site-s pecific determination of BTA for minimizing adverse environmental impact that came as close as possiblepracticable to meeting the applicable performance standards at a cost that did not significantly exceed either the costs EPA considered in establishing these standards or the site-specific benefits of meeting these standards. The final 2004 Phase II rule also provided that a facility that chooses specified compliance alternatives might request that co mpliance with the requirements of the rule be determined on the basis of implementing a Technology Installation and Operation Plan (TIOP) that would indicate how the facility would install an d ensure the efficacy, to the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 85 of 642 extent practicable, of design and constructi on technologies, and/or operational measures, and/or a Restoration Plan. The rule also established requirements for developing and submitting a TIOP (§ 125.95(b)(4)(ii)) and prov isions that specified how compliance could be determined on the basis of imple menting a TIOP (§ 125.94(d)). Under these provisions, a TIOP could be requested in th e first permit term, and continued use of a TIOP could be requested where a facility wa s in compliance with such plan and/or its Restoration Plan. ii. Subsequent Litigation Industry, environmental stak eholders, and some States 23 challenged many aspects of the 2004 Phase II regulations. On January 25, 2007, the Second Circuit ( Riverkeeper,
Inc. v. EPA , 475 F.3d 83, (2d Cir., 2007)) upheld seve ral provisions of the 2004 Phase II rule and remanded others to EPA for further rulemaking. As noted above, for the 2004 Phase II rule EPA rejecteddid not selectclosedcycle cooling as BTA. Instead, EPA selected a suite of technologies to reflect BTA, including, for example, screens, aquatic filter barriers, and barrier nets. According to the chosen technologies, EPA established nati onal performance standards for reducing impingement mortality and entrainment of fish and fish organisms but did not require the use of any specific technology. Among the aspe cts of the rule the Second Circuit

23 Rhode Island, Connecticut, Delaware, Ma ssachusetts, New Jersey, and New York.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 86 of 642 remanded for further clarificat ion was EPA’s decision to reje ct closed-cycle cooling as BTA and EPA’s determination of performance ranges as BTA. In addition, the Second Circuit found that, consistent with its Phas e I decision, restoration was not authorized under the CWA as a technology for BTA and th at EPA’s cost-benefit site-specific compliance alternative was not in accord with the CWA. There are also several issues for which the court requested addi tional clarification and some instances where the court determined that EPA had failed to provide adequate notice and opportunity to comment on certain provisions of the rule. iii. Suspension As a result of the decision in Riverkeeper, Inc. v. EPA , 475 F.3d 83, (2d Cir., 2007), EPA, on July 9, 2007 (72 FR 37107) su spended the requirements for cooling water intake structures at 2004 Phase II exis ting facilities, pending further rulemaking. Specifically, EPA suspended the provisions in § 122.21(r)(1)(ii) and (r)(5), and part 125 Subpart J, with the exception of § 125.90(b) . EPA explained that suspending the 2004 Phase II requirements was an appropriate re sponse to the Second Circuit’s decision and that such action would allow it to consider how to respond to the remand. In addition, suspending the 2004 Phase II rule was respons ive to the concerns of the regulated community and permitting agencies, both of whom sought guidance regarding how to proceed in light of the approaching dead line for compliance with the remanded rule. EPA’s suspension clarified that pending further rulemaking, permit requirements for cooling water intake structures at 2004 Phase II facilities should be established on a caseby-case, BPJ basis (see § 125.90(b)).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 87 of 642 iv. Supreme Court Decision Following the decision in the Second Ci rcuit, several indus try group litigants petitioned the U.S. Supreme Cour t to hear an appeal regarding several issues in the case. Entergy Corp. v. Riverkeeper, Inc. et al., S. Ct. No. 07-588, et al. On April 14, 2008, the Supreme Court granted the petitions for wr its of certiorari submitted by these 2004 Phase II litigants, but it limited its review to the i ssue of whether section 316(b) authorizes EPA to compare costs with benefits in determining BTA for cooling water intake structures. The Supreme Court held oral arguments in this case on December 2, 2008, and issued a decision on April 1, 2009. As explained above , the Supreme Court held that it is permissible for EPA to rely on cost-benef it analysis in decision making. The court indicated that the phrase “best technology available for minimizing adverse environmental impact” does not unambiguously preclude use of cost-benefit analysis in decision making. 566 U.S. at 223(2009). Th e ruling supports EPA’s discretion to consider costs and benefits, but it impos es no obligation on the Agency to do so. d. Phase III – Existing Power Plants Below 50 mgd, Existing Manufacturing Facilities, and New Offshore Oil and Gas Facilities i. Rulemaking On June 16, 2006, EPA published a final Phase III rule that established categorical regulations for new offshore oil and gas extraction facilities that have a DIF threshold of greater than 2 mgd and that w ithdraw at least 25 percent of the water exclusively for cooling purposes on an actual intake flow basis. The rule establishes requirements that address intake velocity, proportionate flow for sensitive locations,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 88 of 642 design and construction technologies or operational measures, monitoring and recordkeeping, based on if a fac ility employs a sea chest or not, and is fixed or not. Like the Phase I rule, this rule in cludes a Track II. In the Phas e III rule, EPA declined to establish national standards for Phase III exis ting facilities. Instead it concluded that CWA section 316(b) requirements for electric generators with a DIF of less than 50 mgd and all existing manufacturing f acilities would continue to be established on a case-bycase basis under the NPDES permit program using BPJ. (71 FR 35006, June 16, 2006). ii. Subsequent Litigation Following promulgation of the rule, a number of parties filed pe titions for review that were subsequently consolidated for heari ng in the U.S. Court of Appeals for the Fifth Circuit. In 2009, EPA petitioned the Fifth Circuit to remand to the Agency those parts of the rule that applied to existing facilities. Specifically, EPA requested remand of those provisions in the Phase III rule that establish 316(b) requirements at electric generators with a DIF of less than 50 mgd, and the provi sion establishing requirements for existing manufacturing facilities on a case-by-case basis using BPJ. This request did not affect the Phase III rule requirements that establish ca tegorical regulations for new offshore oil and gas extraction facilities that have a DIF th reshold of greater th an 2 mgd and that withdraw at least 25 percent of the water exclusively for cooling purposes on an actual intake flow basis. On July 23, 2010, the U.S. Court of Appeals for the Fifth Circuit issued a decision affirming the parts of Phase III rule relati ng to new offshore oil and gas facilities. The court granted EPA’s motion to remand the rule with respect to existing facilities. In*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 89 of 642 sustaining the requirements for new offshore oil and gas facilities, the Fifth Circuit upheld EPA’s decision not to use cost benef it balancing in determining the requirements for these new facilities.

III. Environmental Effects Associated with Cooling Water Intake Structures A. Introduction Multiple types of adverse environmental effects may be associated with CWIS operations at regulated facilities. Many facilities employ onc e-through cooling water systems that impinge fishes and other aqua tic organisms on intake screens. Impinged organisms may be killed, injured , or weakened. In addition, early life stage fish or planktonic organisms can be entrained by th e CWIS and subjected to high velocity and pressure, increased temperature, and chemi cal anti-biofouling agents in the system. These factors are highly lethal in most cases, as ear ly life stages of larvae are highly sensitive and very unlikely to survive entrainment. Even if an organism is entrained as an egg and survives, its chances of surviving beyond th e larvae stage are dram atically lower than eggs that were never entrained. Thus, unless measures to protect larvae are in place, egg survival does not indicate that adverse e nvironmental impacts have been avoided. Consistent with its treatment of entrainment in past 316(b) rules, EPA assumes for the purposes of a national rule that 100 percent of entrained organisms suffer mortality. The effects of CWIS on aquatic habitats and biota in the waterbody do not occur in isolation from other ongoing physical, chemical, and biological stressors. Anthropogenic stressors may include: degraded water and sediment quality, low*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 90 of 642 dissolved oxygen (DO) levels, eutrophicati on, fishing, channel or shoreline (habitat) modification (intake structur e and other flood or storm c ontrols), hydrologic regime changes and invasive species. For example, many aquatic organisms subject to IM&E (impingement mortality and entrainment) re side in impaired (i.e., CWA 303(d) listed) waterbodies. The effects of anthropogenic stressors on biota may contribute to or compound the impact of IM&E, depending on the influence of location-specific factors. In addition to stressors acting on biota near a single CWIS, multiple CWISs and facilities located in close proximity on the same waterbody may have additive or cumulative effects on aquatic communities. And, although it is difficult to measure, the compensatory ability of an aquatic populati on, which is the capacity for a species to increase survival, growth, or reproduction rates in response to decreased population, is likely compromised by IM&E and the cumula tive impact of other stressors in the environment over extended periods of time. B. Major Anthropogenic Stressors in Aquatic Ecosystems All ecosystems and their biota are subject to natural variability in environmental conditions (e.g., seasonal cycles, foliage pres ence) as well as periodic large-scale disturbances (e.g., drought, flood, fire). In co ntrast, anthropogenic stressors tend to be more chronic in nature and can often lead to long-term enviro nmental degradation associated with decreased biodiversity, re duced primary and secondary production, and a lowered ecosystem resiliency (i.e., ability of th e ecosystem to recover to its original state*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 91 of 642 from perturbations). 24

. Several of the more important anthropogenic stressors are discussed below, with CWIS-related impacts c onsidered as a separate category of stress. 1. Habitat Loss Structural aquatic habitat is generall y recognized as the most significant determinant of the nature and composition of aquatic communities. Most 316(b) facilities have been built on shoreline locations where power-genera tionindustrial buildings, roadways, canals, impoundments, and other wa ter storage or conveya nce structures have been constructed at the cost of terrestrial, aquatic, and wetland habitats. The main impacts of aquatic habitat loss are a reduction in the number of fish in the environment, a concentration of fishery spawning and nursery areas in fewer locations, shifts in species dominance based on available ha bitat and local extirpation of historical fish species. Habitat loss in shoreline areas exacerbates th e effect of CWIS lo sses because many fish species affected by IM&E rely heavily on coastal wetlands as nursery areas. 2. Water Quality and Impaired Waters Poor water quality is a major stressor of aquatic biota and habitats. Degraded surface water and sediment contaminants re flect both current and past industrial, agricultural and urban land use and disposal practices. Poor water quality can limit the numbers, composition, and distribution of fish and invertebrates; reduce spawning effort

24 Rapport, D. J., & Whitford, W. G. (1999). How Ecosystems Respond to Stress. [Article]. BioScience, 49(3), 193-203. See DCN 10-4871.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 92 of 642 and growth rates; select for pollution-tolerant species; cause periodic fi shkills; or result in adverse bioaccumulative effect s to piscivorous wildlife. EPA has determined that the majority of surveyed facilities, including 71 percent of electric generators and 79 percent of samp led manufacturing facilities, are within two miles of an impaired (i.e., CWA Sectionsection 303(d)-listed) waterbody. 25 These impairments are caused by a vari ety of chemical, physical, an d biological factors. These factors include biological stressors, nutrients, organic enrichment/loading, bioaccumulation, toxics, unknown causes, and ot her forms of anthropogenic sources of pollution (e.g., atmospheric de position of mercury leading to fish advisories). The combined impacts of impaired water quality may result in highly degraded or altered aquatic communities that are further impaired by IM&E associated with the operation of regulated facilities. 3. Overharvesting Overharvesting is a general term desc ribing the exploitation of an aquatic population beyond a level that is sustainable, sometimes to the point of significantly reducing the population relative to historic levels. Given th at many fisheries regulated by the National Marine Fisheries Service (NM FS) are overfished on a continual basis, overharvesting is a particular problem for stocks also subject to IM&E.

25 Abt Associates, Inc. (2010). Source Water Body Comparisons (Under Work Assignment 2-09, Task 4) (pp. 13). Cambridge, MA. See DCN 10-4504.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 93 of 642 4. Invasive Species Non-indigenous invasive species (NIS) are a significant and increasingly prevalent stressor in both freshwater and marine environments. Approximately 300 NIS have become established in marine and estuar ine habitats of the continental U.S., and the number of NIS continues to increase. Ma ny NIS are nuisance species with undesirable effects on local communities. 26 For example, interactions between NIS and other anthropogenic stressors can affect the coloni zation and distribution of native species subject to CWIS impacts. C. Effects of CWIS on Aquatic Ecosystems Multiple types of adverse environmental effects may be associated with CWIS operations at complying facilities. Many facilities employ once-through cooling water systems that impinge fishes and other aqua tic organisms on intake screens. Impinged organisms may be killed, injured or weakened. In addition, early life stage fish or planktonic organisms can be entrained by th e CWIS and subjected to high velocity and pressure, increased temperature, and chemi cal anti-biofouling agents in the system. These factors are highly lethal in mo st cases. Early life stages of larvae are highly sensitive and very unlikely to survive entrainment. Even if an organism is entrained as an egg and survives, its chances of surviving entrainmen t in the larvae stage are dramatically lower.

26 Ruiz, G. M., Fofonoff, P. W., Carlton, J. T., Wonham , M. J., & Hines, A. H. (2000). Invasion of Coastal Marine Communities in North America: Apparent Patterns, Processes, and Biases. [Article]. Annual Review of Ecology & Systematics, 31, 481-531. See DCN 10-4880.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 94 of 642 Thus, unless measures to protec t larvae are in place, egg surv ival does not i ndicate that adverse environmental impacts have been avoided. EPA assumes for the purposes of a national rule that 100 pe rcent of entrained organisms suffer mortality. The magnitude and regional importance of IM&E is a function of operational CWIS intake volumes and characteristics of the aquatic community in the region. Thus, for example, IM&E can contribute to impacts on T&Ethreatened and endangered (T&E) species and reduce populations of ecologically critical aqua tic organisms, including important organisms in an ecosystem’s f ood web. In addition, IM&E may diminish the compensatory reserves of populations’populations and reduce indigenous species populations, commercial fisheries, and recreational fisheries. Further, IM&E may stress overall communities and ecosystems, as evidenced by reductions in diversity or other changes in ecosystem structure or function. Th e direct and indirect impacts of CWIS may reduce other valuable ecosystem goods and services, including nutrient cycling and ecosystem stability. 1. Losses of Fish from Impingement Mortality and Entrainment The most visible direct impacts of IM&E are the losses of large numbers of aquatic organisms, distributed non-unifor mly among fish, benthic invertebrates, phytoplankton, zooplankton, and other susceptibl e aquatic taxa (e.g., sea turtles). These losses have immediate and direct effects on the population si ze and age distribution of affected species, and may cascade through food webs. In some cases, IM&E has been shown to be a significant source of anthropogenic mortality of depleted stocks of commer cially targeted species. For example,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 95 of 642 approximately 105.4 percent of the average annual recruitment toestimated A1E population of the Southern New England/Massac husetts stock of winter flounder ( Pseudopleuronectes americanus ) is lost to IM&E. 27 In addition to its effect on stocks of marine commercial fish species, IM&E in creases the pressure on native freshwater species, such as lake whitefish ( Coregonus clupeaformi ) and yellow perch ( Perca flavescens ), whose populations have seen dramatic declines in recent years. 28 IM&E is also likely to contribute to re duced population sizes of species targeted by commercial and recreational fish ers, particularly for stocks that are being harvested at unsustainable levels and/or undergoing rebui lding. Thus, reducing IM&E may lead to more rapid stock recovery, a long-term incr ease in commercial fish catches, increased population stability following periods of poor recruitment and, as a consequence of increased resource utilization, an increased ab ility to minimize the invasion of exotic species. 29

27 Terceiro, M. (2008). Southern New Engl and/Mid-Atlantic wi nter flounder. In Northeast Fisheries Science Center ( Ed.), Assessment of 19 NEFSC) of the NOAA National Marine Fisheries Service. (2011). 52nd Northeast Groundfish Stock through 2007: Report of the 3rd Groundfish Regional Stock Assessment Workshop (52nd SAW): Assessment Review Meeting (GARM III) (pp. 2.457-452.528). Woods Hole, MA: Northeast Fisheries Science Center, U.S. Department of Commerce Summary Report. DCN 12-4940

. 28 U.S. Department of the Interior (USDOI). (2004). Fisheries: Aquatic and Endangered Resources from http://www.glsc.usgs.gov/main.php ?content=research_risk&title=Speci es%20at%20Risk0&menu=research [Retrieved June 23, 2004]; Wisconsin Department of Natural Resources (Wisconsin DNR). (2003). Adrift on the sea of life. Wisconsin Natural Resources, June, 17-21. See DCN 10-4914. 29 Stachowicz, J. J., & Byrnes, J. E. (2006). Sp ecies Diversity, invasion success, and ecosystem functioning: disentangling the influence of resource co mpetition, facilitation, and ex trinsic factors. Marine Ecology - Progress Series, 311, 251-262. See DCN 10-4892.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 96 of 642 2. IM&E Effects on Threaten ed and Endangered Species Populations of T&E (threatened and e ndangered) species may suffer increased mortality as direct or indirect consequences of IM&E . T&E species are vulnerable to future extinction or at risk of extinction in the near future and IM&E losses could either lengthen population recovery time, hasten the demise of these species, or counteract the effects of other conservation efforts. For this reason, the populati on-level and societal values of T&E losses are likely to be considered more important than the absolute number of losses that occur. Due to low population sizes, I&E mo rtality from CWISs may represent a substantial portion of the annual reproduction of T&E species. 3. Thermal Effects One byproduct of once-through cooling water systems is a discharge of a heated effluent. Concerns about the impacts of h eated effluents are addressed by state water quality standards addressing temperature ., rather than a national rule. Se ction 316(a) of the Clean Water Act provides a mechanism for variances from controls that could be imposed due to thermal effects. Based on a limited review of NPDES permits , to the extent that facilities have c ontrols on cooling water intake structures, these controls have been required to meet water qualit y standards related to temperature. 30

30 Abt Associates, Inc. (2010). Source Water Body Comparisons (Under Work Assignment 2-09, Task 4) (pp. 13). Cambridge, MA. See DCN 10-4504.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 97 of 642 Thermal pollution has long been recognized as having multiple effects upon the structure and function of ecosystems. 31 Numerous studies have shown that thermal discharges may substantially alter the stru cture of the aquatic community by modifying photosynthetic, metabolic, and growth rates 32 and reducing levels of DO. Thermal pollution may also alter the location and tim ing of fish behaviors including spawning, aggregation, and migration, and may result in thermal shock-induced mortality for some species. 33 Adverse temperature effects are like ly to be more pronounced in aquatic ecosystems that are already subject to ot her environmental stressors such as high biochemical oxygen demand (BOD) levels, se diment contamination, and pathogens. Reduced waterbody volume due to the effects of climate change a nd/or lengthy droughts could exacerbate these effects. 4. Chemical Effects The release of chemicals in the discha rge of once-through cooling waters is another environmental effect associated with power plantindust rial facility operations. These chemicals include metals from internal corrosion of pipes, valves and pumps (e.g., chromium, copper, iron, nickel, and zinc), additives (anti-corros ion and anti-scaling

31 Abt Associates, Inc. (2009). Summary of Ecological Effects of Thermal Discharge (pp. 28). Cambridge, MA. See DCN 10-4505. 32 Martinez-Arroyo, A., Abundes, S., González, M. E., & Rosas, I. (2000). On the Influence of Hot-Water Discharges on Phytoplankton Communities from a Coastal Zone of the Gulf of Mexico. Water, Air & Soil Pollution, 119(1-4), 209-230 . See DCN 10-4820. 33 Smythe, A. G., & Sawyko, P. M. (2000). Field and laboratory evaluations of the effects of 'cold shock' on fish resident in and around a thermal discharge: an overview. Environmental Science & Policy, 3(S1), 225- 232. See DCN 10-4887.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 98 of 642 agents) and their byproducts, and materials fr om boiler blowdown and cleaning cycles. In addition to these pollutants, facilities al so discharge anti-fouling biocide agents. A review of the effects of chemical treat ment and discharge into the environment suggests that direct ecotoxicity in discharg e plumes is rarely observed beyond the point of discharge or in a mixing zone near the pipe outlet. 34 However, the presence of these chemicals in the receiving water may be addi tive to low-level chronic adverse effects from other anthropogenic st ressors identified above. 5. Effects of Flow Alteration The operation of CWISs and discharge return s significantly alter patterns of flow within receiving waters both in the immediat e area of the CWIS intake and discharge pipe, and in mainstream waterbodies, partic ularly in inland riverine settings. In ecosystems with strongly delineated boundaries (i .e., rivers, lakes, enclosed bays, etc.), CWISs may withdraw and subse quently return a substantial proportion of water available to the ecosystem. Even in situations when the volume of water downstream of complyingregulated facilities changes relatively litt le, the flow characteristics of the waterbody, including turbulence and water velo city, may be significantly altered. Altered flow velocities and turbulence may lead to several changes in the physical environment. These changes can include sedi ment deposition, sediment transport, and

34 Taylor, C. J. L. (2006). The effects of biological fo uling control at coastal and estuarine power stations. Marine Pollution Bulletin, 53(1-4), 30-48 . See DCN 10-4901.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 99 of 642 turbidity, each of which plays a role in the physical struct uring of ecosystems. 35 Flow velocity and turbulence are controlling biologi cal factors in aquatic ecosystem health, and have been shown to alter feeding rates, set tlement and recruitment, bioturbation, growth and population dynamics. 36 Climate change is predicted to have va riable effects on future river flow in different regions of the United St ates. Some rivers are expected to have large increases in flood flows while other basins will experience stress from low water levels. Thus, the adverse effects of flow alteration may increase or decrease over l onger periods for larger rivers, depending on their location. D. Community–level or Indirect Effects of CWIS In addition to the direct effects of CW ISs, IM&E may alter a wide range of aquatic ecosystem functions and services at the community level. Many of these effects on aquatic community function and service ar e poorly characterized, given the limited scope of IM&E studies and an incomplete knowledge of baseline or pre-operational conditions within affected waters. The operation of CWISs by generating facilities can lead to localized areas of depressed fish and shellfish abundance. Power plantsIndustrial facilities (and the intake volume they represent) are located in a non-uniform manner along coastlines and rivers.

35 , Hoyal, , D. C. J. D., Atkinson, J. F., Depinto, J. V., & Taylor, S. W. (1995). The effect of turbulence on sediment deposition. Journal of Hydraulic Research, 33(3), 349-360 . See DCN 10-4797. 36 Sanford, E. B., Bertness, D., & M. D. Gaines, S. D. (1994). Flow, food supply and acorn barnacle population dynamics. Marine Ecology Progress Series, 104, 49-62. See DCN 10-4882.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 100 of 642 They may be clustered, such that the populat ions affected by IM&E are geographically heterogeneous. This can result in a highly localized and patchy distribution of aquatic organisms in regional areas. IM&E may directly reduce species populations through the death of individual organisms, or may indirectly affect species populations by altering established predatorprey relationships and there by disrupting ecological niches and food webs. For example, the loss of young-of-year predator s, such as striped bass, or loss of important forage fish, such as menhaden and bay anchovy, may affect trophic relationships and alter food webs. IM&E may lead to reductions in local comm unity biodiversity or in a loss of genetic diversity in individual fish populations. Because IM&E repres ents a selective pressure on early life stages, it may reduce the genetic di versity of resident fish and prevent the recovery of depleted stocks. 37 Also, because many stocks are differentiated by oceanic region and/or timing of migratory movements, IM&E could alter the seasonal migration and life cycle events of fish populations, wh ich could have ramifications for predator species. IM&E may also alter the pace of nutri ent cycling and energy transfer through food webs. Fish species have been shown to have substantial effects on nitrogen,

37 Swain, D. P., Sinclair, A. F., & Mark Hanson, J. ( 2007). Evolutionary response to size-selective mortality in an exploited fish population. Proceedings of the Royal Society B: Biological Sciences, 274(1613), 1015- 1022 . See DCN 10-4900.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 101 of 642 phosphorous, and carbon cycling due to storage and translocation effects. 38 These alterations in nutrient cycling could lead to redirection of nutrient flows to other components of the ecosystem including wate r column phytoplankton, benthic macroalgae and attached epiphytes, with subsequent cha nges to the condition of critical ecosystem habitats, such as submerged aquatic vegetation. The effect of long-term or chronic IM&E may lead to a decrease in ecosystem resistance and resilience 39 (i.e., ability to resist and rec over from disturbance, including invasive species). That is, IM&E is likely to reduce the abil ity of ecosystems to withstand and recover from adverse environmental impactsthese ecosystem damages , whether those impacts are due to anthropogenic e ffects or natural variability. E. Cumulative Effects of Multiple Facilities Cumulative effects of CWISs are likely to occur if multiple facilities are located in close proximity and impinge or entrain aquatic organisms within the same source waterbody, watershed system, or along a migrat ory pathway of a specific species (e.g., striped bass in the Hudson River). EPA analyses suggest that approximately 20 percentEPA analyses show more than 20 percent of all facilities on inland waters

38 Vanni, M. J., Layne, C. D., & Arnott, S. E. (1997). "Top-down" trophic interactions in lakes: effects of fish on nutrient dynamics. Ecology, 78(1), 1-20. See DCN 12-5047. 39 Folke, C., Carpenter, S., Walker, B., Scheffer, M. , Elmqvist, T., Gunderson, L ., & Holling, C. S. (2004). Regime Shifts, Resilience, and Biodiversity in Ec osystem Management... Annual Review of Ecology, Evolution, & Systematics, 35(1), 557-581. See DCN 10-4770.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 102 of 642 withdraw more than 5 percent of the mean annual flow. 40 See TDD Chapter 4.1.3 for detailed discussion. This impact is compounded because more than half of all regulated facilities are located on wate rbodies with multiple CWIS s. An inspection of the geographic locations of complyingregulated facilities (approximated by CWIS latitude and longitude) shows that that facilities in inland settings are more likely to be located in close proximity to other facil ities (upstream or downstream) th an are facilities in marine and estuarine environments. The cumulative impact of clustere d facilities may be significant, due to the concentr ated IM&E, combined intake flows, and the potential for other impacts such as thermal discharges.

IV. Summary Description of the Final Rule Under today’s final rule, the owners or operators of existing facilities and new units at existing facilities are subject to BTA standards for impingement mortality and entrainment . that are expected to substantially reduce the adverse environmental impacts of cooling water intake structures. Earlier, in Section I, the preamble describes what facilities are subject to the rule. The disc ussion below presents an overview of the substantive requirements of the rule.

40 As described in the Phase I proposed rule (65 FR 49060) and the Phase II NODA (66 FR 28853), absent any other controls, withdrawal of a unit volume of water from a waterbody will result in the entrainment of an equivalent unit of aquatic life (such as eggs and larval organisms) suspended in that volume of the water column. Thus, facilities withdrawing gr eater than 5 percent of the mean annual flow from freshwater rivers and streams may entrain equal proportions of aquatic organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 103 of 642 A. BTA Standard for Impingement Mortality for Existing Units at Existing Facilities The final rule requires that existing facilities and new units subject to this rule must comply with one of the following seven alternatives identified in the national BTA standard for impingement mortality at § 125.94(c) (hereafter, impingement mortality standards): (1) operate a closed-cycle recircula ting system as defined at § 125.92; (2) operate a cooling water intake stru cture that has a maximum through-screen design intake velocity of 0.5 fps; (3) operate a cooling water intake stru cture that has a maximum through-screen intake velocity of 0.5 fps; (4) operate an offshore velocity cap as de fined at § 125.92 that is installed before [ insertINSERT effective date of rule] ; (5) operate a modified traveling screen 41 that the Director determines meets the definition at § 125.92 (s) and that the Director determines is the best technology available for impingement reduction;

41 EPA is aware that innovative screen designs are cu rrently being tested that are expected to provide similar or better performance than modified Ristroph traveling screems. Therefore EPA has defined modified traveling screen at 40 CFR 125.92 to mean any traveling water screen that incorporates the specified measures that are protectiv e of fish and shellfish. In this preamble, modified traveling water screen with a fish handling and return system is often referred to more simply a modified traveling screen.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 104 of 642 (6) operate any other combination of technologies, management practices and operational measures that the Director dete rmines is the best technology available for impingement reduction; or (7) achieve the specified impingement mortality performance standard. Options (1) , (2) and (4) above are esse ntially pre-approved technologies requiring no demonstration or only a minimal demonstr ation that the flow reduction and control measures are functioning as EPA envisione d. Options (3), (5) and (6) require more detailed information be submitted to the Direct or before the Director may specify it as the requirement to control impingement mortality. In the case of Option (3), which EPA considers to be a streamlined alternative, the facility must submit information to the Di rector that demonstrat es that the maximum intake velocity as water passe s through the structural com ponents of a screen measured perpendicular to the screen mesh do es not exceed 0.5 feet per second. In the case of Option (5), the facility must submit a site-specific impingement technology performance optimization study that must include two years of biological sampling demonstrating that the operation of the modified traveling screens has been optimized to minimize impingement mortality. As discussed below, if the facility does not already have this technology installed and chooses this option, the Director may postpone this study till the screen s are installed (see VI.G.1.d below). In the case of Option (6), the facility must submit a site-specific impingement study including two years of biological monitoringdata collection demonstrating that the operation of the system of technologies, ope rational measures and best management*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 105 of 642 practices has been optimized to minimize im pingement mortality. If this demonstration relies in part on a credit for reductions in the rate of impingement already achieved by measures taken at the facility, an estimate of those reductions and any relevant supporting documentation must be submitted. The estimated reductions in rate of impingement must be based on a comparison of the system to a once-through cooling system with a traveling screen whose point of withdrawal fr om the surface water sour ce is located at the shoreline of the source waterbody. The impingement mortality performance st andard in (7) requires that a facility must achieve an annuala 12-month impingement mortality perf ormance of all life stages of fish and shellfish of no more than 2524 percent mortality, including latent mortality, for all non-fragile species that are collected or retained in a sieve with maximum opening dimension of 0.56 inches 42 and kept for a holding period of 18 to 96 hours. The Director may, however, prescribe an alternative holding period. The annual12-month average of impingement mortality is calculated as the sum of total impingement mortality for the previous 12 months divided by the sum of to tal impingement for the previous 12 months. A facility must choose to demonstrate complia nce with this requirement for the entire facility, or for each individual cooling water intake structure. Biological monitoring must be completed at a minimum frequency of monthly.

42 Though less common, the EPA recognizes that 1⁄2 by 1⁄4 inch mesh are used in some instances and perform comparably to the 3/8 inch square mesh. Ther efore, today’s rule allows for facilities to apply a 1⁄2 by 1⁄4 inch sieve (diagonal opening of 0.56 inches) or a 3/8 inch sieve (diagonal opening of 0.53 inches) when discerning between impinged and entrained organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 106 of 642 The owner or operator of an existing facility must meet the impingement mortality requirements as soon as possiblepracticable after issuance of a final permit establishing the entrainment requirements under § 125.94(d). The owner or operator of a new unit at an existing facility must comply with the impingement mortality standard upon commencement of the new unit’s operation. Today’s final rule also allows the Direct or, based on review of site-specific data and where no threatened or e ndangered species may be present , to conclude that a de minimusminimis rate of impingement exists and therefore no additional controls are warranted to meet the BTA impingement mort ality standard. In addition, today’s final rule allows the directorDirector flexibility in determining appropriate site-specific controls that may be less st ringent than those found at § 125.94(c)(1) to (7) for existing units at existing facilities that are used only in limited circumstances for emergency purposes. This provision can be found at § 125.94(c)(13) and the definition of “emergency purposes” can be found in the “Special Definitions” section at § 125.92.operating with a capacity ut ilization of less than 8 percent averaged over a 24- month block contiguous peri od. This provision can be found at § 125.94(c)(12). EPA notes that these provisions for impingement mortality would not a pply to entrainment because, as discussed in the next section, the requirements for entrainment are established by the Director on a site-specific basis. B. BTA Standard for Entrainment for Existing Units at Existing Facilities The final rule establishes the national BTA standard for entrainment at existing units at existing facilities at § 125.94(d) (hereaf ter, entrainment standards ) for both*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 107 of 642 existing units and new units at existing fac ilities. In the case of existing). For such units, the rule does not prescribe a single nationally applicable entrainment reduction technologyperformance standard but instead requires that th e Director must establish the BTA entrainment requirement for a facility on a site-specific basis. The requirements must reflect the Director’s determinati on of the maximum reduction in entrainment warranted after consideration of all factors relevant to the BTA determination at the site and must include consideration of the specific factors spelled out in § 125.98(f )(2 ). Facilities that withdraw greater than 125 mgd AIF mu st develop and submit an Entrainment Characterization Study (§ 122.21(r)(9 ),)), as well as provide other information required at § 122.21(r)(7) and (10), ( 11), ( 12 ),) and (13) and, unless waived by the director, (11)) that must include specified data pe rtinent to consideration of several of the factors identified in § 125.98(f). C. BTA Standards for Impingement Mort ality and Entrainment for New Units at Existing Facilities The owner or operator of a new unit at an existing facility must achieve one of

two compliance alternatives under the national BTA standards for impingement mortality and entrainment for new units at existi ng facilities at § 125.94(e) (hereafter,

new units entrainment unit standards). 43 Under the first alternative new unit entrainment

43 New units are also subject to impingement requirements at § 125.94(b) but EPA expects that all new units will comply with these requirements through the installation of a closed-cycle cooling system, which is one of the compliantmost effective technologies identified in the final rule for reducing impingement and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 108 of 642 standardstandards , the owner or operator of a facility must reduce AIF at the new unit, at a minimum, to a level commensurate with th at which can be attained by the use of a closed-cycle recirculating system . as defined at § 125.92(c)(1). The owner or operator of a facility with a cooling wate r intake structure th at supplies cooling water exclusively for operation of a wet or dry cooling tower(s) and that meets the definition of closed-cycle recirculating system at § 125.92 (c)(1) meets this new units entrainmentunit standard. Under the second alternative new units entrainmentunit standard, the owner or operator of a facility must demonstrate to the Direct or that it has installed, and will operate and maintain, technological or other control measures for eachthat reduce the level of adverse environmental impact from any cooling water intake atstructure used to supply cooling

water to the new unit that achievesto a prescribed reduction in en trainment mortality of all stages of fish and shellfishcomparable level to that passwhich would be achieved through a sieveflow reductions commensurate with a maximum opening dimension of 0.56 inches. Like the Track II requirement in th e earlier Phase I rulethe use of a closedcycle recirculating system . Under this alternative , the owner or operator of a facility must demonstrate entrainment mortalit y reductions that are equivale nt to 90 percent or greater of the reduction that could be achieved th rough compliance with the first alternative entrainment standard for new units.

impingement mortality. Therefore, the IM requirements for new un its are already addressed by the new unit requirements by virtue of the first compliance alternative of the IM performance standard.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 109 of 642 The new unitsunit entrainment standards do not apply to certain water withdrawals , including (1) process water, gray water, wast e water, reclaimed water, or other waters reused as cooling water in lieu of water obtained by marine, estuarine, or freshwater intakes; (2) cooling water used by manufacturi ng facilities for contact cooling purposes; ( 32 ) portions of those water withdrawals for auxiliary plant cooling uses totaling less than 2 mgd; ( 43 ) any volume of cooling water withdrawals used exclusively for make-up water at existing clos ed-cycle recirculating systems; 44 and ( 54 ) any quantity of emergency back-up water flows. Furthermore, as is the case for existing units, obtaining cooling water from a public wate r system, using reclaimed water from wastewater treatment plants, or desalination plants, or using recycled process wastewater effluent as cooling water does not constitute use of a cooling water intake structure. The new unit requirements apply only to the volume of cooling water used by the new unit, or to the cooling water intake structures used by the new unit. The new unit requirements do not apply to the rest of the existing facility. In addition, the Director may establish alternative entrainment requirements for new units when compliance with either of the two alternative new unitsunit entrainment standards would result in compliance costs w holly out of proporti on to the costs EPA considered in establishing the requirements at issue or will result in significant adverse

44 For facilities with a combination of closed-cycle r ecirculating systems and othe r cooling water systems, the entrainment mortality standard does not apply to that portion of cooling water withdrawn as make-up water for the closed-cycle recirculating system*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 110 of 642 impacts on local air quality, significant a dverse impacts on local wa ter resources other than impingement or entrainment, adverse impacts on threatened and endangered species, or significant adverse impacts on local en ergy markets. Any Director-specified alternative must achieve a level of perf ormance as close as practicable to the requirements of § 125.94(e)(1) or (2). CD . Other Provisions The final rule contains a number of other provisions re lated to the BTA impingement and entrainment reduction requirements. For example, the rule also provides that the Director may establish mo re stringent requirements as BTA if the Director determines that the facility owner or operator’s compliance with the requirements otherwise established under the fi nal rule would not meet the requirements of applicable State and Tribal law, or other Federal law such as the Endangered Species Act.including water quality standards. 40 CFR § 125.94(i). Today’s rule also requires the owner or operator of a fac ility subject to this subpart to submit and retain permit application and supporting information as sp ecified in § 125.95; monitor for compliance as specified in § 125.96; and report information and data and keep reco rds as specified in § 125.97. Director requirements are specified in § 125.98. The rule further provides that, in the case of a nuclear facility or a facility constructing or conducting maintenance on nuclear powered vessels of the Armed Services , if the owner or operator of the facility demonstrat es to the Director, upon the Director’s consultation with th e Nuclear Regulatory Commission, the Department of Energy or the Naval Nuclear Propulsion Program, that compliance with this subpart*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 111 of 642 would result in a conflict with a safety requirement established by the commissionthese entities , the Director must establis h BTA requirements that woul d not result in a conflict with the Commission’s , the Department’s or the Na val Nuclear Propulsion Program’s safety requirement. V. Summary of Most SignificantData Updates and Revisions to the Proposed
Rule This description of revisions to the propos ed rule is organized in three sections: data updates, regulatory approach and co mpliance, and new units. EPA published two NODAs ( noticeNotice of data availabilityData Availability ) (77 FR 34315, June 11,
20112012 and 77 FR 34927, June 12, 2012) based on some comments received on the proposed rule and additional analyses. EPA also took public comment on the information in these notices. A. Data Updates On the basis of comments received, additional information made available, and further analyses, EPA revised a number of a ssumptions used in its assessments for the final rule. These included revisions to the e ngineering costs of options considered in development of the final rule, the informa tion collection costs, the economic analyses, and the benefits analyses. The revised analys es, along with an explanation of how they affected decision making for this final rule, are discussed below. 1. Impingement Data and Performance Standard Since publishing the proposal, EPA receive d a substantial number of comments regardingstating the limited amount of data used to develop the proposed impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 112 of 642 mortality performance standard was too limited . EPA received more than 80 additional documents containing impingement and entrai nment data. EPA reviewed these materials and , as a result, identified more than 40 distin ct sets of additional impingement sampling and performance data. Many found that many documents did not provide useful data. For example, in some cases, a document did not provide useful information because the only data available were the facility name and raw sampling data for a number of different species of fish or shellfish, or both. In ot her cases, the documents focused on source water characterization data alone. However, after review, EPA identified more than 40 distinct sets of additional impinge ment sampling and performance data. EPA also reevaluated and revi sed the criteria it used in developing the standard for the proposal for including impingement mortality study data in the impingement mortality performance standard calculations. In calculating the impingement mortality performance standard of § 125.94(c)(7), EPA a pplied these revised cr iteria for acceptable data to both the new data and the earlier data used in developing the standard atfor proposal. EPA’s approach for the final rule is similar to that of the proposal. In order to include data in EPA’s calculation, for th e proposal, EPA applied the following four criteria. First, the data must be specific to the technology under consideration. Second, impingement mortality must have been reported as an absolute number or a percentage of impinged fish that were killed. Third, the da ta must reflect that the installed technology was operated under conditions that are represen tative of actual conditions at a facility, and fourth, the reported values must be actual measurements. EPA based the proposed*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 113 of 642 performance standard on the performance of modified traveling screens with a fish return system using a limited definition of the control technology. In its reevaluation and based on comments , EPA decided to revise some of the criteria and add two new ones. In some cases, the effect of these ch anges is to relax the criteria and in others, to impose more restric tive criteria. First, all impingement data must be for non-fragile species (including shellfish). Second, the data must be representative of annual mortality data for purposes of deri ving an annual performance standard. EPA notes that in contrast to the proposed ru le, the permit application does not require submission of the proposed list of “species of concern.” EPA found that the term “species of concern” was similar to terms used in th e context of T&E (threatened and endangered) species, and may further cause confusion over existing Services or State requirements for such species. Further, despite EPA’s efforts to distinguish between species of concern and RIS (representative indicator specie s) in the NODA (77 FR 34325, June 11, 2012), EPA found that many commenters were still confused by the language. Instead, EPA is adopting the term “fragile species” and using the term exactly as it is used with the impingement mortality data and criteria used in calculating the impingement mortality performance standard of the rule. EPA incl uded a definition for “fragile species” at § 125.92 ,(m), as a species of fish or shellfish that has an impinge ment survival rate of less than 30 percent. EPA took this approach to ensure that a facility’s performance in reducing impingement mortal ity as demonstrated by collecting biological monitoringdata would reflect only the effects of its improve ments to the CWIS technology, and not be confounded by effects of monitoringdata collection that are not caused by impingement.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 114 of 642 EPA also relaxed the holding time criteria as a result of reeval uating the range of acceptable impingement mortality holding times, which at proposal was limited to 24 to 48 hours. After evaluating the data, EPA conclude d that a range of holding times of 18 to 96 hours was acceptable for inclusion in the development of a performance standard because commenters had provided documentati on showing that the actual time period typically had little e ffect on IM rates. In contrast to the At proposal, EPA counted all fish that died at any time during the holding period , instead of excluding. For the final rule being promulgated today, EPA excludes those that were dead at time zero because such counts measured immediate deaths and not thos e organisms that were mortally harmed as a result of impingement. These counts also mi ght reflect already inju red, nearly dead, or already dead fish (“naturally moribund”) that were impinged by the screen . As a consequence of relaxing the holding times and other requirements, EPA based the performance standard on a larg er set of data, with broader geographic representation. (For more information, see DCN 12 -[XXX holding time memo].)-6703.) The rationale for these revisions to the data acceptance criteria are described in further detail in the TDD, Chapter 11. Using the revised criteria, EPA revi ewed the data in each of the impingement mortality studies for potential inclusion in EP A’s evaluation of an impingement mortality performance standard. These changes resulted in an increase in the number of facility data sets acceptable for determining the impingement mortality performance standard, from four data sets at three f acilities at proposal to 26 data sets at 17 facilities today. As a result, the annual12-month average impingement mortality performance standard of all life stages of fish and shellfis h was revised from no more th an 12 percent to no more than*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 115 of 642 2524 percent mortality, including latent morta lity, for each non-fragile species that is collected or retained in a sieve with maxi mum opening dimension of 0.56 inches and kept for a holding period of 18 to 96 hours. The revised performance standard and data evaluation criteria are discussed in detail in sectionSection VI and Chapter 11 of the
TDD. EPA also reevaluated theits approach to requiring numeric co mpliance monitoring for the impingement mortality performance standardsstandard . In particular, EPA considered the costs and burden of frequent biological monitoring for those technologies that, according to EPA’s record, perform e qual to or better than the IM performance standard. As proposed, all facilities would have conducted weekly biological monitoring in perpetuity forirrespective of the co mpliance approach or te chnologies selected. EPA agrees with comments that this may be unnecessarily burdensome and of limited value for those technologies for which the potenti al performance is well documented. As discussed in the NODA (June 11, 2012; 77 FR 34321), EPA evaluated an alternative option where a two year study would be c onducted to optimize the technology, after As such, today’s final rule includes seve n compliance alternatives, only one of which the technology could be essentially viewed as a pre-approved technology without the need for further monitoring. EPA’s analysis of th e option shows a facility would incur the same capital costs (in other words modified tr aveling screens would still be installed), would reducerequires biological compliance monitoring costs by at leas t 60 percent, and would potentially result in better performance than simply monitoring in perpetuity to demonstrate a minimum performance leve l. Second, by requiring the two-year study*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 116 of 642 during the same time biological studies are re quired with the perm it application, overall biological monitoring costs would be reduced (for example, by only needing to mobilize the monitoring crew one time instead of twice). Third, by providing the Director the discretion to waive the performance optimiza tion study in subsequent permit cycles in some cases (for example, when the faci lity operations and the source water body are substantially unchanged), the overall burden of biological mo nitoring would be reduced even further. For all of these reasons, the EPA has determined that a numeric monthly average impingement mortality performance standard is not necessary, and is not including a monthly limit in the final rule. . EPA notes, however, that a facility relyi ng in part on a credit for reductions in impingement mortality already obtained at the facility (§ 125.94(c)(6 )),)) must conductgather biological monitoringdata at a minimum frequency of monthly for a period of two years in orde r to calculate their annual12-month average impingement mortality. Further, a facility choosing to comply using the impingement mortality performance standard (§ 125.94(c)(7)), must c onduct biological monitoring at a minimum frequency of at least monthly in order to calculate their annualits 12-month average impingement mortality. The annual12-month average is calculated as the sum of total impingement mortality for the previous 12 months divide d by the sum of total impingement for the previous 12 months. EPA is requiring that a facility choose to either demonstrate compliance with this requirement for the enti re facility, or for each individual cooling water intake structure. The EPA expects th at as the performance of the technology is demonstrated by the facility, the Director could reduce the frequency of biological*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 117 of 642 compliance monitoring. Further, prior to a subs equent permit applica tion, a facility could collect sufficient performance data to demonstrate compliance with the IM performance standards to the satisfaction of the Director with thethat its “systems of technologies” compliance alternative . As a result, EPA expects no is BTA at that facility would be required to conduct biological co mpliance monitoring in perpetuity

. 2. Technology Costs Since publishing the proposal, EPA receive d a number of public comments from industry stating that EPA had underestimated th e costs of modified tr aveling screens with fish returns. EPA used new information to revise the compliance cost estimates (including the methodology used for technology assignment) and the capital costs for several compliance technologies, including those used as the primary basis for the final rule. Those changes include the following:

 In response to comments challenging EPA’ s assumption that modified traveling screens were available at most facilities, EPA changed the assignment of the modified traveling cost module 45 so as to apply this only where the existing intake for the model facility intake employed trav eling screens. As a result, a number of intakes, such as those that use passive screens (e.g., fixed screens), were assigned

45 EPA used a model facility approach to develop co mpliance technology costs where different sets of compliance technology cost algorith ms called modules were assigned to individual model facility intakes on the basis of site-specific conditions. For a more detailed discussion, see the TDD Chapter 8.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 118 of 642 higher cost technologies such as larger intakes or wedgewire screens with through-screen design velocities of 0.5 fps.

 Because EPA has clarified that properly operated closed-cycle cooling meets BTA standardrecirculating systems is one of the compliance alternatives for impingement mortality, those intakes with existing closed-cycle cooling no longer receive additional impingement technology costs.

 At proposal, the design of the larger in take module was based on a through-screen velocity of 1.0 fps and, therefore, was not consistent with the low velocity standardcompliance alternatives . To ensure that this technology will be consistent at all locations, the through-screen design velocity for the larger intake was changed to a maximum of 0.5 fps, resulting in a substantial increase in capital and operational and maintenance costs.

 EPA received a number of comments noting th at fish returns might be difficult to install at some intakes. EPA reviewed the fish return cost component of the modified traveling screen module and conc luded that EPA’s costs represented an “easy” installation rather than an av erage of both easy and more difficult installation costs. To account for a wider range of fish return costs that includes those with higher costs, EPA increased the capital costs of the fish return component and included additional costs for those with particularly difficult circumstances such as very long intake canals and submerged offshore intakes. For a detailed discussion, s ee Chapter 8 of the TDD.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 119 of 642  EPA received a number of comments stat ing that it had underestimated capital costs for modified traveling screens. Duri ng site visits to several facilities, EPA obtained actual traveling scr een replacement costs. EPA compared its estimates to actual reported replacement costs and vendo r-supplied data and concluded that the capital costs were underestimated by about 20 percent. Therefore, EPA increased the capital costs of modified tr aveling screens by 20 percent. These changes to the engineering costs result in a 24 % percent increase in capital and O&M costs. The revised costing assump tions are discussed in further detail in Chapter 8 of the TDD. 3. Monitoring Costs for Impingement Mortality Many commenters expressed concern that requirements for monitoring for the impingement mortality performance standard were excessive. Of particular concern were the long-term costs for impingement mortal ity monitoring at facilities that would not be relying on either closed-cycle cooling or an intake velocity less than or equal to 0.5 fps through-screen design velocit y. The final rule includes an alternative option to meetseven compliance alternatives for the impingement standard. ThisOne of these alternative streamlines compliance and provides for reduced monitoring requirements for facilities employing modified traveling screens. This al ternative is available if the facility has demonstrated the technology is optimized to minimize impingement mortality of all nonfragile species. Under this approach, EPA requires the facility to provide site-specific performance data to identify the operationa l conditions that will ensure that the technology is being operated optimally. Once these operational conditions have been*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 120 of 642 identified, the Director must include in th e permit those operational measures and best management practices identified in the study a nd deemed as necessary by the Director to ensure proper operation of the modified travel ing screens. EPA also clarified in the rule that compliance monitoring and reporting require ments for facilities that propose to comply with the impingement mortality standard by employing one of the alternative technological and operational impingement reduction approachespre-approved or streamlined IM compliance alternatives will be largely limited to information that ensures proper operation of the installe d control technology. EPA estimat es that this alternative approach will reduce in annual monitoring and reporting costs from approximately $47 million under the proposed rule to approximately $27 million under the final rule

. 4. Benefits and Willingness to Pay Survey EPA received a number of comments on th e proposed rule and NODA addressing the use of stated prefer ence surveys to determine the public’s willingness-to-pay for benefits associated with the rule. EPA conducted a stated preference survey to calculate benefits associated with minimizing adverse impacts to aquatic ecosystems from cooling water intakes. For some commenters, the use of stated preference surveys to evaluate benefits remains controversial, and they objected to using such surveys. Other commenters acknowledge the decades of tec hnical development and improvement of these methods and support usi ng stated preference surveys. For these reasons, EPA will obtain SAB review of the stated preferen ce survey EPA conducted. The SAB review follows the external peer review EPA alr eady conducted on the survey. SAB review will provide high caliber, independent professiona l judgment concerning the quality of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 121 of 642 survey done to date, including possible im provements EPA could make. EPA is also seeking SAB input on whether and how this su rvey could be used, as support for national rulemaking or NPDES permitting whenever benefit-cost analysis is considered. EPA expects that while this process will add time (it may take an additional year or more), given the importance of this i ssue for the evaluation of ecologi cal benefits generally, it is worth taking the time to seek this additional input. Therefore, EPA will decide on any future use of the stated preference survey results after the SAB review is completed. EPA is committed to working with the stat es to support their site-specific permitting decisions with the benefit of the SAB review once it is completed. Based on consideration of public comment, EPA deci ded not to employ the survey results for purposes of decision-making in this rule, or in clude them in assessing the total benefits of the rule. The rule does not require State Direct ors to require facility owners or operators to conduct or submit a willingness to pay survey to assess benefits. B. Regulatory Approach and Compliance 1. Regulatory Approach EPA has largely adopted the regulatory approach of the proposed rule with several changes regarding comp liance, particularly with respect to the impingement mortality standardsrequirements . These changes clarify elements of the rule (as discussed in the NODAs) about which commenters expressed uncertainty and provide additional flexibility to regulated facilities in meeting the rule’s impingement mortality standard. EPA received some comments questioning whether specific provisions apply to the entire facility or to individual intakes. To clarify this issue, EPA modified the rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 122 of 642 language so as to state clearly that a facility with multiple intakes must decide whether it will adopt a single compliance strategy for impi ngement mortality for the entire facility or adopt an intake-specific compliance st rategy at each cooling water intake. Thus, facilities may select different compliance st rategies for different intakes, providing flexibility at facilities with multiple intakes. Regardless of which impingement compliance approach a facility chooses (single strategy for entire facility or different strategies for different intake s), if the facility chooses to comply with the impingement standard by operating at a ma ximum through-screen velocity of 0.5 feet per second, the facility must measure and comply with the low velocity standardcompliance alternative of 0.5 fps on an individual intake basis.

a. Impingement Mortality Standards EPA received a substantial number of comme nts requesting greater flexibility and clarification regarding complia nce with the impingement mortality standards, including suggestions that (1) impingement requirements be addressed on a site -specific basis; (2) certain technologies should be pre-approved; (3) credit should be given for existing technologies and operating conditi ons; and (4) combinations of technologies be allowed. EPA has concluded that low-cost technologi es for impingement mortality reduction are effective, widely available, feasible, and demonstrated for facilities nation ally and thus, a completely site-specific approach is not necessaryappropriate . However, recognizing that for some sites technologies EPA has identified as repr esenting BTA might not be available at all sitesother than modified tr aveling screens may allow a facility to achieve the same level of performance , EPA has included compliance options that provide for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 123 of 642 more flexibility and allow consideration of the performance of combinations of technologies and operating conditions. Some of the more significant changes include the following:

 Compliant technologies —EPA has concluded that em ploying certain technologies will meet or exceed the requirement of the impingement mortality standard, provided they meet certain desi gn and operational criteria. These essentially preapproved and streamlined technologies include a closed-cycle coolingrecirculating system , existing offshore velocity cap, and maximum design intake velocity belowof 0.5 fps. Associated with these compliance options are reduced monitoring requirements.

o Closed-Cycle Cooling —EPA has concluded that a fully closed-cycle recirculating system as defined at § 125.92 (c) (and that is properly operated and maintained) achieves “best technology available” reductions inthe impingement mortality performance standard . Even after retrofitting a facility to be closed-cycle, it may still be possible to withdraw and discharge cooling water at rates associated w ith once-through cooling. Existing facilities that retrofit to clos ed-cycle cooling often do so without modifying or replacing their condense r to optimize it for closed-cycle operation. In such cases, the facility ha s an incentive to operate its system in a once-through cooling mode, to minimize chemical costs or avoid a turbine backpressure constraint. EPA has determinedconcluded that it is

not appropriate to add conditions to the Phase I definition of closed-cycle*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 124 of 642 cooling because water may be withdraw n for purposes of replenishing losses to eliminiate this incentive.a closed-cycle recirculating system other than those due to blowdown, drift, and evaporation from the cooling system. However, the final rule prov ides the Director the discretion todetermine whether the operation of a cooling system minimizes the makeup and blowdown flows withdrawn, consis tent with the definition of a closed-cycle recirculating system (40 CFR 125.92(c)).

o Existing Offshore Velocity Caps —The record indicates that an existing offshore velocity cap as defined at § 125.92 (v) also achieves the necessary reductions in impingement mortality and is thus BTAmeets the IM standard . Data in the record concerning ex isting velocity caps show that a velocity cap alone is insufficient, but data on existing offshore velocity caps shows that a velocity cap in combination with their current offshore locations meet EPA’s BTA performance standard for impingement mortality . EPA has determined that new offshore velocity caps could comply using the combination of te chnologies approach in § 125.94(c)(6). The offshore component likely makes the velocity cap technology unavailable except to facilities in ma rine waters and certain Great Lakes locations; therefor e, the technology alone is not BTA.

o Through-Screen Velocity— EPA has clarified that compliance with thea 0.5 fps intake velocity standard alone is BTA for impingement mortalityachieves the IM standards . EPA’s record shows an intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 125 of 642 velocity of 0.5 fps or lower provide s similar or greater reductions in impingement, and therefore impingement mortality, than modified traveling screens – the technology fo rming the basis for the numeric impingement mortality limitperformance standard that is the goal for all facilities. There are two ways to demonstrate compliance using intake velocity. First, an intake with a maximum design through-screen intake velocity less than or equal to 0.5 fps is pre-approved BTA for impingement mortality and does not require further monitoring. Alternatively , under a streamlined option , the facility may demonstrate to the Director that the facility m eets the velocity requirement through monitoring of the actual intake velocit y. Screen velocity can be monitored by direct measurement or by calculati on using the volumetric actual intake flow and source water surface elevation.

 Modified Traveling Screens —A facility must operate modified traveling screens 46
that the Director determines meets the definition at § 125.92 .(s). Facilities will demonstrate that they have optimized pe rformance of their tr aveling screen to minimize IM.

46 While rotary screens are technically not modified traveling screens, the regulation at §125.92(s) defines modified traveling screens to include traveling water screens that incorporate measures protective of fish and shellfish. EPA has thus provided the flexibility fo r other types of active screens that achieve the same or better performance than modified traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 126 of 642  Systems of Technologies asto Meet the BTA for IM Standard —EPA received a substantial number of comments asking wh ether previously in stalled technologies or various combinations of technologies and operating conditions could also meet the BTA standard for impingement mortality. For example, some technologies, such as louvers, reduce the rate of impingement, but the effect on overall impingement mortality reduction cannot easily be measured and would not appear in biological sampling of the technology. In EPA’s view, the Director should take into account the reduction in impingement – for example, that associated with such technologies as louvers or behavioral deterrents, or due to intake location – when determining permit conditions to include in the facility’s permit in order for a combination of technologies to achieve the required impingement mortality standards to include in the facility’s permit . Thus, the facility should obtain credit toward the impingement mortality standard for such reductions in the rate of impingement. A number of the flexibilitie s above were described in the June 11, 2012 NODA, and EPA has included a provision to allow additional flexibility in achieving compliance through the use of a combination of technologies and operating conditions. A facility may use a system of technologies, management practices and operational measures to achieve the impingement mortality standard, including, for example, flow reductions, seasonal operation, unit closures, credit for intake location, beha vioral deterrent systems, and other technologies and operational measures. The Director must determine, based on a demonstration by the facility to the Direct or, that the system of technologies or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 127 of 642 operational measures, in combination, have been optimized to minimize impingement mortality of all non-fragile species. The Director may require additional operational measures, best ma nagement practices, and monitoring as part of the demonstration. In additio n, the facility’s permit must include conditions to ensure that the facility opera tes its cooling water in take structures in a manner consistent with the conditio ns and measures identified in its demonstration to the Director.

 Numeric IM LimitPerformance Standard —As a practical matter, EPA expects that very few facilities will choose to comply with the numeric impingement mortality performance standard. Those facilities that do choose to comply in this way will need to demonstrate to the Dir ector how the technology the facility is implementing enables the facility to m eet the impingement mortality standard. The numeric limitstandard provides a pathway to compliance for innovative technologies that may be developed in the future. EPA also received many comments stat ing that barrier nets were both unnecessary and might be unavailable in many locations. Because EPA’s revised impingement data set had sufficient data to characterize shellfis h impingement, EPA has eliminated the barrier net requirement in the final rule. See Section VI for more information. b. Definition of Closed-Cycle Cooling System In the final rule, EPA revised the definiti on of a closed-cycle recirculating system to provide additional flexibility for the Director in determining which closed-cycle*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 128 of 642 cooling systems comply with the IM &E performance standards. The proposed rule’s definition of “closed-cycle recirculating sy stems” included, as elements of a properly operated closed-cycle system performance, re quirements generally expressed in terms of cycles of concentration (COC) or percenta ge flow reduction rela tive to a once-through cooling system. Cycles of concentration represen ts the accumulation of dissolved minerals in the recirculated cooling water. Discharge of a portion of the water (called “blowdown”) is used to contro l the buildup of these minerals. COC is a measure of how concentrated are chlorides are in recirculated water relative to make-up water, and thus how longwell a system recycles intake water befo re replacing it with new withdrawals. This is not to be confused with cycles of flow, as some commen ters appeared to do. Cycles of concentration can be measured as the ratio of chloride levels in the recirculated water or blowdow n relative to the chloride levels in the source water ., or makeup water. Some commenters stated that, while they have been operating as closedcycle units for many years, they were concerne d that their facilities would not be “closedcycle recirculating systems” under the pr oposed definition because they would not achieve the required COC. EPA has found the concentration cycles in the majority of cooling towers usually range from 3 to 6 at power plants, and can often exceed 9 at manufacturing facilities. However, EPA r ecognizes that many manufacturers have complex water balances, and calculating a specif ic flow reduction attr ibutable to cooling water use could be difficult and time cons uming. In such cases, many manufacturers could far more readily calculate the cycles of concentration of part icular unit operations, and could therefore show those unit operations that use cooling water meet the conditions*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 129 of 642 for closed-cycle cooling. EPA found in site visits many complex ma nufacturing facilities already have this capability, and have achie ved very high COC. Likewise, power plants may find it much easier to measure flow than cycles of concentration. Accordingly, EPA’s proposed rule attempted to recogni ze performance using either metric. EPA expects most power generators would use perc entage flow reduction to demonstrate they are closed-cycle, and expects most manuf acturing facilities would use COC for those units that utilize water for c ooling purposes. Increasing the am ount of minerals present in the water by cycling can make water less ag gressive to piping; however, EPA is also aware that excessive levels of minerals (s uch as found in certain source waters, most notably those with higher salini ty) can cause scaling problems, leading to different levels of both metrics for freshwater and saltwater facilities. EPA carefully considered thes e issues and concluded that in most cases, facilities should qualify as the most important aspect of the definition of a properly operated closed-cycle cooling system is that the makeup flow be minimized. Thus EPA has removed the numeric levels of the metrics as a threshold, while retaining the minimized makeup flow aspect of the definition. As an example, in the case of a facility that uses make-up water from a freshwater sour ce, a Director may determine that a closed-cycle recirculating systems under performance measures in the proposed definition. To address any residual situations wh ere the COC definition does not work, EPA revised the definition for the final rule to providesystemcan generally be deemed to minimize makeup and blowdown flows if it reduces actual intake flow s (AIF) by 97.5 percent as compared to a once-through cooling system or if its cooling tower is operated at a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 130 of 642 minimum cycles of concentrati on of 3.0. And likewise, in the cas e of a facility that uses make-up water from a saltwater, brackish, or ot her source with a salinity of greater than 0.5 parts per thousand, a Director may determine that a closed-cycle recirculating system “generally” will achieve prescribed percenta ge can generally be deemed to minimize make-up and blowdown flows if it reduces actu al intake flows (AIF ) by 94.9 percent as compared to a once-through cooling system or if its cooling tower is operated at a minimum cycles of concentration of 1.5. These reductions or minimumand cycles of concentration are illustrative. A Director may de termine that other levels near these numbers could also constitute a closed-cycle recirculating system . The final rule , however, further recognizes that in certain una voidable circumstances, these specifiedlevels for COC or percent flow reduction values might not be achievable at all facilities . Such circumstances could include situations where water quality-based discharge limits might limit the c oncentration of a pollutant that is not readily treatable in the cooling tower blowdown or situations wh ere varying source water quality could lead to unavoidable problems concerning scale fo rmation, solids buildup, corrosion, or media fouling. If a facility demonstrated that such s ite-specific circumstances were responsible for the facility’s failure to achieve the benc hmarks, theSuch facilities should demonstrate these circumstances to their Director and i ndicate the measures they have taken to minimize makeup flows. The Director will retain the disc retion to conclude that the particular facility employs a cl osed-cycle recirc ulating system even ifwhen the benchmarks are not met.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 131 of 642 In cases where the Director will make a de termination as to whether the facility’s cooling system meets the de finition of a closed-cycle recirculating system, EPA’s intent is that the withdrawal of small amounts of serv ice water (for uses such as fire suppression, potable water, screenwash wate r, vehicle wash water, and such) do not preclude consideration of the system as closed-cycle. To avoid misuse of this provision, the Director will make the final determination. Finally, EPA data show more than 50 fac ilities have cooling systems that include impoundments. In some cases, the cooling systems that include impoundments were created in the waters of the U.S., in whole or in part, or were created in uplands but withdraw make-up water from waters of th e U.S. These cooling systems may perform like a closed-cycle recirculat ing system. EPA has clarified at 40 CFR 125.92(c)(2) that a cooling system that includes an impoundment la wfully created in the waters of the U.S for the purpose of cooling may be considered a closed-cycle recirculating system. As with other closed-cycle recirc ulating systems, the Director will determine whether the impoundment minimizes the withdrawal of water for cooling purposes and therefore meets the definition of a closed-cycle recircul ating system. See Section VI for further discussion.

c. Entrapment The proposed rule included a prohibiti on on trapping organisms in an intake structure with no viable escape route. Ma ny commenters expressed concern that the entrapment requirements were not well define d and would require co stly technologies not considered in EPA’s cost estimates. Moreover, in the commenters’ view, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 132 of 642 requirements could be difficult to comply with, particularly where cooling systems employ impoundments or basins downstream of the initial in take structure. The final rule deleted the requirement that facilities de monstrate that their cooling water intake structures do not lead to entrapment, however, a facility that entrap s fish must count the entrapped organisms as impingement mortality.E PA agrees that in some cases, such as where a canal or basin for maintaining cons istent water levels is located behind the CWIS, that the proposed entrapment requireme nt could require additional controls such as additional fish returns that are not, in all cases, feasible . For example, EPA found in site visits that the forebay may be located more than a mile from the CWIS, and a fish return in that situation would not have been feasible. The final rule deleted the requirement that prohibited entrapment. In th e final rule, facilities would account for all impinged fish and shellfish when conducting their two year performance study. To the extent entrapment of shellf ish poses a concern, the Direct or may establish additional measures, such as seasonal deploym ent of barrier nets, under § 125.94(c)(8). d. Requirements for Threatened and Endangered Species EPA consulted with the Fish and Wildlife Service and National Marine Fisheries Service , as required by the Endangered Species Act, and EPA made a number of adjustments to the rule specific to the protection ofprotect threatened and endangered species and designated critical habitat as a result . of the consultati on; the protections were included to insure that the rule is not likely to jeopardize the continued existence of listed species or result in the destruction or adverse modifica tion of designated critical*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 133 of 642 habitat. To be clear, the ESA provisions of the rule extend to all listed T&E species, not just fish and shellfish. See Section VIII.K for a summary of these provisions. 2. Compliance Timelines for Impingement Mortality and Entrainment Requirements Timelines At proposal, compliance deadlines for impingement mortality and entrainment requirements were set separately. Faciliti es would have been required to meet impingement mortality reduction requirements as soon as possible, but no more than 8eight years after the effective date of the rule. Compliance with entrainment reduction requirements would have been set by the Director. Many commenter s expressed concern that the compliance timeline for the impingement mortality and entrainment requirements should be harmonized to prevent a facility fr om having to install a technology to comply with impingement mortality requirements, only to be required at a later date to install an entrainment reduction technology that effec tively renders the investment in the impingement mortality technology obsolete or worthless. EPA agrees that facilities required to in stall both impingement and entrainment compliance technologies will benefit from re duced compliance costs if the compliance scheduling is coordinated. EPA also agrees that requiring more timely decisions on entrainment requirements than anticipated at pr oposal will facilitate these cost savings without sacrificing fish protection. Thus entrainment requirement s must be written into all permits issued in 2017 and beyond. In some cases, impingement compliance can be attained with entrainment technologies. For example, the Director may determine that the installation of modified fine-mesh traveli ng screens and narrow-slot wedgewire screens*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 134 of 642 will achieve the impingement mortality standard and further, that this same equipment represents, on a site-specific basis, BTA entrainment control. If the compliance schedule is not harmonized, it is possible that a fac ility could install (at significant cost) coarsemesh traveling screens that it might have to la ter retrofit with fine-mesh panels. It is also possible that a facility coul d make modifications necessary to attain a 0.5-fps throughscreen velocity to meet the IM standards and later have closed-cycle cooling identified as BTA for entrainment, thereby making the inta ke modifications for impingement control
unnecessary. To address this issue in the final rule, EPA revised the compliance requirements so that the Director is required first to establish entrainment requirements under § 125.94(b)(1) in the final permit. The facility w ill then be required to comply with the impingement mortality standard in § 125.94(c) as soon as possible thereafterpracticable thereafter. See Section VIII on implementation for more detailed discussion

. Because an entrainment requirement could require controls that take many years to design, finance and construct, the Director may establish interim milestones related to meeting the final requirements to ensure that the facility is making progress. C. New Units EPA has revised the definition of new un its to include repowered units where both the steam turbine and condenser are re placed, except where the new units are high energy efficiency units. For mo re details, see Section I. EPA has revised the definition of new un its to mean a stand-alone unit at an existing facility the construction of which is commenced after the effective date of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 135 of 642 today’s final rule; consists of only a stand-alone unit constructed at an existing facility; and that does not otherwise meet the defi nition of a new facility at § 125.83. A standalone unit is a new, separate unit that is constructed at an existing facility. New unit includes stand-alone units that are added to a facility for purposes of the same general industrial operation as the existing facilit y. A new unit may have its own dedicated cooling water intake structure, or may use an existing or modified cooling water intake

structure.

VI. Basis for the Final Regulation In response to the Supreme Court’s decision in Entergy Corp. v. Riverkeeper, Inc. et al. in April 2009, and the Second Circuit decision in Riverkeeper II, EPA has reevaluated the requirements for existi ng facilities under CWA section 316(b). As discussed above, EPA collected additi onal data and information to update both its assessment of the efficacy of various technological measures for reducing IM&E costsand analyses prepared for the earlier rule-making efforts. TheEPA’s additional technical rigor provided a strengthened EPA’s analysis of BTAdifferent technologies for reducing IM and th eir effectiveness . As a result of its revised assessments and further consideration of the factors affecting the availability of closed-cycle recirculating systemsdifferent technology in a wide range of settings , EPA has decided not to repromulgate requirements for existing facilities that mirror those of the final Phase II rule. InsteadFurther , EPA is adopting, for the reasons e xplained in detail below, a new framework. In addition, as previously noted, EP A decided to address all existing facilities*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 136 of 642 subject to section 316(b) in this rule (i.e., combiningboth those subject to the Phase II rule and partssome of those subject to the Phase III rule). For a brief description of the final rule, see Section IV. A. EPA’s Approach to BTA CWA section 316(b) requires EPA to estab lish standards for cooling water intake structures that reflect the “best tech nology available for minimizing adverse environmental impact.” As explained above, th e statute is silent with respect to the factors that EPA should consider in determining BTA, but cour ts have held that section 316(b)’s reference to CWA sections 301 and 306 is an invitation for EPA to look to the factors 47 considered in those sections in esta blishing standards for section 316(b).
But EPA , when considering such factors, is not bound to evaluate these factors in precisely the same way it considers them in establishing effluent limitations guidelines under CWA section 304. As the Supreme Court noted, given the absence of any factors specified in section 316(b), EPA has much mo re discretion in its standard setting under section 316(b) than under the effluent guidelines provisions. Therefore, the statute vests
EPA haswith broad discretion in determining what is the “best” technology that is

“ available ” for minimizing adverse environmental impact. TheAs the Supreme Court has

47 The factors specifically delineat ed in CWA sections 301 and 306 that EPA may consider include cost of the technology, taking into account the age of the equipment and facilities, process employed, engineering aspects associated with a particular technology, process changes and non-water quality environmental impact (including energy requirements).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 137 of 642 further explained that , under section 316(b), the “best” technology “available” may reflect a consideration of a number of factors and that “best” does not necessarily mean the technology that achieves the greatest re duction in environmen tal harm that the regulated universe can afford. Rather, the “bes t” (or “most advantageous,” in the court’s words) technology may represent a technology that most efficiently produces the reductions in harm. EPA interprets section 316(b) to require the Agency to establish a standard that will best minimize impingement and entrainment—the main adverse effects of cooling water intake structures not otherwise addressed by the other sections of the CWA (e.g., thermal discharges). In EPA’s view, severa l important considerations underpin its decision. First, its BTA determination should be consistent with, and reflective of, the goals of CWA section 101: “to restore and maintain the physical, chemical, and biological integrity of the Nation’s waters,” with the interim goal of “water quality which provides for the protection and propagation of fish, shellfish, and wildlife and provides for recreation in and on the water.” Second, E.O. 13563 directs EPA and other Fe deral agencies to identify and use the best, most innovative and least burdensome tools for achieving regu latory ends. In its regulatory actions, agencies “must take into account benefits and cost, both quantitative and qualitative,” and to the extent permitted by law, only promulgate regulations that are based on “a reasoned determination that its be nefits justify its costs (recognizing that some benefits and costs are difficult to quantify ).”)” (see section 1(b)(1)). In selecting a regulatory approach, agencies , to the extent permitted by law, must tailor regulations to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 138 of 642 impose the least burden on society and, in c hoosing among regulatory alternatives, select “those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; dist ributive impacts; and equity )”.)” to the extent permitted by law. 76 FR 3821 (January 21, 2011). Because the Supreme Court has concluded that the CWA authorizes EPA to consider costs and benefits in its BTA determination, EPA has cons equently considered costs and benefits in this final rule as directed by the President. In accord with E.O. 13563, EPA has concluded that the benefits of the selected option for the final rule justify its costs. For additional discussion, see sectionSection VI .F below. EPA has also considered the costs and the benefits of the diffe rent technologies it evaluated for BTA. Consideration of benefits is compli cated by the debate about the tools and data that would permit a complete expres sion of ecological benefits in monetized terms. EPA has, however, used the best ava ilable science regarding widely accepted tools and data to monetize the benefits of the various options in four major categories: recreational fishing, commercial fishing, nonuse benefits, and benefits to threatened and endangered species (see sectionSection X below). EPA has concluded that the benefits estimated for the first two categories are generally complete, while the benefits estimated for the latter two categories are far from bei ng complete for a number of reasons. For example, the nonuse benefits consider only one species and only for the northeast and middle Atlantic states.transfer was based on a species that represents less than one percent of adverse environmental impacts. EPA is continuing to re fine its tools to develop a more complete analysis concerning benefits for future application.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 139 of 642 In selecting the “best” technology available for minimizing adverse environmental impact, EPA looked at a number of factors. As discussed previously, EPA’s initial approach to 316(b) standard setting was similar to one it follows in considering a technology-based rule under sections 301, 304, and 306. EPA first considered the availability and f easibility of various technologies, their costsand then evaluated costs associated with these technologies (including potential costs to facilities and households), and thetheir economic impacts associated with these technologies.. EPA also reviewed the efficacyeffectiveness of these technologies in reducing impingement mortality and entrainment. Further, EPA also considered additional factors set out in CWA section 304(b), including location, age, size, and type of facility. In addition, EPA

next considered the non-water quality environm ental impacts of different technologies on energy production and availability, electri city reliability, and potential adverse environmental effects that could arise from the use of the different technologies evaluated. As a result of this thorough evaluation, EPA is establishing a rule that includes ain the case of the BTA standard for impingement mortality , EPA based the standard on theperformance of well-operated modified traveling screens with a fish handling and return system . A as defined more specifically by the rule. Under the BTA IM standard, a facility has severala number of options for compliance. In the case of the BTA standard for entrainment, on the other hand, EPA could not identify one technology that represented BTA for existing f acilities on a national basis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 140 of 642 B. Overview of Final Rule Requirements As noted, EPA concluded that the best technology available for minimizing impingement mortality was “modified traveling screens,” as more specifically defined in the rule. The BTA Impingement Mortality St andard includes seven technology options for complying with the standard whose perfor mance is equivalent t o, or better performing than modified traveling screens. First, the rule identifies f our technologies (closed-cycle recirculating systems, reduced design intake velocity, reduced actual intake velocity, and existing offshore velocity caps) that reduce im pingement mortality as well or better than the technology EPA reviewedm odified traveling screens, and therefore will generally comply with the impingement requirementsBTA Impingement Mortality Standard of today’s final rule. The rule also provides that, if the Direct or determines that modified traveling screens are insufficient to protect shellf ish, the Director may establish additional measures under § 125.94(c)(8) such as seasonal de ployment of barrier nets, or if modified traveling screens 48 are insufficient to protect other species, the Director may establish additional protective measures under § 125.94(c) (9). In addition, the rule provides in 125.94(g) that the Director may establish addi tional control measures and monitoring or reporting requirements in the permit in order to protect Federally-listed threatened and endangered species and designated critical habitat. The Director may include such

48 Or any of the IM compliance alternatives.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 141 of 642 conditions that are designed to minimize inci dental take, reduce or remove more than minor detrimental effects to Federally-listed species and designated critical habitat or avoid jeopardizing Federally-listed species and or destroying or adversely modifying designated critical habi tat (e.g., prey base). Next, the final rule provides an option that allows a facility to demonstrate to its permitting authority that it has installed travellingmodified traveling screens – the technology EPA identified as the basis for the BTA impingement mortality standard

--– and to provide data on the performance of its screens. The facility must demonstrate that its modified traveling screens are consiste nt with EPA’s defin ition and demonstrate through an impingement technology performance optimization study that its screens have been optimized to minimize impingement mortality. After consideration of the information provided, the permitting authority will determine whether the technology is BTAthe best technology available for impingement mortality reduction at the site and include permit conditions to ensure optimal performance of the screens. In other words, the owner or operator of a facility will be deemed to be in compliancecomply with the
BTA standardsstandard for IM at § 125.94(c)(5) if that facility uses modified traveling screens as defined at § 125.92 ,(s), and operates in accordance with the permit conditions established by the Director that ensure th e technology will perform as demonstrated. If the Director determines that the modified traveling screens are insufficient to protect shellfish, the Director may establish a dditional measures for shellfish under § 125.94(c)(9) such as seasonal deployment of barri er nets, or if the Director determines that the modified traveling screens are insuffi cient to protect fragile species, the Director*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 142 of 642 may establish additional measures under § 125.94(c )(11) such as behavi oral technologies. HoweverAs noted above, in certain circ umstances, under § 125.94(c)(8), (9) and 125.94(g), the Director may require a dditional protective measures. As stated in the June 11, 2012 NODA , EPA does not intend for facilities to install closed-cycle cooling solely for the purpose of meeting the IM requirements. In fact, EPA expects all facilities could comply wi th IM requirements without relying on retrofitting to closed-cycle cooling (see Exhibit VIII-1 ).The, showing expected compliance alternative based on technologies in place today). If a faci lity chooses to comply with the BTA IM standard by installing and opera ting traveling screens, the screens must meet the definition of modified trave ling screens provided at § 125.92 , which includes, but is not limited to(s). These may include, for example , modified Ristroph screens with a fish handling and return system, dual flow screens with smooth mesh, and rotary screens with fish returns such as v acuum pumps. EPA based thisthe regulatory definition on the commonly found features of modified trav eling screens used in developing the BTA impingement mortality performance standard. In addition, the final rule also provides a compliance option that would allow facilities with the option of demonstrating to the Dir ector on a site-specific basis, similar to the showing for travellingmodified traveling screens, that a system or combination of technical and operational measures will representachieve the BTA standard for impingement reductionmortality at a particular site. TheUsing a combination of technical and operational measures as the basis for demonstrating compliance allows facilities the opportunity to take credit for intake locati on, flow reduction, or other measures already*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 143 of 642 employed to reduce the rate of impingement. Further, the combination of technical and operational measures provides the flexibility to use a system of approaches to reducing impingement and impingement mortality. This may include technologi es that were not found to reduce impingement consistently or in all circumstances, but that on a sitespecific basis such technologies may have been demonstrated to provide a high level of performance. For example, a facility mi ght employ light and sound to induce an avoidance response from certain species. Th is might not alone address impingement mortality for all non-fragile species at the intake, therefore additional measures (intake location, barrier nets, etc.) would also be appl ied, to minimize the rate of impingement or impingement mortality. For both the screens and system of t echnologies, a two year study must be completed in which biological monitoringdata collection is used to make site-specific adjustments to screens or the combinati on of technologies in order to optimize performance at that facilit y. Those optimal operating para meters then become permit conditions. For facilities that have already installe d traveling screens or the technologies associated with the system approach, EPA has combined the two year biological study with the other permit application an d rule requirements for biological monitoringdata collection , including the source water baseline biological and entrainment characterizationsSource Water Baseline Biological Characterization Data . In this manner, EPA is establishing a consistent set of bi ological study requirements, with an overall reduction in the burden of the require d level of biological monitoring.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 144 of 642 Lastly, a facility canmay choose to comply with the numerical impingement mortality performance standard that was established based on the BTA technology. If a facility chooses this compliance option, it must conduct periodic monitoring to demonstrate compliance. Under this last co mpliance option, a facili ty could implement innovative technologies to addr ess impingement mortality an d subsequently demonstrate that their performance is as good as, or better than, a modified traveling screen with fish handling and return system. EPA envisions that after a sufficient demonstration period of a technology’s performance, the facility wi ll be able to qualify its operation under the previous option. For entrainment, on the other hand, EPA could not identify one technology that represented BTA for allexisting facilities on a national basis , for the reasons explained in detail below. Instead, the national BTA en trainment standards for existing facilities establishes a detailed regulatory framework for the determination of BTA entrainment requirements by the permitting authority on a site-specific basis. While site-specific permit requirements are not new, what is different about this approach from the current requirement for perm its to include 316(b) conditions is that for the first time, EPA is establishing a detailed specific framework for determining BTA entrainment control requirements. Thus, the rule identifies what information must be submitted in the permit application, prescribes procedures that the Director must follow
in its decision making and factor s that must be consider ed in determining what entrainment controls will represent the BTA and associated requirements are BTA on a site-specific basis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 145 of 642 As previously noted, EPA looked at a num ber of factors in considering what national entrainment standard it should adopt. In addition to those ge neral considerations discussed above,As discussed in detail in the following se ction, EPA identified only one high performing technology as a potential BTA candidate for entrainment: closed-cycle recirculating systems as defined at § 125.92(c )(1). While there are other technologies for entrainment that are available or demonstrat ed, they are not uniformly high performing technologies. See TDD Chapter 6 for more information regarding the lack of intermediate performing t echnologies for entrainment. EPA has identified the following specific factors as the key elements in its decision not to prescribe a singlethis technology as the basis for a national BTA determinationstandard for entrainment : land availability, air emissions permits , and remaining useful plant life. How these factors dictated EPA’s decision is discussed below. For new units at existing facilities, EP A has established BTA requirements to minimize impingement mortality and en trainment, based on flow reduction commensurate with closed-cycle cooling. The rest of this chaptersection describes in detail the above considerations. BC . Technologies Considered to Mini mize Impingement and Entrainment As described in Chapter 4 of the TDD, power plants and manufacturers withdraw large volumes of cooling wate r daily. Cooling water withdraw als are responsible for over half of surface water withdrawals for all uses in the United States, including agriculture and municipal uses. The purpose of thesecooling water withdrawals is to dissipate that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 146 of 642 portion of the heat that is a by-product of industrial processe s that facilities have not harnessed to a productive end and therefore view as waste heat. Increasing thermal efficiency of the industr ial processes is perh aps the best way to reduce cooling water demands, and hence the ad verse environmental impacts that result. The majority of environmental impacts a ssociated with intake structures are caused by water withdrawals that ultimately re sult in the loss of aqua tic organisms. These losses might be from impingement, entrainment, or both. Impingement occurs when organisms are trapped against the outer part of a screening device of an intake structure. 49 The force of the intake water traps the orga nisms against the screen and they are unable to escape. Not all organisms in the inco ming water are impinged, however. Some might pass through the screening device and travel through the entire cooling system, including the pumps, condenser or heat exchanger tubes, and discharge pipes. Th is is referred to as entrainment. Various factors lead to the suscep tibility of an organism to impingement or entrainment. For more detailed discussion of impingement and entrainment and the associated mortality and other effects, see sectionSection III above. For purposes of this rule, EPA is adopting the following definitionsconventions for defining impingement and entrainment and mortality:

49 Typically, cooling water intake structures use various screening devices to prevent objects (e.g., debris, trash) from being drawn in with the cooling water an d ultimately clogging or damaging the cooling water system, especially the condenser or heat exchanger components.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 147 of 642  Impingement: Occurs when any life stage of fish and shellfish are pinned against the outer part of an intake structure or against a screening device during intake water withdrawal. Impingement may also occur when an organism is near a screen but unable to swim away from th e intake structure because of the water velocity at the intake.

 Entrainment: Occurs when any life stages of fish and shellfish are drawn into the intake water flow entering and passing through a cooling water intake structure and into a cooling system.

 Impingement Mortality: The death of fish or shellfish due to impingement. It may also include organisms removed from th eir natural ecosystem and lacking the ability to escape the cooling water intake system and thus subject to mortality. Note that impingement mortality need not occur immediately. Impingement may cause harm to the organism which resu lts in mortality at some time after impingement. For purposes of this rule, EPA has defined impingement mortality as the death of those organisms collected or retained by a sieve with a maximum opening of 0.56 inches; this includes both the 3/8-inch sieve and a 1⁄2-inch by 1⁄4- inch mesh. 50

 Entrainment Mortality: The death of fish or shellfish due to entrainment. This is typically associated with mortality relate d to small organisms that pass the entire

50 Mesh sizes of 3/8” are commonly referred to as coarse mesh; this refers to the size of the screen opening (in contrast to fine mesh) and not the roughness of the mesh material.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 148 of 642 way through a facility and ar e killed as a result of ther mal, physical, or chemical stresses. This term also includes the deat h of those fish and shellfish that may occur on fine mesh screens or other tec hnologies used to exclude the organisms from entrainment. For purposes of this rule, EPA defined entrainment mortality as the death of those organisms passing thr ough a sieve with a maximum opening of 0.56 inches. Impingement mortality is typically le ss than 100 percent of the impinged organisms . if a fish return or backwash system is employed. Impingeable organisms are generally not very small fish ofor early life stages (e.g., those that can pass through 3/8 inch mesh screens), but typically are fish with fully formed scales and skeletal structures and well-developed survival traits such as behavioral responses to avoid danger. EPA’s data demonstrate that, under the proper conditions, many impinged organisms can survive. Entrainable organisms generally consist of eggs and early life stage larvae. Early larvae generally do not have skeletal struct ures, have not yet deve loped scales, and in many cases are incapable of swimming for se veral days after hatching. EPA has found that entrainable organisms that are collected after interaction with the CWIS show poor survival in the case of most eggs, and essent ially no survival of larvae. Consequently, on the basis of the record information it has re viewed, EPA concluded for purposes of this rule that all entrained organisms die, i.e ., no entrained organisms survive. (See, for example, 76 FR 22188 [April 20, 2011] and 69 FR 41620 [July 9, 2004].) Therefore, without entrainment control, entrainment is assumed to lead to entrainment mortality.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 149 of 642 Also see Chapter A7 of the Phase II Re gional Studies Document (DCN 6-0003; EPAHQ-OW-2002-0049-1490). Whether an organism near a cooling wa ter intake structure is impinged or entrained is a function of the screen mesh size. Holding the number and size distribution of organisms at the intake constant, a larger screen mesh size will result in relatively more entrainment, while a smaller mesh size will result in relatively more impingement. Historically, traveling screens deployed by pow er plants used a 3/8-inch mesh size. For this reason, most studies and reports referring to impingeme nt are in fact referring to those organisms impinged on a 3/8-inch mesh screen. Similarly, entrainable organisms are those organisms fitting through a mesh of le ss than or equal to 3/8 of an inch. This also means the majority of entrainable organisms are composed of eggs, larvae, and smaller juveniles. More recent studies, particul arly those that evaluate mesh sizes smaller than 3/8 of an inch, continue to refer to impingement as any organism caught on the screen. This can cause some confusion becau se many organisms that would have been entrained with a 3/8-inch mesh instead b ecome impinged by the finer mesh. These are referred to as impinged entrai nables or “converts.” EPA has also found that most studies of entrainment are biased toward the larger (older) larvae with higher survival rates and do not analyze survival of smaller larvae. This bias implies a focus on larvae body lengths sufficient to have begun scale and bone development, and it generally reflects the more motile early life stages. EPA found that these study findings cannot be applied to smaller and less motile life stages, which are incapable of avoidance responses. It is also important to note that preventing entrainm ent by some exclusion technologies might*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 150 of 642 result in very high entrainment reductions by converting entrainment to impingement, but these impinged organisms may have an even lower likelihood of surviving impingement than larger potentially impinged organism s. Therefore, while entrainment refers specifically to passage through the cooling wa ter intake system, entrainment mortality also includes those smaller organisms killed by exclusion from the cooling water intake system. Today’s rule uses the 3/8-inch mesh size as part of the de finition of impingement mortality and entrainment mortality as a mean s of clearly differentiating those organisms that might be susceptible to impingement or entrainment, and thereby avoids any confusion over the status of impi nged entrainables or “converts.” Generally, two basic approaches can be us ed to reduce impingement mortality and entrainment. The first approach is flow reduc tion, where the facility installs a technology or operates in a manner to reduce or elimin ate the quantity of water being withdrawn. Reduced volumes of cooling water produ ce a corresponding reduction in impingement and entrainment and, therefore, reduced impingement mortality and entrainment mortality . It should be noted that , at electric generators, flow reduction could be achieved, perhaps most effectively, by in stalling more energy efficient production, thereby requiring less cooling pe r unit of electricity generate d. The second way to reduce impingement and entrainment is to install tec hnologies or operate in a manner that either (1) gently excludes organisms or (2) colle cts and returns organisms without harm. Exclusion technologies or practic es divert those organisms th at would have been subject to impingement and entrainment away fr om the intake. Collection and return*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 151 of 642 technologies are installed to co llect and return organisms to the source water, allowing impingement to occur but possibly preventing impingement mortality. Although not available to a ll facilities, two other approaches to reducing impingement and entrainment are (1) relocating th e facility’s intake to a less biologically rich area in a water bodywaterbody , and (2) reducing the intake velocity. Relocating an intake farther from shore or at greater dept hs can be effective at entrainment reduction but is not generally available to many inland facilities because the distance or depths required to reach less biologica lly-productive waters are not ge nerally available. Further, while a far offshore intake may exhibit a lowe r density of organism s, the species found will change as a function of distance from th e shoreline as well as depth in the water column. Therefore, it may not always be de sirable to relocate an intake structure. A reduced intake velocity provides motile orga nisms the opportunity to swim away from the intake structure. This approach can be very effective in reducing impingement but has no effect on entrainment. The sectionSections 1 and 2 below further describes fl ow-reduction and exclusion technologies. 1. Flow Reduction Flow reduction is commonly used to re duce impingement and entrainment. For purposes of this rulemaking, EPA assumes that entrainment and impingement (and associated mortality) at a si te are proportional to source water intake volume. Thus, if a facility reduces its intake flow, it similarly reduces the amount of organisms subject to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 152 of 642 impingement and entrainment. 51 Some common flow reduction technologies are variable frequency drives and variable speed pu mps, seasonal operation or seasonal flow reductions, unit retirements, use of alternat e cooling water sources, water reuse, and closed-cycle cooling systems. For additiona l detailed information on these technologies as well as others, see Chapter 6 of the TDD, “California’s Coastal Power Plants: Alternative Cooling System Analysis” (DCN 10-6964), and EPRI’s “Fish Protection at Cooling Water Intake Structures: A T echnical Reference Manual” (DCN 10-6813). a. Variable Frequency Drives and Variable Speed Pumps A facility with variable speed drives or pumps operating at their design maximum can withdraw the same volum e of water as a conventi onal circulating water pump. However, unlike a conventional circulating water pump, variable speed drives and pumps allow a facility to reduce the volume of wa ter being withdrawn fo r certain periods. The pump speed can be adjusted to reduce wate r withdrawals when cooling water needs are reduced, such as when ambient water temperat ures are colder (and therefore capable of

51 Impingement rates are related to intake flow, intake velocity, and the swimming ability of the fish subject to impingement. Entrainment is generally considered to be proportional to flow and therefore a reduction in flow results in a proportional reduction in entrai nment, as EPA assumes for purposes of national rulemaking that entrainable organisms are uniformly distributed throughout the source water. EPA has consistently applied this assumption throughout th e 316(b) rulemaking process (for a discussion of proportional flow requirements in the Phase I and II rules see, e.g., 66 FR 65276 and 69 FR 41599; also see EPA’s 1977 draft guidance manual for 316(b), available at DCN 1-5045-PR from the Phase I docket) and continues to assume that it is broadly applicable on a national scale and is an appropriate assumption for a national rulemaking. EPA recognizes that this assumption does not necessarily apply when relocating or varying the time pattern of withdrawals, such that these may be effective strategies to reduce impingement and entrainment in some locations.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 153 of 642 dissipating more heat), when fewer generating units are operating or when fuel is more efficiently burned. In site visits, EPA found th at variable drives and pumps were typically used at units operating belo w capacity, such as load

- following units. EPA estimates that facilities with intermittent water withdrawals could achieve a 5 to 10 percent reduction in flow. 52 For this reason, mostmany baseload generating units and continuously operated manufacturing processes will obtain minimallimited reductions in flow from using these technologies. EPA is further aware that some facilities may need to withdraw water for cooling even while the facility is not in pr oduction, such as faciliti es on standby status, or nuclear facilities where the heat energy gene rated by fission must sti ll be dissipated while the facility is out of service. As a result, EPA determined that variable frequency drives and variable speed pumps, while useful in sp ecific setting and circumstances, are not BTA candidates because the flow reduction technologies with generalhave limited application and availability , and are not a high performing technology as an entrainment control measure. b. Seasonal Operation or Se asonal Flow Reductions Seasonal operation or seasonal flow reduction refers to the reduction or elimination of a quantity of water withdrawn either during periods of low demand for electricity output, or to co incide with certain biologically important periods. Most facilities that currently employ seasonal flow reductions do so to limit thermal impacts or

52 Withdrawals of colder water could allow facilities to reduce their intake flow using variable drives and pumps, but EPA does not have data on the ef ficacy or availability of this approach.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 154 of 642 to reduce entrainment, because entrainment of ten has a peak season, particularly during a localized spawning season. lo cal spawning season. Freshw ater drum, for example, perform broadcast spawning during early summe r when water temperatures reach about 65 degrees Fahrenheit. During specific peak entrainment periods Impingement is generally more sporadic, less predictable, and more difficult to address with seasonal operation. For example, clupeid species experience impingement episode s sporadically all th roughout the winter and spring. Largemouth bass, on the other hand, can spawn in the late spring, which thus begins a season of potentially high entrainment fo r this species. During this specific peak entrainment period , a facility could scale back its operation (or perh aps not operate at all), thereby reducing or eliminating the volume of cooling water wit hdrawn. This could be accomplished through a combination of variab le speed pumps or shutting down some portion of the pumping system. Seasonal flow re duction could also consist of operating a closed-cycle coolingrecirculating system as defined at § 125.92(c)(1) as once-through during part of the year and as a closed-cycle system during the peak entrainment season. (EPA notes that closed-cycle cooling has been rejected as noted in the previous section, and discussed in more detail below.) Facilities could also choo se to schedule regular maintenance to occur during these high entrainment periods. These maintenance activities often require the facility to redu ce or cease operations and can be timed to coincide with the most biologically productive periods. Through site visits, EPA gathered information on species present at facilitie s and has identified some sites where entrainment appears to be significant a ll year long, and other sites where peak*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 155 of 642 entrainment occurs in as few as th ree to four months of the year. 53 However, if all powergenerating facilities in a local area were to st op operating at the same time, there could be difficulty in supplying electrici ty to the area. Therefore, EPA concluded that seasonal operations have limited nationwide application for controlling entrai nment and are thus not widely available entr ainment reduction technology. Impingement is generally more sporadic, less predictable, and more difficult to address with seasonal operation. For example, clupeid species, such as gizzard shad, experience impingement episodes sporadica lly throughout the wint er and spring during periods of especially cold water temperatur es, or sporadically throughout the summer and fall during periods of low dissolved oxygen.

c. Unit Retirements Some power plants units have been retired and others have essentially ceased all operations but have not been form ally retired or decommissioned. ReasonsThe reasons for their inactivity vary, 54 but the end result is the facil ity no longer needs cooling water withdrawals for these units. Similarly, ma nufacturers may retire processing units as market demand changes, process lines ar e moved to other sites, or production technologies change. Unit clos ures provide clear reductions in flow, but the demand for

53 See DCN 10-6702 and its attachments for examples of spawning “seasons.” 54 Note that some generating units are retired by the owner ( i.e. , the unit is no longer considered sufficiently profitable to operate) or is rarely dispatched by its independent system operator for market-driven reasons (i.e., the unit cannot deliver at a competitive price ). except during limited peak seasons; see also § 125.94(c)(12)). They may also be mothballed, placed on cold storage, or maintained in various other states of operational readiness.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 156 of 642 electricity (or other products) might dictate that pr oduction be increased at the facility in question or at another facility altogether; there is usually no gu arantee that the intake flow will be permanently retired. EPA expects flow reductions due to unit closures could be reasonably included as part of a facility ’s impingement mortality and entrainment reductions strategy. Given the number of variable s involved in the decision to retire a unit and the likelihood of a facility having a unit that is ready to retire at promulgation of the final rule, unit retirements are not a nationa lly available entrainment reduction measure. See Section VIII for further discussion of how a facility can take credit for flow reductions attributable to unit closures. d. Use of Alternate C ooling Water Sources While not reducing the overall usage of wa ter at a facility, using an alternate source of cooling water can re duce impingement and entrainm ent if the alternate source substitutes for withdrawals from surface waters . An example is using “gray” water as a source of cooling water, such as a facility that reaches an agreement with a nearby wastewater treatment plant to accept the wastew ater treatment plant’s effluent as a source of cooling water. 55 Such alternate sources are lim ited by available capacity and consistency of flow. Increasing competition fo r these sources of water may make this a more challenging approach for existing facilities than for new facilities that are not yet

55 See, for example, EPA’s site visit report for PSEG’s Linden Generating Station (DCN 10-6557), which has a capacity of 1230 MW, 35 % percent CUR, and uses 7-8 mgd of gray water as the sole source of makeup water for its cooling towers.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 157 of 642 fixed in location. In principle, alternate sources could be used to fulfill either a fraction or all of a facility’s cooling water demands. In pr actice, the location of alternate sources, the costs of moving water from the alternate source to the facility, and whether the facility uses a once-through or closed-cycle coolingrecirculating system as defined at § 125.92(c) will determine whether the alternate source ca n meet all or a portion of the facility’s cooling water needs. All these factors limit the widespread availa bility of alternate cooling water sources as an entrainment redu ction measure, howeve r use of alternative sources of cooling water such as wastewater treatment effluent could be attractive for certain facilities where the cost of retrofitti ng or other site-specific circumstances are favorable. [NOTE to reviewers: EPA would like to cite here as support for this material the draft DOE report on “U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather” when it is public.] 56
e. Water Reuse Typically associated with manufacturing f acilities, water reuse (defined as using water for multiple processes) can reduce the volume of water needed for cooling, process, or other uses. For example, a facility might withdraw water for non-contact cooling water and then reuse the heated effluent as part of an industrial process. In effect, the facility

56 For maps showing which electric generators are near a source of available reuse water for cooling, see Tidwell, V., J. Macknick, K. Zemlick, J. Sanchez, and T. Woldeyesus. 2013. “Transitioning to Zero Freshwater Withdrawal for Thermoelectric Generation in the United States.” (submitted). See also the accompanying presentation given at the American Geophysical Union Fall 2012 Meeting available at http://www.nrel.gov/docs /fy13osti/57444.pdf.).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 158 of 642 has eliminated the need to withdraw addi tional water for the latter process. EPA has observed significant water re use at manufacturing facili ties but has not developed national level data for such reuse because of the range of different manufacturing sectors and the significant variability in manufactur ing processes appropriate for reuse. For example, during site visits, EPA observed that it may be difficult to quantify specific water reuse at complex facilities. (See, for ex ample, the site visit report for ArcelorMittal, a steel mill at DCN 10-6551.) For additional de tail on water usage in specific industrial sectors, see Chapters 4 and 8 of the TDD. Increasingly, electric utilities are ad opting water reuse to meet a portion or all of their cooling water demands. Water reuse can enhance the reliability of power generation in water-limited environments. Given the complex use (and reuse) patterns for some facilities and the lack of reuse at othe r facilities, water reus e cannot be considered

as a widely available entrai nment reduction option. f. Closed-Cycle Cooling Systems Closed-cycle cooling systems allow a facili ty to transfer its waste heat to the environment using significantly smaller qua ntities of water relative to once-through cooling –, and in some cases no water. The main t ypes of closed-cycle cooling systems are wet cooling, dry cooling, hybrid cooli ng, and impoundments. Each is described below. i. Wet Cooling Systems In a wet cooling system, cooling water that has absorbed waste heat transfers that heat through evaporation of some of th e heated water into the surrounding air and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 159 of 642 recirculates the now cooled water to continue the cooling process. 57 This process enables a facility to reuse the remaining water, ther eby reducing the quantity of water that must be withdrawn from a water bodywaterbody . Because the heat is transferred through evaporation, the amount of water withdrawn from the water source is greatly reduced, though not eliminated completely, because make- up water is required to replace that lost through evaporation and blowdown. 58 The two main types of wet cooling systems are natural draft and mechanical. While we t cooling systems reduce withdrawals significantly relative to once-through systems, they can in crease the consumptive use of water because they rely on evaporati on (which is not returned to the water bodywaterbody ) for heat dissipation. When once-through cooling is used and withdrawals are a significan t portion of the source water bodywaterbody , the return of heated water might contribute to greater evaporation from the water bodywaterbody relative to the water body’swaterbody’s normal evaporation rate. EPA does not have conclusive data on the relative magnitude of th ese effects, but the data do suggest that the relative difference in evaporation is not so great that it will play a major role in determining a cooling system type in mo st watersheds. EPA examined available information on evaporation losses in DCN 12 -[XXX],-6673, including a comparison to

57 In addition, a smaller portion of the heat is also removed through direct contact between the warm water and the cooler surroundings; this is known as sensible heat. 58 Cooling towers must replace water lost to evaporatio n; this is referred to as makeup water. Additionally, as water evaporates, dissolved solids and other mate rials gradually increase in concentration in the circulating water and can cause operational difficulties. To minimize these issues, cooling tower operators continually discharge a small portion of the circula ting flow and replace it with makeup water; this is referred to as blowdown.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 160 of 642 evaporative losses from the downstream efflue nt plume of once-through cooling systems. While EPA recognizes that evaporative loss es from closed-cycle systems are greater, EPA’s analysis does not suggest that the di fference is substantial enough to outweigh the significant reduction in adverse environmenta l impacts to aquatic organisms. However, the relative loss of water th rough evaporation for closed-cycle and once-through systems is site-specific, depending on th e exact design of the systems. There are two common designs for wet cool ing systems. A natural draft cooling tower can be as tall as 500 feet and has a hype rbolic shape. The hei ght of these towers creates a temperature differential between the top and bottom of the tower, which creates a natural chimney effect that transfers heat as heated water contacts ri sing air. In contrast, mechanical cooling towers rely on motorized fans to draw air thr ough the tower and into contact with the heated water. 59 These towers are much shorte r than natural draft cooling towers (typically 30 to 75 feet tall) and can be built in groups. Mechanical cooling towers may require more land area than natural draft co oling towers for an equivalent amount of cooling. Both types of towers require electr icity for pumps, but mechanical draft towers also require electricity to operate the fans. In both cases, th e electricity need of the towers reduces an electric generating facility’s ne t generating output. Thus, the monetary and environmental costs of this reduction in en ergy efficiency must be considered. These

59 Modular cooling tower units provide an additional cooling tower alternative. Modular cooling towers resemble mechanical cooling towers, but are portable, typically rented for short-term periods and quickly assembled.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 161 of 642 environmental costs include human health and welfare effects from increased air emissions (from burning additional fuel to ma ke up for the power that cannot be sold) and the global climate change effects of increased greenhous e gas output at fossil-fueled plants.facilities (these costs ar e now explicitly considered in the benefit-cost analysis; see Section X below). Both natural draft and mechanical cooling towers can operate in freshwater or saltwater environments. Saltw ater applications typically require more make-up water than freshwater applications, making them less efficient in reducing water withdrawals. Optimized cooling towers can achieve flow reductions of 97.5 and 94.9 percent or better for freshwater and saltwater sources, respectively. ii. Dry Cooling Systems Dry cooling systems virtually eliminate the need for cooling water withdrawals. 60 Unlike wet cooling systems, waste heat in dry cooling systems is transferred completely through convection and radiation, rather than ev aporation. Direct dry cooling is much like a car radiator; turbine exhaus t steam passes through tubes or fins for cooling, and the condensate is returned to the boiler to be reheated into st eam to propel the turbine. The system is completely closed to the atmos phere, and there is no contact between the outside air and the steam or the resulting c ondensate. Because of the heavy reliance of

60 Dry cooling systems blow down some of the circulating water in the cooling system to prevent the buildup of materials in the condenser. However, the volume of makeup water is extremely low—a dry cooling system typically reduces intake flows by 98–99 percent over a comparable once-through cooling system.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 162 of 642 dry cooling on ambient air temperatures and th e lower efficiency of heat transfer through convection and radiation, dr y cooling systems are much larger and therefore more expensive 61 than wet cooling systems for a given cooling load. While dry cooling systems are not uncommon in the U.S. (see DCN 10-6943) , they have typically been built at smaller generating units or in areas where limited water supplies might make uncertain the availability of either once-through cooli ng or wet cooling make-up water, such as the arid southwestern United States. Dry cooli ng has not been used for circulating water cooling at nuclear facilities. iii. Hybrid Cooling Systems In certain applications, a f acility could choose a hybrid cooling system design that incorporates elements of both wet and dry cooling. Typically, the base of the tower functions as a wet cooling system and th e upper portion as a dry cooling system. The most common reason for this design is to re duce the visible plume of water vapor, which is accomplished by recapturing some of the wate r vapor evaporated in the wet portion of the tower. This design is also usually much shorter than natural draft wet towers and can also include plume abatement controls. Another version of the hybrid cooling system also includes both wet and dry cooling sections, but th e dry section functions to directly cool a

61 The construction and capital costs for dry cooling towers have been reported as fivefour to 10 times more expensive as wet cooling towers, and the auxiliary power consumption for dry cooling is higher than for wet cooling. See DCN 10-6679. EPA recognizes that costs for dry cooling may have decreased since this document was written, but costs for dry cooling are still markedly higher than those for wet cooling. The other challenges associated with dry cooling remain unchanged.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 163 of 642 portion of the turbine exhaust st eam. The benefits of such a tower may include substantial water savings as well as reducti on in power plant efficiency losses associated with just dry cooling.

iv. Impoundments Impoundments are surface wate rbodies that serve as both a source of cooling water and a heat sink. As with cooling towe rs, impoundments rely on evaporative cooling to dissipate the waste heat; a facility withdraws water from one part of the pondimpoundment and then discharges the heated effluent back to the pondimpoundment , usually in another location to a llow the heated water time to cool. Depending on local hydrology, impoundments may also require makeup water from another waterbody. Impoundments can be man-ma de or natural, and can be offset from other water bodies or as part of a “run of the river” syst em (the latter are sometimes referred to as cooling lakes). As discussed in section V a bove, EPA recognizes that not all impoundments are part of a closed-cycle cooling system. 2. Exclusion and Collection Technologies Over the last several decades, numerous t echnologies in addition to specific flow reduction measures such as velocity contro ls and closed-cycle cooling have been developed in an effort to minimize impinge ment mortality and entrainment associated with cooling water intake systems. The following section summarizes the most widely used technologies and the mo st effective and best-performing technologies, such as screens, barrier nets, aquatic filter barrier s, and collection and return systems. For*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 164 of 642 additional detailed information on these technol ogies and others, also see Chapter 6 of the TDD, “California’s Coastal Power Plants ” report (DCN 10-6964) or EPRI’s “Fish Protection at Cooling Water Intake Structures” report (DCN 10-6813).
a. Screens There are several types of screens that o ffer protection that ar e discussed below, including travellingtraveling screens and cylindrical wedgewi re screens. Not described in this section are fixed screens th at are used simply for the purpose of debris exclusion but do not offer protection to fish, larvae, and eggs. i. Traveling Screens Traveling screens are a technology in place as part of most cooling water intake structures. These screens originally were de signed to prevent debris from entering the cooling water system, but they also prevent some fish and shellfish from entering the cooling water system. Traveling screens have been installed in a wide variety of operating and environmental conditions: salt water, brackish water, freshwater, and icy water, as well as river, lake and tidal applications. On the basis of the technical survey, EPA found 93 percent of electri c generators and 73 percen t of manufacturers employ traveling water screens or other intake scre ens. Many types of traveling water screens (e.g., through flow, dual flow, center flow) are used. The most common design in the United States is the through flow system. The sc reens are installed behind bar racks (trash racks) but in front of the water circulation pumps. The screens rotate up and, while out of the water, debris and impinged organisms ar e removed from the screen surface by a highpressure spray wash. Screen wash cycles ar e triggered either manually or by a certain*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 165 of 642 level of head loss across the screen (indi cating clogging). By definition, this technology works by collecting (i.e., impinging) fish a nd shellfish on the scr een. Ideally, traveling screens would be used with a fish handling and return system, as discussed below. The return system should be regularly maintained to prevent biofouling or other blockages that may affect survival. ii. Cylindrical Wedgewire Screens Unlike traveling screens, cylindrical we dgewire screens are a passive intake system. Wedgewire screens, also called “V ” screens or profile screens, consist of triangular-shaped wires arrayed on a cylindrical framing syst em, with long slots between the wires, lengthwise along the screen. Slot sizes for conventional traveling screens typically refer to a square opening (3/8 in ch by 3/8 inch) that is punched, molded, or woven into the screen face. Wedgewire screen s are constructed differently, however, with the slot size referring to the distance be tween longitudinally adjacent wires. These screens are designed to have a low through-sl ot velocity (less than 0.5 fps or 0.15 meter per second) and typically have smaller slot si zes than a coarse mesh traveling screen. The entire wedgewire structure is submerged in the source water bodywaterbody . (See Chapter 6 of the TDD for an illustration of these screens.) When necessary conditions regarding placement in the water bodywaterbody are met, these screens exploit physical and hydraulic exclusion mechanisms to achieve consistently high impingement reductions, and as a result, impingement mortality reductions. Wedgewire screens require an am bient crossflow current to maximize the sweeping velocity provided by the water bodywaterbody . The screen orientation allows*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 166 of 642 the crossflow to carry organisms away from th e screen allowing them to avoid or escape the intake. Lower intake velocities also allow fish to escape from the screen face. Entrainment reductions can also be observed when the screen slot size is small enough and intake velocity is low enough to exclude egg and larval life stages. 62 Limited evidence also suggests that extremely low inta ke velocities can allow some egg and larval life stages to avoid the intake because of hydrodynamic influences of the crossflow. Therefore, performance is dictated largely by local conditions that are further dependent on the source water body’swaterbody’s biological composition. Costs of wedgewire screens increase significantly as slot size and design intake ve locity decrease because the cumulative size of the screen (or number of screens) must grow in order to accommodate the same flow of cooling water. Wedgewire screens can also employ cleaning and deicing systems such as air-burst sparging to help ma intain open intake structures and low intake velocities. According to data from the industry ques tionnaire, EPA’s site visits, and industry documents, dozens of facilities across the United States employ cylindrical wedgewire screens. However, wedgewire screens are not fe asible for all facilities, particularly where intakes are in shallow water or have limited shoreline frontage. Also, wedgewire screens might not be feasible where the size and number of wedgewire screens would interfere with navigation of vessels. As described above, locations also need to have an adequate

62 Note that this is entrainment exclusion and not necessarily related to the survival of entrainable organisms.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 167 of 642 source water sweeping velocity. Most of the performance data for wedgewire screens is based on coarse mesh slot sizes with an intake velocity of 0.5 fps. Because it is extremely difficult to measure impingement and entr ainment reductions in the field, most performance data for wedgewire screen s is based on barge and lab studies. 63 EPA does not have data on the performance of fine mesh wedgewire screens on entrainment survival. Consequently, EPA has considered wedgewire screens only for impingement mortality. For additional discussion of the specific design and operation of cylindrical wedgewire screens, see Chapter 6 of the TDD. The following section discusses the importance of mesh size to impingement mortality and entrainment reductions. iii. Screen Mesh Size Considerations Coarse Mesh Coarse mesh traveling screens are the typical traveling screen fitted on the majority of cooling water intakes. A large num ber of facilities have intake screens with 3/8-inch (9.5 mm) mesh panels. 64 This size mesh is common because, as a general rule, the maximum screen slot size is never larger than one-half of the condenser tube diameter (the condenser tubing is the na rrowest point in the cooling wa ter system and, as such, is most susceptible to clogging from debris), and this tubing is typically 3/4 or 7/8 inch in

63 EPA expects that properly designed wedgewire screens have a design intake velocity of 0.5 fps, therefore intakes with wedgewire screens will meet the impingement standard at § 125.94(c)(2) and there is no need to separately “ pre-approve ” this technology likeas in the remanded 2004 Phase II rule. 64 In today’s rule the EPA recognizes that 1⁄2 by 1⁄4 inch mesh is used in some instances and perform comparably to the 3/8 inch square mesh.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 168 of 642 diameter. Mesh of 3/8-inch (roughly 9.5 mm ) size does not prevent entrainment and without any other precautions can lead to hi gh mortality of impinged fish. Coarse mesh traveling screens have been in use by both pow er plants and manufact urers for more than 75 years and represent the baseline technol ogy. Similarly, the majority of successful wedgewire installations are coarse mesh. Fine Mesh Fine mesh traveling and wedgewire screen s are similar to coarse mesh screens. The only difference is the size of the screen me sh. Fine mesh traveling screens have been in use since the 1980s. Typically, facilities have incorporated fi ne mesh in an effort to reduce entrainment. The mesh size varies, depending on the organisms to be protected, but typically range from 0.5 to 5 mm. Data in the record demonstrate that entrainment typically decreases as mesh size decreases. Sl ot sizes larger than 2 mm do not prevent eggs from passing through the screen. Convertin g traveling screens from coarse mesh to fine mesh often requires adding more screens in order to maintain the same flow, since the open area of a fine mesh screen is less than the open area of a coarse mesh screen. Adding more screens is one way to maintain that flow. 65 EPA estimates that as many as 17 percent of existing intakes could not be enlarged to accommodate a 2 mm mesh, and as many as 55 percent of existing intakes could not accommodate a 0.5 mm slot size under conditions of low-intake velocities. Fo r these reasons, fine mesh screens are

65 A facility could also increase its intake velocity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 169 of 642 available for some locations, but they are not the best performi ng technology and are not an available technology for the industry as a whole for IM&E. For more details, see Chapter 6 of the TDD. b. Barrier Nets Barrier nets are nets that fully encircle the intake area of wa ter withdrawal, from the bottom of the water column to the surface, and prevent fish and shellfish from coming in contact with the intake structure and sc reens. According to data from the industry questionnaire (as of the year 2000), at least a half dozen faci lities employ a barrier net. Typically, barrier nets have large me sh sizes (e.g., 1/2-inch or 12.7 mm) 66 and are designed to prevent impingement. Because of th e large mesh size, th ey offer no reduction in entrainment. They are often deployed s easonally, wherever seasonal migrations create high impingement events or to avoid harsh wi nter conditions that je opardize integrity of the net. Barrier nets also pr event impingement of shellfish on the intake traveling screen. Shellfish such as crustaceans can pose a unique issue for traveling screens; shellfish are not impinged, but they can attach to the tr aveling screen surface and are not removed from the traveling screen by pressure wash sp rays. Barrier nets have been shown to be helpful in this regard. c. Aquatic Filter Barriers

66 Barrier net mesh sizes vary, depending on the configuration, level of debris loading, species to be protected, and other factors.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 170 of 642 Aquatic Filter Barriers (AFBs) consist of water-permeable fabric panels with small pores (less than 20 microns). They are similar to barrier nets in that they extend throughout the area of water withdrawal from the bottom of the water column to the surface. AFBs reduce both impingement morta lity and entrainment because they present a physical barrier to all life stages. The surf ace area of an AFB is quite large compared to a traveling screen, allowing for extremely low water velocities. The low velocity allows non-motile organisms to drift away. EPA is aw are of one power plant that used an AFB but notes that this facility recently ceased operations. 67 EPA has updated performance data for AFB for small flow intakes, but it does not have enough data to evaluate the technology at large intakes or in all water bodies. EPA does not consider this technology to be demonstrated and availabl e as a nationwide BTA candidate. d. Collection and Return Systems Conventional traveling screens were not de signed initially with the intention of protecting fish and aquatic organisms that become impinged against them. The organisms were often handled in the same manner as de bris on the screens. Marine life can become impinged against the screens because of high in take velocities that prevent their escape. Prolonged contact with the screens can suffocat e organisms that are unable to escape or result in descaling injury a nd latent mortality. Organisms th at survive initial impingement and removal are not always provided with a specifically designed mechanism to return

67 This facility ceased op erations for reasons other thanunrelated to any requirements or measures addressing cooling water intake impingement andor entrainment related to cooling water intake

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 171 of 642 them to the water bodywaterbody and are often handled in the same way as other screening debris. Other objects, such as leaves and trash, that are collected on the screen are typically removed with a high-pressure sp ray and deposited in a dumpster or debris return trough for disposal. Exposure to high pr essure sprays and other screening debris can cause significant injuries that result in late nt mortality or increase the susceptibility to predation or re-impingement. Screens are rota ted periodically on a se t time interval or when the pressure differential between the upstream and downstream faces exceeds a set value. Conventional traveling screen system s have been modified to reduce impingement-related mortalities with collection and return systems. In its simplest form, these systems are composed of a return flume or trough with sufficient water volume and flow to enable impinged organisms to return to the source water. Return systems should be designed to avoid predati on and latent mortality while organisms are in the flume, maintain an appropriate water depth in the flume for high survival of the organisms, located at an appropriate elevation to avoi d large drops of the or ganisms back to the surface water (or large hydraulic jumps if th e end of the return is below the water’s surface), and sited to avoid repeated impi ngement of the organisms by the intake

structure. Some facilities have modified conventiona l coarse mesh traveling screen systems to reduce impingement mortality. They did this by removing fish trapped against the screen and returning them to the receiving water with as few injuries as possible. The first modified screens, also known as Ristr oph screens, feature capture and release*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 172 of 642 modifications. In the simplest sense, these scr eens are fitted with troughs (also referred to as buckets) containing water that catch the organisms as the screen rises out of the water and the organisms are sprayed off of the sc reen. The return component consists of amechanism to remove impinged fish gently from the collection buckets, such as a lowpressure spray. The buckets empty into a coll ection trough that returns fish to a suitable area in the source water bodywaterbody . These modified screens have shown significant reductions in impingement mortality comp ared with unmodified screen systems. Data from early applications of the Ri stroph screen design showed that while initial survival rates might be high at some installations, latent mortality rates were higher than anticipated. This indicat ed that organisms could sust ain significant injuries during the impingement and return process that were not immediately fatal. According to a study conducted by Ian Fletcher in the 1990s (see DCN 5-4387), industry identified several additional critical screen modifications to address latent mortality. These included redesigning the collection buckets to minimize turbulence, addi ng a fish guard rail/barrier to prevent fish from escaping the collection bucket, replacing screen panel materials with “fish-friendly,” smooth woven mesh, and usi ng a low-pressure wash to remove fish before any high-pressure spray to remove de bris. The Fletcher analysis also identified longer impingement duration, insufficient water retention in the buckets, and exposure to the air and temperature extremes as conditions that could negatively affect fish survival. Finally, these findings indicate th at modified Ristroph screens must be rotated continually instead of the periodic rotation schedule common with conventional screen systems. Performance data for modified traveling screen s with fish-friendly fish return systems,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 173 of 642 sometimes referred to as post-Fletcher modi fications, show low levels of impingement mortality across a wide variety of water body types and fish sp ecies. Therefore, EPA has concluded that modified traveli ng screens with a fish-friendly fi sh return system is a best technology available for impingement mortality. waterbody types and fish species. Additionally, recently developed screen designs (such as the Passavant Geiger, Beaudrey WI P, and Hydrolox screens) have also shown promise in reducing impingement mortality. For additional and more detailed disc ussion of the specific design and operation of these screen modifications , see Chapter 6 of the TDD. 3. Other Technological Approaches a. Intake Location and Velocity Caps The most common intake location for a c ooling water intake structure is along a shoreline. In some water bodies, however, shoreline locations are thought to have a potential for greater environmental impact becau se the water is withdrawn from the most biologically productive waters, especially those containing a high density of organisms in earlier life stages, such as nursery areas. Some facilities employ an offshore intake to withdraw water from less biologically pr oductive areas to reduce impingement and entrainment relative to intakes in more productive shoreline areas. Reduction in impingement mortality and entrainment due to intake location is highly site-specific. The greatest potential for reducti ons is found with far offshore locations at distances of several hundred feet, not found on many rivers and streams. Both depth and the offshore location must be evaluated to determine whet her fish densities a nd species distribution*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 174 of 642 there are substantially different than thos e near the shoreline. Two areas where far offshore locations are commonly used today are the oceans and Great Lakes. EPA found that several offshore intake s are fitted with a velocity cap. 68 Velocity caps are a physical structure rising vertically from the sea bottom and are placed over the top of an intake pipe. Intake water is wit hdrawn through openings in the velocity cap so that it converts the direction of water flow into the pipe fr om vertical to horizontal. The velocity cap does not act to reduce the velocity, 69 but the horizontal flow provides a physiological trigger in fi sh, which induces an avoi dance response to reduce impingement mortality. The velocity cap further serves to limit the zone of influence of the intake to the depth level at which the velocity cap is situated, thus affecting only the life stages that live at that depth. Velocity caps are also usually equipped with supports and bar spacing selected to prevent larger aq uatic organisms (e.g., sea turtles or marine mammals) from entering the intake pipe. B ecause velocity caps operate under the principle that the organisms can escape th e current, they do not offer entrainment reductions over and above those achieved by being located offshore. Reductions in entrainment observed with velocity caps o ccur because of the difference in organism densities in far offshore deep water compar ed to a surface intake at the shoreline.

68 Others can be fitted with a cylindrical wedgewi re screen, or might simply be an open pipe. 69 EPA’s data show that velocity caps operate at velo cities above and below the 0.5 fps and can be effective using either design.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 175 of 642 Far offshore velocity caps have limited a pplication in oceans and the Great Lakes, are not available in other wate r bodies, and are therefore not av ailable as a candidate for a national BTA. However, the technology is a demonstrated high performing technology, and is therefore included as a compliance alternative for those facilities where the technology is available. For additional and more detailed discussion of the specific design and operation of offshore intake locati ons and velocity caps, see Chapter 6 of the
TDD. b. Reduced Intake Velocity Impingement mortality can be reduced greatly by reducing the through-screen velocity in any screen. 70 Reducing the rate of flow of cooling water through the screen (through-screen velocity) to 0.5 fps or less redu ces impingement of most fish because it allows them to escape the intake current. (See 66 FR 65274 [December 18, 2001] and DCN 2-028A, EPRI’s “Technical Evaluation of the Utility of Intake Approach Velocity as an Indicator of Potential Adverse E nvironmental Impact Under Clean Water Act 316(b).”) As a result, some facilities have de signed and operate their modified traveling screens or wedgewire screens so as not to exceed a through-screen velocity of 0.5 fps. Swim speed studies demonstrate that for most facilities, an intake velocity of 0.5 fps or

70 Limited lab studies indicate that entrainment also can decrease as th rough-screen velocity decreases and that through-screen velocity can ha ve an effect on entrainment surviv al rates, although such data is extremely variable by sp ecies (see DCN 10-6802 and DCN10DCN 10 -6803). In any case, EPA does not consider a reduced intake velocity as an effective technology for reduci ng entrainment, because entrainable organisms generally lack motility.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 176 of 642 less will result in 96 percent or better re ductions in impingement mortality for most species. EPA notes that preliminary results from recent studies of fine mesh screens suggest that at even lower intake velo cities such as 0.25 fps, some hydrodynamic influences may reduce entrainment mortalit y even more, because flow dynamics are nonlinear. It is unclear as to whether such observations hold true when cooling water withdrawals (water volumes) are large. Therefore, EPA has concluded that reduced intake velocity is a best performing tec hnology for impingement mortality.While higher intake velocities are sufficiently protective for some species of fish, the higher intake velocities are not necessarily protective of all lif e-stages. For example, younger fish may not be strong swimmers or may have not a developed avoidance response. Therefore higher intake velocities are not a high performing technol ogy. As noted previously, low intake velocity has limited application, and is therefore not availabl e as a candidate BTA technology. However, the technology is a demonstrated high performing technology, and is therefore included as a compliance alternat ive for those facilitie s where the technology is available. CD . Technology Basis for Today’s Final Rule As described above, EPA examined the full range of technologies that reduce impingement or entrainment or both , and evaluated these technologies on the basis of their efficacy in reducing impingement and en trainment, and their availability, which includes feasibility and cost.. From an assessment of theseall factors, EPA identified twoone technology that is best performing technologies as th e basis for today’s final ruletechnology available for minimizing the a dverse impacts of impingement mortality at*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 177 of 642 existing facilities : modified traveling screens with a fish-friendly fish return . EPA identified no single best technology that is available for impingementminimizing entrainment at existing facilities andfor today’s final rule. For new units at existing facilities, EPA identified mechanical draft wet cooling systemsystems as BTA for both impingement and entrainment at new units

. 71 EPA did not identify any single techno logy or group of technology controls that it concluded were available and feasible as the basis for establishing the national performanceBTA standard for entrainment . for existing units. Instead, EPA’s EPA has established a national BTA entrainment standard puts in place a framework for establishingfor entrainment for existing units that requires determination of BTA entrainment requirements on a site-specific basis . in a structured permitting setting. The framework includes thefor determining entrainm ent requirements provides for the consideration at a minimum of certain specified factors that must be considered in the Director’s determination of the appropriate BTA controls as well as the standard for determining when an otherwise affordable co ntrol technology may be rejected as the basis for the BTA standard. As described belo w, other technologies are demonstrated, but they are neither the best performing nor av ailable technologies for the industry as a whole..

71 Although EPA also identified velocity reduction to 0.5 feet per second or less as a candidate best performing technology for impingement mortality, EPA did not promulgate requirements to reduce intake velocity as BTA because it is not available at all f acilities; however, the final rule does allow facilities to comply with intake velocity of 0.5 f eet per second or less where available.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 178 of 642 1. 1. Alternative Impingement Mortality Standards for Existing FacilitiesUnits After considering all f actors identified above, EPA has concluded that modified traveling screens, such as modified Ristr oph screens and equivalent modified traveling screens with fish-friendly fish returns, are a best performing technology available for minimizing impingement mortality. 72 These screens use 3/8 inch, or similar, mesh with collection buckets designed to minimize turbul ence, a fish guard rail /barrier to prevent fish from escaping the collection bucket; “f ish-friendly,” smooth, woven or synthetic mesh; and a low-pressure wash to remove fish before any high-pressure spray to remove debris. The fish removal spray must be of lowe r pressure, and the fish return must be fish friendly, provide sufficient water and minimi ze turbulence. Modified traveling screens generally must be rotated con tinually to minimize aquatic ex posure to impingement or to the air and thus obtain the highest re ductions in impingement mortality. Under the seventh compliance option for complying with the BTA impingement mortality standard in today’s final rule, a facility may chooserely on any technology and then must conductit chooses so long as it demonstrates through biological compliance monitoring to demonstrate the annual average lim it is achieved.that it achieves the required 12 month impingement mortality performance standard 73 that EPA calculated

72 EPA also considered recent screen designs (such as the Passavant Geiger, Beaudrey WIP, and Hydrolox screens) in evaluating impingement mortality data. In fact, the data set used to calculate the revised impingement mortality limitperformance standard at § 125.94(c)(7) included a study of performance at a facility employing a Passavant Geiger screen, as we ll as a facility employing a Beaudrey WIP screen. 73 In the record, EPA may also refer to this as the 12-month percent survival performance standard, % SPS, or the IM performance standard.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 179 of 642 based on the performance of the BTA technolog y – modified traveling screens with fish

return. As discussed in the TDD (see, for ex ample, TDD Exhibits 11-1 and 11-3), EPA based the annual average limit12 month pe rcent mortality performance at § 125.94(c )(7 ) on data from facilities with traveling screens modified with features to improve the postimpingement survival of organisms such as smooth mesh, continuous or near-continuous rotation of the screens, buckets with guard rails, low pressure sprays for collecting fish, and fish return systems. The statistical basis for the annual limit includes 26 annual averages12 month impingement mortality perf ormance standard includes 26 sets of 12 month survival percentages across 17 facilities demons trating average impingement mortality rates ranging from 1.6 to 48.8 percen t under conditions of 18 to 96 hour holding times. 74 EPA established the annual average limitation12 month percent mortality as 2524 percent which is the arithmetic average of the impingement mortality rates from the 17 facilities. (This is consiste nt with EPA’s proposed rule us e of expected value of the beta distribution which can be calcu lated as the arithmetic average.) Note: The 12 month impingement mortality performance standard means that no more than 24 percent of the impinged fish may die or alternatively at least 76 percent of the impinged fish must survive. EPA has occasionally used average annual limitations in the effluent guidelines

74 In the Roseton study, one of the dual flow screens (Screen 2D) that was tested in 1990 failed due to a high water level differential. The replacement screen wa s another modified dual flow screen with the same orientation, but with unspecified modifications. A 1994 study showed these modifications resulted in reduced impingement impacts via reduction in the number of fish impinged and better survival of impinged organisms. EPA did not exclude the 1990 study from the annual averag e limit calculation because the study met all specific criteria. See TDD Chapter 11 for further information.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 180 of 642 program, most recently for the pulp a nd paper industry category (40 CFR 430, promulgated in 1998). In suchthese instances , such as the technology-based BAT , EPA has defined the annual average limitations to be the average level demonstrated by the technology. Thus, EPA’s appr oach to calculating the annual12 month percent survival performance standard for impingement mortality is consistent with past practice. EPA recognizes that variability in th e technology performance occurs due to changes in seasons, differing intake locations , higher mortality of certain species, and speciation found in different water bodies. By using a full 12 months of data, EPA has ensured that the resulting performance sta ndard reflects the wide st range of potential conditions present in EPA’s database. EPA has further incorporated variability into the annual average limitation12 month impinge ment mortality performance standard by basing its limitationit on data from 17 facilities which collectively performed more than 1,500 sampling events beginning as early as 1977. EPA notes that seven facilities had mortality rates less than 10 per cent which provides evidence th at facilities can, and have, maintained and operated their systems in a manner consistent with the limit.performance standard. Another four facilities demonstrated impingement mo rtality rates significantly greater than the limitperformance standard of 2524 percent, however, EPA notes these facilities were not required to optimize thei r technology performance as part of their*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 181 of 642 study, and data collection was not required to achieve a ce rtain level of performance. 75 In each study, EPA has identified elements of the technology operation that a facility could modify to achieve the annual average limitation.12 month percent impingement mortality performance standard. By using the average annual12 month percent impingement mortality performance standard , EPA has ensured that the resulting limitationperformance standard reflects the widest range of potential conditions present in EPA’s database. In addition to those studi es meeting the criteria for use in the annual average limitation12 month percent survival performance standard calculations, there are further studies in EPA’s record that pr ovide additional performance data showing facilities can, and have, mainta ined and operated their system s in a manner consistent with the limit.performance standard. EPA’s record includes approximately 250 total studies related to impingement (see TDD Exhibit 11A-1). EPA recognizes that variability occurs due to changes in seasons, differing intake locations, higher mortality of certain speci es, and speciation found in different water bodies. EPA has incorporated variability into the annual average limitation by basing its limitation on data from 17 facilities whic h collectively performed more than 1,500 sampling events beginning as early as 1977. By using the average annual performance,

75 For example, the Indian Point study states “Because of the prelimin ary nature of this study, the effectiveness of the continuously operating fine mesh tr aveling screen has not been fully evaluated. Further studies incorporating controls for survival testing, re gulation of spray wash pressures, collection efficiency tests, sampling during peak impingement periods for all important species, and better holding facilities, will provide more conclusive results.”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 182 of 642 EPA has ensured that the resulting limitati on reflects the widest range of potential conditions present in EPA’s database. EPA not es that four facilities demonstrated impingement mortality rates of less than 10 percent which is well below the limit of 25 percent. Another seven facili ties had rates between 10 and 25 percent which provides additional evidence that facili ties can, and have, maintained and operated their systems in a manner consistent with the limit. Despite the overwhelming evidence that the annual average limit of 2512 month percent survival perfor mance standard of 24 percent was consistent with demonstrated performance for the best technology, EPA cons idered other alternatives that might incorporate more variability into a limit.performance standard. EPA concluded that none of the alternatives were consistent with the need for facilities to demonstrate ongoing maintenance and operations over a long period of time, such as a ye ar. Any alternative would be less stringent and would allow fac ilities to target long-term performance at a level that would be less than the optimal perf ormance demonstrated by facilities with the technology in place. However, as part of this evalua tion, EPA determined that the annual average limit would beFurther, the 12 -month average impingement mortality performance standard will require a facility to actively evaluate performance during the 12 month period enabling the faci lity to optimize the technol ogy to improve performance to counterbalance a result above the standa rd by one below the standard. If EPA had included a monthly average st andard, it would have similarly needed to incorporate allowances for exceedances. Allowing for exceedances would have provided no incentive for improving operations for such exceedances. Therefore, EPA determined that the 12*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 183 of 642 month impingement mortality performance standard is sufficient to ensure performance consistent with best technology available. For this reason, EPA is not promulgating the monthly average limit that was included in the proposal. EPA’s decision also is consistent with effluent guidelines where compliance with the monthly average limitation is not required for facilities subject to a longer term limitations such as an annual average limitation (e.g., pulp and paper 40 CF R 430 Subpart B AOX limitation).
EPA also dropped several proposed did not incl ude in the final rule a number of requirements . it had considered at proposal. The proposed rule would have required the seasonal deployment of barrier ne ts on estuaries and oceans as one element of the best performing technology available for minimizing the impingement mortality of shellfish (crustaceans). EPA has opted not to include a ny specific requirements for shellfish in the final rule, because EPA’s review of th e impingement data it used to develop the today’s final rule impingement performance standard showed that ampleincludes data were available to that incorporate shellfish survival as part of the impingementperformance standard. Further, as previous ly explained, the final rule pr ovides for the Director to establish additional requirements where necessary. EPA expects facilities complying with § 125.94(c) of today’s rule by compliance option (7) to track thei r compliance with the annual average12 month percent impingement mortality performance standard on an ongoing ba sis and to proactively modify their technology or operations when a trend in the sampling suggests that they might be in danger of exceeding the annual average12 month percent impingement mortality performance standard in the future. The annual average12 month percent*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 184 of 642 impingement mortality performance standard requires that impingement mortality not exceed 2524 percent, calculated as the sum total nu mber of fish that were impinged and died within the holding time divided by the sum total number of fish impinged for a 12- month period. EPA expects the ratio will be calculated based either on direct sampling counts, or based on both counts being extrapolated to represent annual counts. Because comments provided data that expanding the proposed 24 to 48 hour holding time requirement would generally not affect the observ ation of mortality due to impingement, the regulation allows for holding times from 18 to 96 hours. As explained in more detail in sectionSection VI.E and G below, the BTA technology for impingement does not minimize adverse environmental impacts associated with entrainment. 2. Entrainment Standards for Existing Units As discussed below, EPA is not basing BT A for entrainment at existing units (that is, excluding new units at existing facilities) on a single technology such as closed-cycle recirculating cooling systems, the best performinga highly effective technology, because this technology is not available nationally . Although EPA’s record shows numerous instances of existing units that have perfor med a retrofit to closed-cycle, EPA has and therefore does not identified it asrepresent BTA. EPA also has not identified any other effective, available and demonstrated candidate technology (or combinations of technologies) for entrainment reduction at existing units that is availa ble nationally. For other entrainment technologies that might be available on a site-specific basis, see sectionSection VI.E.2 below and chapterChapter 6 of the TDD. EPA did not select the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 185 of 642 other flow-reduction technologies (such as variable-speed drives and seasonal flow reductions) as the technology basis for entr ainment control measures because these technologies are not uniformly best and are not broadly available for most facilities. Further, EPA has not identified a basis for s ubcategorizing existing units at which flow reduction technologies are feasible. The effectiveness, availability , and utility to a given facility of flow reduction or other entrainment reduction methods depends on site-specific geographical and biological conditions as well as operations of the facility. For example, this is the reason that EPA did not select relocation of a shore line intake to far offshore as a technology basis for the BTA entrainment standard because this technology is not widely available for most facilities. 3. Impingement and Entrainment Standards for New Units at Existing Facilities In contrast to existing units, installing a closed-cycle cooling system at a new unit is far less complex. The technol ogy is also highly effective, as generally achieving greater than 95 percent re ductions in IM and E ( mechanical draft (wet) cooling towers achieve flow reductions of 97.5 percent for freshwater and 94.9 pe rcent for saltwater

sources , orby operating the towers at a minimum of 3.0 and 1.5 COCcycles-ofconcentration , respectively .). These reductions in flow ( and the concurrent reductions in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 186 of 642 impingement and entrainment impacts ) are among the highest reductions in adverse environmental impact possible at an intake structure. 76 As described below, EPA has concluded th at new units, in contrast to existing units, have much greater flexibility in te rms of cooling system design, construction scheduling, and other factors th at help minimize many of the negative aspect s associated with closed-cycle cooling. For a more detaile d discussion of this rationale, see below. On the basis of the high levels (greater than 95 percent on average) of flow reduction obtained by optimizedUnder the final rule, a new unit at an existing facility, where the facility that withdraws or will w ithdraw more than 2 mgd when the new unit begins operating will have requirements simila r to the requirements of a new facility in Phase I. Under the rule, a new unit (as de fined at § 125.92(u) and described above) is required to have a flow limited to that which is commensurate with a closed-cycle recirculating system as it would be applie d to the new unit. Today’s final rule also includes an alternative approach (similar to Track II in Ph ase I), in which a facility could comply with the new unit standards by demonstrating that the technologies and operational measures employed will reduce th e level of adverse environmental impact from any cooling water intake structure used to supply cooling water to the new unit to a

76 Note that these metrics are not explicit requirements for closed-cycle recirculating systems. They simply represent what EPA views as examples of characteris tics of a properly operated and maintained closedcycle coolingrecirculating system ., as defined at § 125.92(c)(1).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 187 of 642 comparable level to that achievable by impl ementing a closed-cycle recirculating system as defined at § 125.92(c)(1). As discussed above, today’s final rule defi nes a “new unit” at an existing facility as a stand-alone unit the construction of wh ich commences after the effective date of today’s final rule. New unit in cludes stand-alone units that are added to a facility for purposes of the same general industrial operati on as the existing f acility. This is in contrast to the definition of new facility, where a new facility does not include new units that are added to a facility for purposes of the same general industrial activity (40 CFR 125.83). The provision “for purposes of the same general industrial operation” is explicitly included in today’s final rule defi nition of new unit at an existing facility for clarity. A new unit may have its own dedicated cooling water in take structure, or the new unit may use an existing or modified cooli ng water intake structure. Any unit at an existing facility that does not meet the new unit definition in today’s rule is subject to the existing unit provisions. EPA is adopting more stringent requireme nts for new units at existing facilities because such new units can be designed and constructed without many of the additional expenses and operational disadvantages associated with retrofitting an existing unit to closed-cycle cooling. For example, the incremental downtim e that can be associated with retrofitting to closed-cycle cooling is avoide d altogether at a new unit. In addition, when new units are added, the condensers can be c onfigured for closed-cycle, reducing energy requirements (by substantially reducing the turbin e backpressure energy penalty) and associated air emissions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 188 of 642 The three factors that led EP A to reject closed-cycle cooling as BTA (described below in Section E) are far less relevant fo r new units at existing facilities than for retrofitting existing units. This section discusses why EPA concluded that each factor is not a significant concern for new units, and why the record supports EPA’s conclusion that closed-cycle cooling is an available and feasible tec hnology for new units at existing facilities.

 Land Availability: In contrast to retrof itting the entire existing facility, the amount of space dedicated to closed-cycle for the new unit will be limited to the new unit rather than the entire facility. As a result, space constraints will be much less of an issue. New units also present the opportuni ty to design an optim ized closed-cycle recirculating system for the new unit. Retrofitting an existing facility for the full intake flow of the facility would require a facility to identify (or possibly obtain) enough space to accommodate the cooling towers and associated equipment. Furthermore, new units and their corre sponding cooling system can be built in stages rather than as a facility-wide re trofit, and since the new unit has not yet been built, there is no energy reliability concern (discussed further below).

 Air Emissions: EPA expects that emissions are significantly less of a concern at new units. The condensers will be optimized for closed-cycle, reducing energy requirements, and high-efficiency cooling towers can be incorporated into the design of the new unit, potentially allo wing for smaller cooling towers to be installed. Turbine backpre ssure and the associated energy penalty can be substantially reduced in a new unit, but EPA acknowledges new units will still*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 189 of 642 have auxiliary power consumption for fans. Therefore energy penalties and air emissions for tower operations can be minimized (though not eliminated). The emissions effects of requiring closed-cycle cooling at new units at existing facilities is similar to the effects of this requirement at new facilities and will not pose an unacceptable impact. For more information, see Chapters 6, 8, and 10 of the TDD. Further, the new unit is likely to be more efficient and emit less pollution than existing units, therefore net emissions are expected to decrease as new units replace older, less efficient units.

 Remaining Useful Plant Life: This is clearly not an issue for new units. A new unit has its full useful life remaining and thus would experience the maximum possible reductions in adverse environmen tal impacts throughout that useful life.

EPA does not expect that the requirement s for new units at existing facilities will be a disincentive for facilities to repower ex isting units. The requirements only apply to stand-alone units. Requirements for entrai nment at repowered units will thus be determined by the Director. EPA notes, however, for facilities that do choose to repower an existing unit, the costs of employing a closed -cycle cooling system are not a barrier, as described above. In fact, some facilities may find clos ed-cycle cooling to be less costly over the long-term. For example, in locations with limited water resources such that once-through cooling of an a dditional unit is not possible, overall reliability will be increased by using closed-cycle cooling systems.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 190 of 642 EPA also recognizes that installing closed -cycle cooling systems at new units is a prevailing trend in industry, re gardless of the regulatory re quirements imposed by today’s final rule. For example, see DCN 12-6672 in the record for toda y’s rule, and DCNs 2-009 and 4-4023C (from the Phase I and Phase II dockets, respectively ). These documents show that, on the basis of responses from facilities to the 316(b) industry questionnaire, facilities constructed in recent years are significantly more likely to employ closed-cycle cooling. EPA recognizes that at some point in the future, every unit will be rebuilt, replaced or repowered (or retired). EPA projects that approximately 227 MW in new generating capacity per year, will be subj ect to the new unit provision, reflecting the general industry trend towards more efficient units. EPA’s anal ysis projects an equivalent number of new units at manufacturing fac ilities will be construc ted each year. See the Phase I rule for more information regarding th e affordability and barrier to entry analysis for new construction. EPA notes that the new unit provision is an important element of the final rule, given the generally long lifespan of equipmen t at industrial facil ities. For example, generating units at a power pl ant are often projected to ha ve a 50-year lifespan. As a result, these facilities have a slow rate of “evolution” in adopting newer technologies. By requiring closed-cycle cooling in new units, EP A is ensuring (along with the Phase I rule) that no new once-through cooling units or facilities will be built.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 191 of 642 E. Option Selection After considering all fact ors identified above, EPA ha s concluded that it should base the BTA impingement mortality standard for existing units on the performance of traveling screens (e.g., modified Ristroph sc reens and equivalent modified traveling screens with fish-friendly fish returns) – the “best technology available” for minimizing impingement mortality. While there are a num ber of technologies that may perform as well as or better than traveling screens, thes e technologies were not feasible or available on a nationwide basis and thus were not the “best technology available” for standard setting purposes. Moreover, the impingeme nt mortality standard for existing units provides a number of alternatives, includi ng some of these other technologies, for compliance with the standard. EPA based the BTA impingement mortality standard for existing units on the performance of traveli ng screens because EPA concluded that this technology is effective, wide ly available, feasible, 77 and does not lead to unacceptable non-water quality impacts. As explained above, EPA has not identif ied a technology or combinations of technologies that EPA concluded is “b est technology available” for minimizing entrainment at existing units. EPA did not identify a technology fo r reducing entrainment that is effective, widely available, feasible, and does not lead to unacceptable non-water

77 As part of the feasibility determination, EPA found that the costs associated with the IM standards are reasonable for the industry as a whole.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 192 of 642 quality impacts. As such, EPA is unable to identify a nationally applicable BTA technology on which to base th e BTA entrainment standard. While EPA concluded that closed-cycle recirculating systems reduce entrainment (and impingement mortality) to the greatest extent and are the most effective performing technology, after careful consider ation of multiple factors, EPA concluded that a closedcycle recirculating system is not the “best technology availa ble” for existing units within the meaning of the statute. It is not the best technology available on a national basis for minimizing adverse environmental impact and s hould not form the sole basis for the BTA standard for entrainment for the reasons explained below. EPA also determined that there were no other “availabl e” technologies for entrainment whose performance came close to th at of closed-cycle r ecirculating systems. Further, while reduced intake velocity was a very effective control for impingement and may also reduce entrainment of some life st ages of fish and shellfish, it does not significantly reduce entrainment of eggs and non-motile stages of larvae, and it is not physically available in many locations. EPA has broad discretion in what factor s it should consider when it determines the best technology available for minimizi ng the adverse environmental impacts of cooling water intake structures. As both th e U.S. Supreme Court and the Second Circuit Court of Appeals have underscored, section 316( b) is “sui generis,” in a class by itself, unencumbered by “specified statutory factors, ” Entergy Corp. v. Ri verkeeper, Inc, 556 U.S. 208, 222 (2009); Riverkeeper, Inc. v. EPA, 358 F, 3d 174,187 (2d Cir. 2004). The Second Circuit explicitly re jected the argument that, because section 316(b) does not*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 193 of 642 mention costs or other factors, EPA cannot gi ve costs or other fact ors “any” weight in deciding what is the best technology. Riverkeeper, Inc. , 358 F.3d at 195. Furthermore, the Second Circuit recognized th at EPA may base its decision on factors other than the effectiveness of a given technology in reduc ing impingement and entrainment and that EPA is entitled to deference in deciding what we ight to give to the factors it considers in its BTA determination. Riverkeeper, Inc. , 358 F.3d at 196. As noted, costs are one factor EPA may c onsider in its BTA determination. Here, while EPA did consider costs, costs were not a dispositive factor in the decision to reject closed-cycle cooling as the basis for a unifo rm national BTA entrainment standard. EPA did not reject closed-cycle cooling here eith er because it was not economically achievable or because the costs of closed-cycle would exceed its benefits. Instead, EPA rejected closed-cycle cooling as the technology ba sis for a uniform national BTA entrainment standard based on three factor s: land availability, air emi ssions, and remaining useful plant life as explained below. Central to EPA’s evaluation of the availabi lity of closed-cycle as BTA was EPA’s new understanding of the limitations of technolog ies other than closed -cycle in reducing entrainment. This presented EPA with a shar per choice than it had in the Phase II rule. For today’s rulemaking, EPA took a second look at the data it had relied on in the Phase II rule, particularly in light of new data received since th e Phase II rule. As a result, EPA learned that entrainment exclus ion does not necessarily equate to entrainment survival (76 FR 22185), a key underpinning to EPA’s BTA standards for entrainment in the remanded Phase II rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 194 of 642 For the remanded Phase II rule, EPA had established national BTA performance standards for entrainment (and impingemen t) and included a number of different alternative means to achieve the standards. Firs t, if a facility demonstrated that it could achieve reductions in flow a ssociated with closed-cycle c ooling, the facility met the BTA performance standards. Alte rnatively, a facility could demonstrate that it met the entrainment performance standards by a combination of installed technology and operational or other measures (including re storation measures). See 69 FR 41590 for a description of the final Phase II rule. Critical to EPA’s deci sion to provide an array of choices for achieving the national BTA entr ainment performance standards was a key factual conclusion. That conclusion was that a number of technologies would achieve performance reducing entrainment that was “comp arable” to that of closed-cycle cooling. Consequently, for the Phase II rule, EPA established an entrainment performance standard of 60 to 90 percent based on data it reviewed for the Phase II rulemaking. See 69 FR 41598 for information on EPA’s rationale for establishing comp liance alternatives as part of the final rule. In the Phase II rule, while EPA looked to the performance of cl osed-cycle as the benchmark against which it evaluated technol ogies for the BTA standards, EPA did not mandate the achievement of flow reductions that were in all cases equivalent to closedcycle. Given that the availa ble data supported the view that there were other much less expensive technologies that obtained significant reductions in entrainment, EPA was comfortable with a BTA standard that requir ed achievement of a level of performance that was generally comparable though not equivalent to closed-cycle.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 195 of 642 Since the Phase II rulemaking, EPA has rece ived new data and learned that its understanding of entrainment technology perf ormance was incomplete. Following the remand of the Phase II rule, EPA reexamined the data as well as new information on the performance of various entrainment control t echnologies it had previ ously reviewed. As a result, EPA determined that its conclusi on regarding the capability of these other technologies – a conclusion on which the Agency had based the Phase II BTA performance standards – was no longer suppor ted by the data EPA had before it. There is a second additional considerati on that further required EPA to focus renewed attention on how widely available clos ed-cycle cooling in fact was nationally. The Second Circuit decision in the Phase II rule removed restoration as a compliance option that EPA could consider. The decisi on underscored that restoration measures – one compliance option included in the Phase II rule – were not an available tool for complying with any 316(b) standard. Howeve r, at the time of the Phase II promulgation, EPA expected some facilities would use restorat ion in lieu of closed-cycle cooling, thus making closed-cycle or reductions commensur ate with closed-cycle feasible (76 FR 41609). With the court decisions that rest oration was not an available tool for compliance, compliance with a standard base d on closed-cycle cooling alone is less feasible than EPA had expected at the time of the Phase II promulgation. The changed landscape has narrowed mark edly EPA’s range of options with respect to the technology basis for toda y’s BTA standards. The gap between the performance of the most effective entrainmen t reduction technologies (closed-cycle) and other less expensive technologi es has widened significantly. EPA’s narrowed range of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 196 of 642 compliance technology choices required EPA to look even more closely at the feasibility of closed-cycle cooling and reduced flow. As the Second Circuit has noted, EPA is clearly entitled to make its choice among alternative BTA technologies based on more factors other than just a technology’s e ffectiveness in reducing impingement and entrainment. Riverkeeper, Inc. , 358 F.3d at 196. EPA identified three factors as significant in its decision to reject closed-cycle cooling as the sole technology basis for a national BTA entrainment standard. The thr ee factors that collec tively support rejecting closed-cycle cooling systems as a uniformly applicable BTA for existing facilities (except new units) are land availability, increased air emissions and remaining useful life. 1. Land Availability and Geographical Cons traints Could Be a Factor on a Local Basis While EPA’s record indicated that the majority of facilities have adequate available land to retrofit to closed-cycle cooling, some f acilities have land constraints. 78 While EPA originally estimated as many as 23 percent of faciliti es would not have enough space, 79 it observed on site visits that some facilities with a small parcel of land could still install closed-cycle coolin g by using creative engineering solutions. On the other hand, EPA found that some facilities with large acreage could not feasibly install

78 For example, in the case of fossil fuel facilities, sc rubber controls may already have been required to comply with air rules and standards. This may reduce available land for closed-cycle. 79 EPRI reported at least 6 percent of sites it eval uated were deemed “infeasible” because no space was available on which to locate a cooling tower. (DCN 10-6951) While EPA does not have access to the facility level data, EPRI’s report supports EPA’s conc lusion that there is significant uncertainty around space constraints for facilities to install closed-cycle cooling.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 197 of 642 cooling towers because of local zoning or other local concerns. Thus, existing physical space at the facility was not the only factor contributi ng to uncertainty about land availability. Further review has shown that setback distances to mitigate noise and plume abatement (based on GPS mapping of residential areas) act as an addi tional constraint on land available for retrofitting to closed-cycle , and the cost of acquiring new land may be prohibitive for some facilities. Consequently, EPA estimates that 25 percent or more of facilities might have one or more constrai nts on land availability that would limit the ability to retrofit for cooling towers for the en tire facility. EPA lack s adequate support to indicate that land constraints can be accommodated at existing facilities. EPA also attempted to determine criteria base d on the data in its record that would enable it to define a threshold for determini ng land availability on a nationwide basis, but was unsuccessful. For example, one analysis explored a threshold of approximately 160 acres per GW (gigawatt) below which a facility could not feasibly in stall cooling towers. Based on acres and the footprint of the facility and its surrou ndings (primarily those sites for which EPA conducted site visits), EPA f ound such an approach did not accurately identify which facilities could feasibly install closed-cycle. 2. Increased Air Emissions Could Be a Factor on a Local Basis As previously discussed, retrofitting closed-cycle cooling (without also repowering) would result in increased air emissions of va rious pollutants, including particulates, sulfur dioxi de, nitrogen oxides, mercur y, and greenhouse gases, among*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 198 of 642 others. 80 As a result of installing closed-cycle c ooling structures, fossil-fueled facilities would need to burn additional fuel, thereby emitting additional PM, CO 2 , SO 2 , NO X , and Hg. Two factors are responsible: (1) the need to compensate for energy required for operating cooling towers, and (2) slightly lower generating efficiency attributed to higherturbine backpressure when the condenser is not replaced with one optimized for closedcycle operation when retrofitting existing units (also referred to as the energy penalty). While both of these factors contri bute to increased air emissions, the larger contributor to projected increased air emissions is by far the energy penalty. The impact of the increased emissions va ries according to the local circumstances. The increased emissions could consist of st ack emissions from increased fuel usage, cooling tower emissions, and plumes of wate r vapor. EPA’s analysis suggested that the most significant impacts would be increased PM 2.5 emissions, which are associated directly with an increase in human health effects. EP A notes that cooling plume abatement and drift elimination technologies exist to address cooling tower emissions (and EPA included costs for such technologies in its analysis of Proposal Options 2 and 3). Further, EPA expects most effects of the par ticulates from cooling tower emissions would be limited to the immedi ate vicinity, confined wholly to the facility property. (See DCN 10-6954.) Therefore, EPA’s primary concern is increased air emissions associated

80 EPA recognizes that retrofitting closed-cycle cooling could be combined with other energy efficiency or pollution control technologies with the net effect of reducing air emissions; however, facilities could (and may be required to under other rules) install such t echnologies anyway, without converting to closed-cycle cooling.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 199 of 642 with additional fuel usage due to the energy penalty when retrofitting to cooling towers. EPA’s review of emissions data from E-GR ID (year 2005) suggests that impacts from these pollutant discharges could be signifi cant. These include the human health and welfare and global climate change effects – all associated with a variety of pollutants that are emitted from fossil fuel combustion. EPA is not able to quantify the frequency with which facilities could experience these local impacts, and therefore has concluded that the proper forum to address such local imp acts fully is in a site-specific setting.
3 . Remaining Useful Plant Life Coul d Be a Factor on a Facility Basis A number of facilities are neari ng the end of their useful life. Considering the long lead time to plan, design, and constr uct closed-cycle cooling systems, EPA determined that the Director should have th e latitude to consider the remaining useful plant life in establishing entrainment mortalit y requirements for a facility. The remaining useful plant life, along with other site-speci fic information, will affect the entrainment reduction of closed-cycle cooling at a facilit y. For example, retrofit ting to a closed-cycle system at a facility that is scheduled to clos e in three years will resu lt in little entrainment reduction as compared to retrofitting to closed -cycle at a facility that will continue to operate for a significantly longer period. The Decision to Establish a National BTA Standard Requiring Site-Specific Determination of BTA Entrainment Controls Once EPA determined that a “one-size-fits-all” approach for entrainment for existing units is not generally feasible, it is appropriate to assess the required controls on a site-specific basis. Therefore, for exis ting units, EPA decided to adopt as the BTA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 200 of 642 entrainment standard an overarching regulat ory framework under which the Director will establish BTA entrainment requirements on a site-specific basis following prescribed procedures and applying specified factor s for decision-making prescribed in the regulation and as described below. EPA concluded that site-specific pro ceedings are the appropriate forum for weighing all relevant consid erations in establishing BTA entrainment requirements. Closed-cycle cooling is indisputably th e most effective technology at reducing entrainment . Closed-cycle reduces flows by 95 pe rcent and entrainment is similarly highly reduced. But given that EPA estimates that 25 percent of existing facilities may face some geographical constraints on retrof itting closed-cycle cooling and concerns about air emissions and the remaining useful life of a facility, EPA re jected the option of requiring uniform entrainment controls base d on closed-cycle cooling. Instead, EPA elected to adopt as the entrainment standard a more flexible process in which, following consideration of a host of factors, the Di rector will prescribe 316(b) entrainment conditions appropriate at a part icular site. For additional di scussion on how a site-specific consideration of entrainment control require ments will be implemen ted, see Section VIII below. EPA has several reasons for adopting the framework approach as the BTA standard for entrainment. As explained, the record shows that though closed-cycle cooling is effective, it is neither widely available nor feasible, and has significant unacceptable non-water quality impacts. While EPA cannot identify with precision the extent of these limitations on installing cl osed-cycle cooling systems nationwide, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 201 of 642 record indicates that the circumstances are neither isolated nor insignificant. In light of this, EPA decided not to establish clos ed-cycle cooling as a presumptive BTA entrainment standard, pending a site-speci fic demonstration of the limitations. Instead, entrainment control requirements will be determined in a site-specific setting where the opportunity for local input in decision -making process will be maximized. With regard to new units at existing facilities, based on the performance of properly operated cooling tower operation and the availability, feasibility and affordability of closed-cycle cooling at new units, EPA has identified wet cooling systems as the best performing technology for both impingement mortality and entrainment for new units at existing facilities. selected closed-cycle recirculating systems based on wet cooling towers as BTA. Fo r a discussion of how the three factors (availability, feasibility and affordability ) relate to new units, see Section VI.D.3. Consistent with the Phase I rule for new f acilities, EPA has also included a compliance alternative allowing a facility to show perfor mance comparable to that of a closed-cycle recirculating system. The new unit provisions in today’s final rule are essentially the same as the requirements for new facilities under the Phase I rule.
D F . Other Options Considered fo r Today’s Final Regulation EPA considered several other options for the BTA standards in developing today’s rule, but ultimately rejected them. This section includes a discussion of these options, as well as some technologies that EPA considered, but did not include as compliance alternatives to the imping ement mortality standards.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 202 of 642 1. Proposal Option 4—Flexible Impingement Mortality Controls Similar to Final Rule at Existing Facilities with DI F of 50 mgd or more; BPJ Permits for Impingement Mortality and Entrainment at Existing Facilities w ith Design Intake Flow between 2 mgd and 50 mgd; Site-spe cific Entrainment Standard for Existing Facilities with DIF of 50 mgd or more; and Uniform Impingement Mortality and Entrainment Controls for All New Units at Existing Facilities Similar to Final Rule At proposal, EPA’s preferred option was Option 1, which was the option closest to today’s final rule, and the starting point for the description of the changes to the rule in Section V above. At proposal, EPA also cons idered a variant of Option 1, called Option 4, which changed the impingement mortalit y requirements for facilities under 50 mgd from the performance standard in Option 1 to BTA as determined by best professional judgment. In the case of an existing facility belo w 50 mgd that added a new unit, the flow associated with the new unit would have been subject to the uniform entrainment requirements based on closed-cycle cooling. Finally, all existing fa cilities withdrawing more than 2 mgd of DIF would have been subject to entrainment requirements established on a site-specific basis, with the exception noted above for new units. 1. Closed-Cycle Recirculating Systems as National BTA The option analyzed here, called Proposal Option 4, is likewise similar to the final rule, but for the impingement standard based on BPJ for faci lities between 2 and 50 mgd. EPA ultimately rejected Proposal Op tion 4 because EPA found that the technologies on which the impingement mortalit y performance standard of today’s final*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 203 of 642 rule is based are available, feasible, dem onstrated, and affordable for all regulated facilities on a national basis. Moreover, EPA’s analysis showed that the difference in the total costs for the two options was nominal. Additionally, EP A notes that many facilities with a DIF under 50 mgd already use closed -cycle cooling and would have minimal burden under Addressthe final rule. These faciliti es would have no difficulty complying with the requirements EPA is establishing in today’s final rule. Proposal Option 4, by not distinguishing between those facilities under 50 mgd that have already minimized adverse environmental impacts from those that have not, masks the actions that would have to be taken by the latter group to comply with today’s final rule. In addition, the flexibilities introduced in th e June 11, 2012 NODA and included in today’s final rule applied to all facilities, rath er than taking the Option 4 appr oach at proposal of providing for more Director discretion for only the smaller withdrawing facilities. EPA also concluded that the data colle ction activities required under the final rule will be more protective of threatened and endangered speci es because they provide information on a larger number of facilities than Proposal Option 4 for considerati on by the Director in permitting decisions. Lastly, EPA acknowle dges that Proposal Option 4 is more burdensome to permitting authorities than is the final rule, as it requires more case-bycase decision making.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 204 of 642 2. Proposal Option 2—Flexible Impingement and Mortality Controls Similar to Final Rule at All Existing Facilities that Withdraw over 2 mgd DIF; Site-specific Entrainment Standard for Existing Facilities with DIF at or below 125 mgd; Require Flow Reduction Comm ensurate with Closed-cyc le Cooling by Facilities greater than 125 mgd DIF; and Uniform Impingement Mortality and Entrainment Controls for All New Units at Existing Facilities

As previously explained, EPA assessed a number of different technologies that reduce impingement mortality and entrainmen t as the possible basis for section 316(b) requirements. EPA concluded that closed-c ycle recirculating systems (based on wet cooling towers) are the most effective technology for reducing impingement mortality and entrainment. Notwithstanding that conc lusion, EPA has decided not to establish a performance standard for impingement and entrainment based on closed-cycle recirculating systems for exis ting facilities. Furthermore, EPA found that there are no other effective technologies for entrainment that are available nationally. As described previously, each of the three factors for re jecting closed-cycle cooling as BTA for entrainment would also apply in the case of Proposal Option 2, despite the smaller number of facilities that would be subject to a re quirement to retrofit. The technology basis for entrainment mortality controls for facilities greater than 125 mgd DIF under this option would have been wet cooling systems. best performing technology for reducing impingement mortality and entrainmentThe constraints discussed above that are associated with retrofitting a large portion of the universe of affected facilities, led EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 205 of 642 to conclude that requiring closed-cycle cooling on a uniform basis scale was not appropriate for a national regulation

. Notwithstanding that conclusion, EPA has d ecided not to establish a performance standard for entrainment based on EPA notes that it proposed multiple options that included closed-cycle recirculating systems. Closed-c ycle , and solicited comment on all aspects of closed-cycle cooling . After fully considering all comments and data, EPA still finds closed-cycle cooling is not the “best technology available for minimizing adverse environmental impact” required by section 316(b). Because of a combination of concerns

over technical feasibility and total cost/availability, air emissions, and remaining useful life of the facility , EPA has rejected closed-cycle reci rculating systems as the basis for national entrainment controls. After considering a ll the relevant factors, EPA determined that it will not establish a uniform BTAimpi ngement and/or entrainment controls. Nor is EPA able to identify a subcategory for whic h these concerns no longer apply. Moreover, the complex interaction of all of these factors at individua l sites does not lend itself to other regulatory options that would require closed-cycle re circulating systems with an “off ramp” if any of the factors were shown to result in unacceptable impacts because this would create a presumption for closed-cycle c ooling rather than an equal balancing of all relevant factors. EPA decided not to es tablish any presumptive BTA entrainment outcome. EPA finds the entrainment performance standard based on retrofitting closedcycle cooling for existing units. Instead, for existing units, EPA has decided to adopt as the BTA entrainment standard a regulatory standards framework under which the Director will establish BTA entrainment requi rements onin today’s final rule will provide*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 206 of 642 a site-specific basis following prescribed pr ocedures and applying specified factors for decision-making, as described below. EPA concluded that site-specific pro ceedings are the appropriate forum for weighing all relevant consid erations in establishing BTA entrainment requirements. Closed-cycle cooling is indisputably th e most effective technology at reducing entrainment given the direct relation between entr ainment and flow. Closed-cycle reduces flows by 95 percent and consequently impi ngement mortality and entrainment are similarly highly reduced. But given that EP A estimates that 25 percent of existing facilities may face some geogra phical constraints on retrofitti ng closed-cycle cooling and EPA’s decision that 316(b) requirements s hould reflect consideration of costs and benefits, EPA rejected the option of requiri ng uniform entrainment controls based on closed-cycle cooling with the opportunity fo r individual facilities to show why they should not be subject to such controls. In stead, EPA elected to adopt as the 316(b) performance standard aconsistent, more open-ended process in which, following consideration of a host of factors, the Di rector will prescribe 316(b) entrainment conditions appropriate at a part icular site. For additional di scussion on how a site-specific consideration of entrainment control requirements will be implemented, see section VIII below. EPA has several reasons for adopting a fr ameworkefficient, and more effective approach as the national BTA standard for entrai nment. The record shows that closedcycle cooling is not technically available in a number of circumstances either because it is not feasible, has significant ancillary advers e consequences, or is otherwise unwarranted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 207 of 642 by site-specific circumstances such as the age of the facility. While EPA cannot identify with precision the extent of these limitations on installing closed-cycle cooling systems nationwide, the record indicates that th e circumstances are neither isolated nor insignificant. In light of this, EPA decided not to establish closed-cycle cooling as the presumptive BTA entrainment standard. Instead, entrainment control requirements will be determined in a site-speci fic setting where the opportunity for local input in decisionmaking process will be maximized. Three Factors Support EPA’s Decision to Es tablish Site-Specific BTA Entrainment Control Requirements for Existing Facilities The three factors that suppor t determining entrainment control requirements on a site-specific basis (except with respect to new units) and rejecting closed-cycle cooling systems as BTA are land availability, increa sed air emissions and remaining useful life. Another consideration EPA evaluated is cu rrent transmission capacity. How all these factors support the Agency’s conclusion that site-specific, not national, entrainment requirements at existing facilities (except new units) is discussed in detail below. a. Land Availability Could Be a Factor on a Local Basis While EPA’s record indicated that the majority of facilities have adequate available land to retrofit to closed-cycle cooling, 81 some facilities have feasibility

81 In the case of fossil fuel plants, scrubber controls may also be newly required to comply with air rules and standards.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 208 of 642 constraints. EPA attempted to determine a th reshold of land (for example, one analysis explored a threshold of approximately 160 acres per GW [gigawatt]) below which a facility could not feasibly install cooling to wers. While EPA originally estimated as many as 23 percent of facilitie s would not have enough space, 82 it observed on site visits that some facilities with a small parcel of land c ould still install closed-c ycle cooling by using creative engineering solutions. On the other hand, EPA found that some facilities with large acreage could not feasibly install cooling towers because of local zoning or other local concerns. Further review has shown that setback distances to mitigate noise and plume abatement (based on GPS mapping of residential areas) act as an additional constraint on land available for retrofitting to closed-cycle. Consequently, EPA estimates that as many as 25 percent of facilities mi ght have either one or more constraints on available space that would limit retrofit of coo ling towers for the entire facility and the cost of land acquisition is prohi bitive. EPA lacks adequate su pport to indicate that land constraints can be accommodated at existing facilities. b. Increased Air Emissions Could Be a Factor on a Local Basis As previously discussed, retrofitting closed-cycle cooling (without also repowering) would result in increased air emissions of va rious pollutants, including

82 EPRI reported at least 6 percent of sites eval uated were deemed “infeasible” because no space was available on which to locate a cooling tower. (DCN 10-6951) While EPA does not have access to the facility level data, EPRI’s report supports EPA’s conc lusion that there is significant uncertainty around space constraints for facilities to install closed-cycle cooling.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 209 of 642 particulates, sulfur dioxi de, nitrogen oxides, mercur y, and greenhouse gases, among others. 83 As a result of installing closed-cycle c ooling structures, fossil-fueled facilities would need to burn additional fuel, thereby emitting additional PM, CO 2 , SO 2 , NO X , and Hg. Two factors are responsible: (1) the need to compensate for energy required for operating cooling towers, and (2) slightly lower generating efficiency attributed to higherturbine backpressure when the condenser is not replaced with one optimized for closedcycle operation. In contrast to retrofits, ne w units would readily optimize their cooling water systems for cooling towers, reducing the size of the cooling towe rs, increasing their efficiency, and reducing energy requirements. The impact of the increased emissions va ries according to the local circumstances. The increased emissions could consist of st ack emissions from increased fuel usage, cooling tower emissions, and plumes of wate r vapor. EPA’s analysis suggested that the most significant impacts would be increased PM 2.5 emissions, which are associated with an increase in human health effects. In a ddition, these increased emissions may make it more difficult to obtain air permits for facil ities in those localities in nonattainment for
PM 2.5 because of the need to first identify offs ets to its emissions. EPA notes that plume abatement and drift elimination technologies exist that may be able to address these

83 EPA recognizes that retrofitting closed-cycle cooling could be combined with other energy efficiency or pollution control technologies with the net effect of reducing air emissions; however, facilities could (and may be required to under other rules) install such t echnologies anyway, without converting to closed-cycle cooling. Comparing closed-cycle cooling to once-throug h cooling with all other technologies held constant, there is an energy penalty that w ould lead to greater air emissions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 210 of 642 emissions (and EPA has included costs for such technologies in its analysis of Proposal Options 2 and 3), but emissions might not be eliminated entirely. For some facilities, the increased air emissions (andthan standards with an inability to obtain proper operating permits) will remain a barrier to installing closed-cycle cooling. EPA expects most effects of the particulates from cooli ng tower emissions would be limited to the immediate vicinity, confined wholly to the facility property. (See DCN 10-6954.) EPA recognizes that this is separate from PM emi ssions from the stack as a result of increased fuel use. In addition, plumes of water vapor from the cooling tower could cause safety issues because of icing of nearby roadways and visibility constraints for facilities near an airport. EPA’s review of emissions data fr om E-GRID (year 2005) suggests that impacts from other pollutants will be less significant, but on a localized basis, these coul d still be significant. They include the human health a nd welfare and global climate change effects

-- all associated with a variety of pollutant s that are emitted from fossil fuel combustion. EPA is not able to quantify the frequency w ith which facilities could experience these local impacts, and therefore has concluded th at the proper forum to address such local impacts fully is in a site-specific setting.

c . Remaining Useful Plant Life Coul d Be a Factor on a Facility Basis A number of facilities are neari ng the end of their useful life. Considering the long lead time to plan, design, and construct closed-cycle cooling systems such as wet cooling towers, EPA determined that the Direct or should have the lati tude to consider the remaining useful plant life in establishing entrainment mortality requirements for a facility. The remaining useful plant life, al ong with other site-specific information, will*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 211 of 642 affect the evaluation of the benefits ( nonmonetized and monetized), and the overall comparison of costs and benefits, of closed-c ycle cooling at a facility. For example, retrofitting a closed-cycle system at a facility that is scheduled to close in three years will not yield near as many benefits as a facility that will continue to operate for 20 years. d. Other Considerations In addition to the three fact ors above, one of the benefits of site-specific BTA is that it provides a kind of safety net guardi ng against the possibility of outage related electricity reliability problems. When EPA an alyzed the effect of this regulations on electricity generation and transmission adequacy (more below), it concluded that even for the most stringent option there would not be any significant reduction in reliability of the national or regional electric ity supply. There may however be local areas where the existing transmissions system is so limited that the outages require d to retrofit with a closed-cycle cooling system could require extensive transmissions upgrades and stress the system. Some have suggested that Lo s Angeles and Chicago might be examples. While EPA does not have the expertise to ev aluate such claims, the approach EPA is taking would avoid that possibility a nd thus serves as a safety net. EPA’s analysis of closed-cycle coo ling included an analysis of current transmission capacity at a national and regiona l scale. Even the analysis of the most stringent option (Proposal Option 3, which woul d have required closed-cycle cooling for all facilities with a DIF greater than 2 mgd) did not indicate that there would be any significant reduction in the reli ability of the national or re gional electricity supply. By contrast, some external studies by stakeholders suggest that the existing facility rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 212 of 642 would significantly reduce relia bility of the electric gr id. These studies, however, assumed that EPA’s rule would be based on one-size-fits-all requirements to retrofit to closed-cycle cooling and that compliance would be required by 2018. 84 Both assumptions would increase the cost of co mpliance significantly compared with today's rule, and the 2018 compliance assumption would dramatically increase the costs of Proposal Option 3. In addition, however, during ce rtain site visits, EPA iden tified several urban areas where – even with outage coordination effort s – the existing local transmission system would not be able to transfer sufficient electricity to all customers during extended outages of facilities associated with retrof its to closed-cycle c ooling and would still require upgrades prior to the outage. This limitation to tran smission occurs even when a surplus of electricity can be generated in the same NERC (North American Electric Reliability Corporation) region. For example, EPA identified localized circumstances in Los Angeles and Chicago where an extended outage of one or more generating units could not be readily replaced by excess cap acity in nearby areas given the current transmission capacity. As a result, EPA has ta ken this uncertainty about the extent and likelihood of current local transmission capacity into account as an important consideration in the decision to require site-specific development of section 316(b) entrainment requirements.

84 See, for example, North American Electric Reliability Council’s (NERC) Potential Impacts of Future Environmental Regulations Extracted from the 2011 Long-Term Reliability Assessment, November 2011 at http://www.nerc.com/f iles/EPA%20Section.pdf.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 213 of 642 2. Proposal Option 3—“off ramp.” 3. Proposal Option 3—Flexible Impingement Mortality C ontrols at All Existing Facilities that Withdraw over 2 mgd DI F; Require Flow Reduction Commensurate with Closed-Cycle Cooling at All Existing Facilities over 2 mgd DIF Proposal Option 3 was, in many ways, the same as requiring closed-cycle cooling at all existing facilities. As described above, each of the thre e factors for rejecting closedcycle cooling as BTA for entrainment would apply with equal force for Proposal Option 3. As a result, EPA has concluded Proposal Option 3, similarly, is not available at the national level as BTA for entrainment. EPA is not reporting in this preamble or support documents on any updates since proposal to th e analysis of this option.appropriate as BTA for entrainment. 3. Proposal Option 2—Impingement Mortality C ontrols Similar to Final Rule at All Existing Facilities that Withdraw over 2 mgd DIF; Require Flow Reduction Commensurate with Closed-cycle Cooli ng by Facilities greater than 125 mgd DIF and Uniform Impingement Mortality and En trainment Controls for All New Units at Existing Facilities As described above, each of the three factor s for rejecting closed -cycle cooling as BTA for entrainment would also apply in the case of Proposal Option 2, despite the smaller number of facilities that would be subject to a requirem ent to retrofit. As a result, EPA concluded that Proposal Option 2 is not available at a national scale as BTA for entrainment.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 214 of 642 4. Proposal Option 4 Variant EPA also considered a variant of Proposal Option 4. As compared to Proposal Option 4, this variant did not include flexible alternatives for complying with the BTA impingement mortality standards (including pre-approved and streamlined alternatives), but did adopt the 50 mgd threshold to determin e those facilities fo r which the Director has more discretion in determining BTA via BP J. EPA analyzed this option to directly compare the effects of introducing flexible IM compliance alternatives at all facilities (as the final rule does) to the eff ects of introducing greater Director discretion for a subset of facilities, via BPJ permitti ng (as the Proposal Option 4 va riant does). The preferred option at proposal, Option 1, was estimated to be more costly than Option 4 (Option 1 was estimated to cost $384 annually as compared with $327 million annually for Option 4). Under the analysis su pporting the final rule the EP A is adopting today, however, today’s final rule is estimated to cost $275 million annually in comparison with an estimated cost of $284 million annually for the Proposal Opti on 4 variant. Thus, EPA has concluded that providing flexible alternativ es for compliance with the BTA IM standard at all facilities is both more effective at reducing costs to soci ety and more readily justified as best technology available as comp ared to the approach of introducing greater Director discretion for only a subset of fac ilities (below 50 mgd). Hence, EPA rejected the Proposal Option 4 variant, and the approach of introducing greater Director discretion for only a subset of f acilities (below 50 mgd). The technology basis for entrainment mortality controls for facilities greater than 125 mgd DIF under this option would ha ve been wet cooling systems. The constraints*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 215 of 642 discussed above that are associated with re trofitting a large porti on of the universe of affected facilities, in addition to the total co st, led EPA to conclude that requiring closedcycle cooling on a wide scale was not appropriate for a na tional regulation. 4. Proposal Option 4—Impingement Mortality Controls Similar to Final Rule at Existing Facilities with DIF of 50 m gd or more; BPJ Permits for Existing Facilities with Design Intake Flow between 2 mgd and 50 mgd; Uniform Impingement Mortality and Entrainment C ontrols for All New Units at Existing Facilities Similar to Final Rule Under Proposal Option 4, only those existing facilities with a DIF of 50 mgd or more would have been required to comply with uniform national impingement regulatory requirements as described in the final rule. Re gulated facilities with a DIF of less than 50 mgd would not have been subject to the na tional impingement requirements in today’s final rule but would have continued to have their 316(b) permit requirements established on a site-specific, BPJ basis. In the case of an existing f acility below 50 mgd that added a new unit, the flow associated with the new unit would have been subject to the uniform entrainment requirements based on closed-cyc le cooling. Finally, a ll existing facilities withdrawing more than 2 mgd of DIF w ould have been subject to entrainment requirements established on a si te-specific basis, with the exception noted above for new units. EPA ultimately rejected Proposal Option 4 because EPA found that the final rule is available, feasible, and demonstrated fo r all regulated faciliti es on a national basis. Moreover, EPA’s analysis showed that the diffe rence in the total costs for the two options*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 216 of 642 was nominal. Additionally, EPA notes that many facilities with a DIF under 50 mgd already use closed-cycle cooling an d would have minimal burden under this approach. These facilities would have no difficulty comply ing with either the final rule or Proposal Option 4. Proposal Option 4, by not distinguis hing between those f acilities under 50 mgd that have already minimized adverse envir onmental impacts from those that have not, masks the actions that would have to be take n by the latter group to comply with today’ final rule. In addition, the flexibilit ies introduced in the June 11, 2012 NODA and included in today’s final rule are applied to a ll facilities, not just the smaller withdrawing facilities addressed by Proposal Option 4. EPA also concluded that the data collection activities required under the final rule will be more protective of threatened and endangered species because it provides information on a larger number of facilities than Proposal Option 4 for consideration by the Dir ector in permitting decisions. Lastly, EPA acknowledges that Proposal Option 4 is more burdensome to permitting authorities than is the final rule, as it requires more site-specific decision making. 5. Proposal Option 2 Variant EPA also considered a variation of Pr oposal Option 2 that would have used 125 mgd AIF rather than 125 mgd DIF as the th reshold. However, as described above, EPA rejected Proposal Option 2 and, for the same reasons, rejected this variant of Option 2. 6. Site-Specific Approach to Addressing Impingement Many commenters (primarily from industrialmanufacturing facilities) commented that EPA should adopt a site-specific appr oach to addressing impingement mortality, similar to that employed for entrainment. As a result, EPA also considered an approach*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 217 of 642 that would have established both impingement mortality and entrainment requirements fully on a site-specific basis taking into acc ount for the particular facility, among other factors, those previously described as pe rtinent to EPA’s 316(b) BTA determination. EPA rejected a fully site-specific approach for impingement controls principally because low-cost technologies for impingement mortality are available, feasible, and demonstrated , and affordable for facilities nationally , and because. Because technologies are available, a fully site-specific approach would place an unnecessary additional burden on state permitting resources. Moreover, the final impingement mortality standard includes several alternatives that allow site -specific demonstration that a particular technology performs at a level representing th e best technology available for the site. EPA is instead promulgating a modified ve rsion of the proposed rule, adding several elements of flexibility , (i.e., compliance alternatives), and thus directly addressing many of the concerns raised by these commenters.
7. Closed-Cycle Cooling to A ddress Impingement Mortality EPA did not select flow reduction commensur ate with closed-cycle cooling as the technology basis for impingement mortal ity because, despite the incremental improvement in reducing impingement, the cost of closed-cycle cooling is more than 10 times that of modified traveling screens with a fish return system. As a result, modified traveling screens with a fish return system are more cost-effective than flow reduction commensurate with closed-cycle cooling at preventing impingement mortality.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 218 of 642 8. Pre-approved Technologies Many commenters requested that EPA “ pre-approve ” technologies that, once installed, would obviate the need for further regulatory conditions such as periodic monitoring. This is similar to the approach ta ken for cylindrical wedgewire screens in the remanded 2004 Phase II rule (see § 125.99(a)).69 FR 41693). EPA has adopted, in significant measure, comment ers’ suggestion in the BTA impingement mortality standard in today’s rule by including several pre-approved and several streamlined compliance alternatives in the form of technologies that may be a pproved following a demonstration of required performance, so long as the fac ility shows that its a lternative technology is operating in a manner that minimizes adverse environmental impacts. As an option for achieving the impingement mortality standard s, a facility may install and operate specified impingement controls that EPA has determined will comply withwhose performance is comparable to or better than the numerictechnology EPA concluded was the “best technology available” for impingement mortality performance standardreductions :

 Closed-cycle recirculating systems, defined at § 125.92 (c)

 Existing offshore velocity caps, defined at § 125.92 (v)

 Technologies that result in a design intake velocity less than or equal to 0.5 fps, including most modern cylin drical wedgewi re screens

 Technologies that result in actual intake velocity less than or equal to 0.5 fps*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 219 of 642 Properly operating Although this rule leaves the BTA entrai nment determination to the Director, with the possible BTA decisions ranging from no additional controls to closedcycle recirculating systems will comply with the entrainm ent standard as well.plus additional controls as warranted, EPA expect s that the Director, in the site-specific permitting proceeding, will determine that facili ties with properly operated closed-cycle recirculating systems do not require additional entrainment reduction control measures. Refer to Section E.1 for the EPA’s ra tionale for selecting these controls. 9. Barrier Nets For estuaries and oceans, EPA proposed seasonal deployment of barrier nets on marine waters to address impingement mortality of shellfish (crustaceans). Following EPA’s analysis of additional data desc ribed in the June 11, 2012 NODA, EPA has incorporated data regarding shellfish impingement survival rates into the numeric impingement mortality performance standard in the final rule, thereby eliminating the need to require barrier nets. However, EPA does recognize that barrier nets may be an appropriate measure for the protection of she llfish at some facilities and therefore has included a provision that gives the director discretion to re quire additional measure for the protection of shellfish. 10. Cylindrical Wedgewire Screens EPA did not select wedgewire screens as the technology basis for impingement mortality controls because wedgewire screen s are not available and feasible for all existing facilities. EPA also did not need to include wedgewire screens as a pre-approved compliance alternative for impingement contro ls because wedgewire screens are typically*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 220 of 642 designed with an intake velocity of 0.5 fp s and therefore, can demonstrate compliance with the impingement mortality standard under the intake velocity compliance alternative. E. Option Selection In the proposed rule, EPA discussed four primary options. EPA also described additional options being considered for im pingement mortality controls to provide facilities greater flexibility in achieving a BTA impingement mortality standard in its June 11, 2012 NODA (77 FR 34317). After a careful review of these proposed options, additional data, and public commen ts on both the proposed rule and the two NODAs, EPA has opted to promulgate BTA standards for the final rule that are similar to, but a modification of, Pr oposal Option 1. G. Final Rule BTA Performance Standards The rule establishes the following BTA st andards for Impingement Mortality and Entrainment: Uniform Impingement Mortality ControlsStandards at All Existing Units at Existing Facilities that withdraw overgreater than 2 mgd DIF; an Entrainment Standard based on Site-Specific Entrainment Controls that requires site-specific entrainment controls determined by the EPA or the State NPDES permitting authorityDirector for Existing Units at Existing Facilities (other than New Units) that withdraw over 2 mgd DIF; Uniform Impingement MortalityBTA st andards for impingement mortality and Entrainment Controls for All New Units at Existing Facilities). How these vary from Proposal Option 1 is further described here. Th e remainder of this section explains EPA’s rationaleentrainment for selecting this option for the final rulenew units at existing*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 221 of 642 facilities . The previous section described the ot her options that EPA considered but ultimately rejected , and the basis for those decisions. 1. Impingement Mortality Controls for Existing Units at Existing Facilities for the Final Rule. Today’s final rule allowsprovides a facility a number of alternatives for complying with the BTA impingement morta lity standard. As discussed more below, EPA’s BTA impingement mortality standard is based on EPA’s conclusion that, on a national basis, modified traveling screens with fish-friendly return systems are the best performing technology available for impingeme nt mortality reduction. But EPA is not requiring compliance with the BTA impinge ment mortality standards only through monitoring data showingthat demonstrates achievement of the numeric reduction in mortality levels that EPA has determined well-operated modified traveling screen will achieve. Rather, the final rule allows facilities to comply with the impingement mortality standards by employing any of seven alternatives, including monitored compliance with a numeric impingement mortality performance standard. Based on its analysis, EPA identified a number of othe r technologies and operational measures that could achieve equivalent, or better, performance to the im pingement mortality controls achieved with modified traveling screens. Thus, the final ru le provide for use of these alternatives to comply with the BTA impingement mortality standards. TheBased on its review of availabl e data and information submitted by commenters, EPA identified a number of ot her technologies and operational measures that could achieve equivalent, or better, performance to the impingement mortality*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 222 of 642 reductions achieved with modified traveling sc reens that may be available for some sites. Thus, the final rule provides seven alternatives for complying with the BTA impingement mortality standards. These include fourthree compliance paths based on “ pre-approved ” technologies, and twothree compliance paths that offer a “ streamlined ” approach to compliance. EPA expects the majority of fac ilities will use one of these six options to comply with the BTA impingement mortalit y standards (see Exhibit VIII-1 for more information). The following are pre-approved technologies which allow for compliancewill comply with today’s rule throughand are associated with minimal monitoring and reporting of operational a nd/or design parameters . These technologies are (the numbering reflects the numbering in § 125.94(c)): operating (1) a closed-cycle recirculating system; (2) a cooling water intake structure that EPA or the State NPDES permitting authority determines has a design maximum through-screen intake velocity of 0.5 feet per second; (3) a cooling water intake structure that EPA or the State NPDES permitting authority determines has an actual maximum through-scre en intake velocity of 0.5 feet per second; or (4) an existing offshore velocity cap. Th e general intent behind a compliance path based on a pre-approved technology is to provide a level of certainty to the regulated entity that they would be deemed complia nt with the relevant rule requirements by designing, installing, and operating the techno logy as specified in the regulation. The fourthree pre-approved compliance a lternatives are each based on a particular technology approach (. The permit for example closed-cycle recirculating systems such as wet cooling towers, design intake velocity such as a cylindrical wedge wire screen, actual*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 223 of 642 intake velocity, and existing offshore velocity caps). Aeach compliance alternative based on a pre-approved technology enta ils will necessarily include criteria, design standards, and operational measures in the regu latory languageconditions specific to the preapproved technology. The compliance paths based on pre-approved technologies in today’s final rule include simplif ied permit application requirements ( such as reduced or minimal study ,), documentation, or reduced monitoring, and will therefore poseresult in greatly simplified implementation. In toda y’s final rule, there are no biological compliance monitoring requirements for any of the fourthree compliance paths based on

“ pre-approved ” technologies. The two “Under the streamlined ” alternatives, a facility must demonstrate to the Director that traveling screen s or some combination of t echnology controls or operational measures represent BTA performance under the conditions at the site. The three streamlined compliance alternatives includeare (the numbering reflects the numbering in § 125.94(c)) operating ( 3) a cooling water intake struct ure that EPA or the State NPDES permitting authority determines has an actual maximum through-screen intake velocity of 0.5 feet per second; ( 5) modified traveling screens whose demonstrated performance isrepresents the best technology available for impinge ment reduction at the site; or (6) a system or combination of technologies or operational measures whose demonstrated performance is the best technology available for impingement reduction at the site. In order to demonstrate under either (5) or (6), that th e screens or other measures are BTA at the siteperformance , a facility will need to conduct a 2two -year site-specific study at the same time it conducts its sour ce water characterization and entrainment*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 224 of 642 characterizationEntrainment Characterization Study. This study to ensuremust demonstrate that its modified traveling screens, or systemcombination of technologiestechnology controls and operational measures , have been adjusted and optimized so as to minimize impingement mortality. If this demonstration is madeIf the Director concludes that the facility has demonstrated optimized performance for its controls , the facility will have no subseque nt biological monitoring and reporting requirements in its permits as compared to a facility that complies using the numeric impingement mortality reduction performance standard. If the screens or other measures are not already installed, th e Director may approve postponi ng the two-year study to be conducted after the entrainment determination has been made. These two “three streamlined ” compliance alternatives are based on a collectiontechnology or suite of technologies and practices with more variable performance, and as such necessitate some degree of study, such as optimization of thein order to optimize technology performance for the site-specific conditions encountere d by a facility. A streamlined compliance alternative may require some level of mon itoring, but once the op timal performance of the technology has been identified, conditions included in the permit specifying optimal operation ensure that the streamlined alternative is similar to a pre-approved alternative.or better than the impinge ment mortality performance standard. For example, the streamlined compliance alternatives also do not require biological compliance monitoring. The seventh alternative (at § 125.94(c )(7)) for complying with the BTA impingement mortality standards requires the owner or operator to conduct biological*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 225 of 642 compliance monitoring to demonstrate compliance with the numeric impingement mortality performance standard through biological monitoring . Under this alternative, the owner or operator has the flexibility to choose any technology, including a new or innovative technology, provided the comp liance monitoring demonstrates the performance standard is achieved. Further Each of these seven alterna tives is further described below. In addition, further discussion of how each of these alternatives will be implemented may be found in Section VIII. a. Closed-Cycle Recirculating Systems As described above, in Chapter 6 of the TDD, and in prior rulemakings, EPA has long recognized the benefits of flow reduction from closed -cycle recirculating systems for reducing impingement (as well as entrai nment). A facility employing a closed-cycle recirculating system will typically reduce im pingement by more than 95 percent. As a result, a facility may choose to comply with the BTA impingement mortality standards in today’s final rule by demonstr ating that it uses a properl y operated and maintained closed-cycle recirculating system. EPA estimates that approximately 18 percent of intake structures (i.e., those that already have an existing closed-cyc le recirculating system, pl us facilities located in California and New York, whose State regulation s are at least as stringent as the final rule) will choose this alternative. However, as discussed in Section II above, EPA hasdoes not attempted to define allhave the data to determine precisely which impoundments usedare serving as part of a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 226 of 642 closed-cycle recirculating system as a heat sink as closed-cycle recirculating systems; only thosedefined at 40 CFR 125.92(c)(2). Ho wever, EPA is aware that some facilities have created their impoundments that are not themselves waters of the U.S. and that can be demonstrated to the Director’s satisfaction to minimize cooling in a water withdrawals from waters of the U.S . will be considered to meet as part of their cooling system. EPA does not intend to eliminate the use of such lawfully created impoundments for their intended purpose, as doing so could result in a large number of stra nded assets. If the cooling system with the impoundment minimi zes the withdrawal of make-up water for cooling purposes, the Director may determine the cooling system meets the definition of a closed-cycle recirculating system. b. Reduced Intake Velocity EPA has long recognized the relationship between impingement and intake velocity. EPA conducted an analysis of fish swim speeds in the Phase I rule (see 66 FR 65274, December 18, 2001) and concluded that a design through-screen velocity of 0.5 fps is protective of 96 percent of motile organisms. However, EPA did not select intake velocity as the sole technology basis for the BTA impi ngement mortality standards. Although the performance of 0.5 fps intake velocity achieves gr eater reduction in impingement mortality than the technology on which the BTA impingement mortality standards are based, reducing a facility’s inta ke velocity is not widely available or feasible for all existing facilities (see Chapter 6 of the TDD).
EPA concluded that it should allow facilities to complyis including reductions in intake velocity as an alternative for complying with the BTA impingement mortality*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 227 of 642 standards through reduced intake velocity. As a result, a A facility may choose to comply with the impingement mortality standa rds in today’s final rule by instead demonstratingchoosing this alternative must demonstrate that (1) the through-screen design velocity could not exceed 0.5 fps or (2) the actual intake velocity does not exceed 0.5 fps. EPA estimates that approximately 34 percent of intake structures will choose this alternative. This estimate incl udes facilities that have an existing intake velocity of 0.5 fps or less, plus those facilities that are proj ected to install a tec hnology that would reduce their intake velocity (large r intake, wedgewire screens, or variable speed pumps). i. Design Intake Flow Basis Consistent with EPA’s determination in its earlier 316(b) regul atory efforts, the final rule allows a facility to comply w ith the BTA impingement mortality standards by demonstrating that its intake has a maximu m through-screen design velocity of 0.5 fps

. EPA concluded that facility’s operating at this through-screen design velocity will protect the vast majority of impingeable aquatic or ganisms. Facilities choosing to comply with the BTA impingement mortality standards may not average velocity across multiple intakes at a facility. ii. Actual Intake Flow Basis EPA is also adopting a provision to allo w facilities to demonstrate that the through-screen intake velocity at an intake structure does not exceed 0.5 fps on the basis of the intake’s actual flow. (Again, note that facility’sfacilities choosing this compliance alternative may not average intake velocity ac ross multiple intakes.) In contrast to design*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 228 of 642 flow , where the intake velocity can never exceed 0.5 fps above , a facility with an intake that hashaving a design through-screen intake velocity greater than 0.5 fps may be operatingoperated at a reduced capacity and therefore may be withdrawingwithdraw cooling water at a velocity less than 0.5 fps. As long as the actual intake flow is such that the velocity remains at or below 0.5 fp s, the reductions in impingement (and subsequently, impingement mortality) remain the same as a facility with a maximum design through-screen intake ve locity of 0.5 fps. As describe d below, a facility will be required to monitor its intake flow and report this data to the Director to verify that intake flows do not exceed 0.5 fps. This approach al so permits the Director to allow brief periods where the intake velocity wi ll exceed 0.5 fps under extreme conditions. c. Existing Offshore Velocity Caps A number of commenters stated that EPA should consider existing offshore intakes fitted with velocity caps “to be pre-approved ” as and complying with the BTA impingement mortality standards. EPALocating submerged intakes in the deeper regions of larger waterbodies (particu larly outside the littoral zone 85 ) has the potential to reduce both impingement and entrainment (I&E), due to the lower densities of aquatic organisms as compared to a shoreline-based intake. EP A has identified 11 facilities with offshore velocity caps, and reviewed a number of studies documenting the performance of these facilities with velocity caps . These studies show that the impingement reduction

85 The littoral zone extends from the shoreline to roughly the edge of the continental shelf.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 229 of 642 performance of intakes submerged far offshor e with velocity caps is dependent on sitespecific conditions. The data suggestshow that solely locating an intake far offshore (i.e., without also employing a velocity cap) mightachieves a 60 to 73 percent reduction in impingement, and therefore does not , in every circumstance, achieve impingement mortality reduction comparable to that of well-operated modified traveling screens. Similarly, the data also suggestshow that velocity caps alone achieve a 50 to 97 percent reduction in impingement, and therefore could result in compliance performance comparable to or better than m odified traveling screens in some , but not in all cases. However, all available data shows the combination of an existing intake located far offshore (i.e., a minimum distance ofapproximately 850 feet , as identified in the data for Nine Mile Unit 1 and Oswego Unit 5 ) in combination with use of a velocity cap will result in performance that exceeds the annual12-month average impingement mortality performance standard (alter native seven described above). 86,87 Because there is some amount of uncertainty in measur ing distances from a shorelin e, including but not limited to due to variations in water levels, storm swells, or tidal excurs ions, EPA has set the minimum distance offshore at 800 feet. As a result, the final ru le at § 122.95(c)(4) allows a facility to comply with the BTA impinge ment mortality standards with an existing

86 An existing facility may also choose to install a ne w offshore intake with a velocity cap, but such a facility would not automatically qualify as meeting the impingement requirements for the final rule. Such a facility would need to demonstrate equivalent performance to the impingement mortality limit.performance standard. 87 A velocity cap must also include bar racks or other devices to exclude large marine organisms (e.g., seals, turtles) from entering the intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 230 of 642 offshore intake with an existing velocity cap . located at least 800 feet offshore, based on the performance data from th e 11 identified facilities. As noted above, the record shows all existi ng facilities with a velocity cap located at least 800 feet offshore will meet or exceed the 12-month average mortality performance standard of 125.94(c)(7). EPA doe s not have data showing velocity caps located at lesser distances offshore will cons istently achieve the impingement mortality performance standards, but is aware that so me facilities may be able to achieve the impingement mortality standards through a combination of technologies that includes an offshore location. For example, the Office of Na val Research states that the littoral zone in ocean environments generally extends from the shore to 600 ft out in the water (ONR 2013). SEAMAP data in EPA’s record shows in stalling the intake to depths where there is a lower concentration of liv ing organisms (i.e., at least 65 feet) is also expected to decrease environmental impacts associated w ith intake operations. Therefore, the final rule allows facilities with intake struct ures at significant distances offshore to demonstrate the performance of their technology under § 122.95(c)(6), as further discussed below. In addition facilities may opt to cons truct an offshore velocity cap at new locations. In those circumstances, the fac ility will need to demonstrate that the performancetheperformance of its velocity caps is th e best technology available for impingement reduction under the alternative six found at § 122.95(c)(6). For more information, see DCN 12 -[XXXvelocity cap data/memo].-6601.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 231 of 642 EPA estimates that approximately 1 percent of intake structures (i.e., those with an existing velocity cap m eeting the definition at § 125.92 (v ) will choose this alternative. d. Install Modified Traveling Screens In the June 11, 2012 NODA, EPA discussed a “ streamlined ” compliance option that would provide facilities with a less bur densome alternative than the proposed rule. In the final rule, EPA has included thisan option in the final ruleat §125.95(c)(5) for facilities that install BTA.traveling screens – the technology that forms the basis for the numeric IM performance standards. Under this option, the facility must demonstrate to the Director that it will still submit the same application materials specified in § 122.21(r)(2)-(5).install a nd operate modified traveling scre ens as defined at 125.92(s) that are or will be optimized to minimize IM mortality at the site. The facility will also be required to submit an impingement technology performance optimization study (§ 122.21(r)(6)) which will include a 2-year opt imization study for the intake technology. The facility will conduct 2 y ears of monthly impingement monitoringdata collection , during which the facility w ill seek to optimize the technology performance to minimize impingement mortality. This study is intended to determine the optimal configuration and operating conditions of modi fied traveling screens and the fish handling and return systems for that intake to be consistently prot ective of aquatic organisms. During the course of the study, EPA expects that a facility will evaluate the interim results and make changes to the technology or operating conditions as needed to identify the most appropriate set of operational ch aracteristics to ensure long -term success. For example, a facility could adjust the spray wash pressure , adjust the rotating speed of the screens,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 232 of 642 rotate the screens more fre quently, re-angle the fish slui cing sprays, ensure adequate water in the return flume, design the fish re turn to avoid avian and animal predation on the aquatic organisms, and locate the fish retu rn in such a way to avoid predation. Once a facility has optimized its technology pe rformance, the study will identify operational measures that will serve as observable and enforceable permit conditions. As evidenced by the data used in determining the limitperformance standard , by requiring facilities to study the conditions for optimized perf ormance, many facilities will achieve impingement mortality reductions much greater than the annual12-month average impingement mortality performance standard without significant additional investment. Biological monitoringdata collection beyond the application inform ationthis two-year study will not be required. The facility will si mply be required to ensure that it is operating its technology under the identified conditions for optimized performance. TheIf the Director concludes that the screens will achieve optimized performance, the Director will also incorporate these operating conditions to ensure optimized performance as terms of the facility’s NPDES permit. As discussed in the NODA and Chapter 4 of TDD, EPA’s data indicate that most facilities employ tr aveling screens. 88 EPA anticipates that, as a result, many facilities will view the streamlined screen-based complian ce route as a logical choice for complying with the final rule. The streamlined option pr ovides an opportunity for a large number of

88 EPA’s technical survey found that 93 percent of electric generators and 73 percent of manufacturers already use screens, the majority of which are traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 233 of 642 the affected facilities (i.e., those that do not meet the criteria for the other compliance technologies) to demonstrate that their in takes are effectively reducing impingement mortality while significantly reducing th e burden on both facilities and regulatory agencies. EPA estimates that approximately 30 percent of intake structures will choose this alternative. 89 EPA also notes that the addition of observable and enforceable permit conditions constitutes a major revision to a facility’s NPDES permit and will therefore require that the changes be provided for public comment. EPA is aware that some facilities have no technologies installed and will choose to install modified traveling screens, and further that some facilities with traveling screens will choose to either re trofit to modified traveling sc reens with fish handling and returns. Obviously, the impingement tec hnology performance optimization study cannot be undertaken until the technology is first inst alled. In this case the NPDES permit would be issued before the completion of the op timization study. EPA expects a permit will be issued that includes a schedule for both the technology installa tion and the required optimization study. As discussed earlier, the Di rector can establish interim measures as appropriate (40 CFR 125.94(b)).

89 While EPA’s data shows 73 to 93 percent of facilities already use trave ling screens, EPA notes that many facilities use more than one technology. For example, some of these facilities also have a low intake velocity, an offshore velocity cap, or cooling towe rs. EPA expects facilities will choose the IM compliance alternative corresponding to these pre-approved technologies before they will choose to comply via optimized performance of th eir traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 234 of 642 e. System of Technologies as th e BTA for Impingement Mortality EPA recognizes that cooli ng water intake structures have a variety of configurations and facilities may choose to comp ly with the final rule by using more than one of the compliance approaches outlined above. In the June 11, 2012, NODA, EPA described an approach where facilities would be able to demonstrate “credit” toward meeting the impingement mortality requirements by reducing the total number of organisms impinged. EPA also intended for facilit ies to have the flexibility to employ any system of technologies or combination of operational measures to address impingement mortality so long as the performance of th e selected impingement reduction measures represented the best technology available fo r the site. The final rule includes an alternative reflecting these objectives. In the broadest sense, facilities have a number of options for reducing impingement mortality. Some may choose to comply using a singlean approach , where a single technology achieves the level of compliance necessary. Others may choose to employan approach of employing multiple approachestechnologies or operational

measures , including reducing the number of organisms that are impinged or even susceptible to being impinged. The following are examples of approaches for which a facility might be able to take credit fo r impingement reduction under this alternative:

 Partial closed-cycle cooling

 Variable speed pumps*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 235 of 642  Seasonal outages (including standard main tenance outages that are specifically scheduled to avoid a biologically sensitive period)

 Certain impingement technologies that re duce the number of organisms exposed to the intake structure (e.g., di versions, louvers, barrier nets)

 Intake location

 Behavioral technologies (e .g., light or sound barriers) 90 In each case, the technology employed re duces the number of organisms that potentially are impinged, resulting in a reduction in the number of organisms actually impinged (i.e., a reduction in the rate of impi ngement). By virtue of reducing the actual impingement, mortality caused by impinge ment is no longer a consideration—an organism that is never impinged cannot be killed by the intake structure. Some technologies work to reduce the intake fl ow, thereby reducing th e potential organisms exposed to the intake. Others work to divert organisms away from the screens, either through a physical exclusion or by being pla ced in a less biologically productive area. EPA concluded that it is appr opriate to recognize these re ductions in impingement as a step in achieving ana BTA impingement mortality reduction performance that is the best technology available at a particular site. As a resu lt, EPA expects the reduction in

90 For example, anadromous clupieds such as alewif e, blueback herring, and American shad have demonstrated avoidance behaviors when exposed to high frequency sound. Deployments of this technology at Entergy’s FitzPatrick Nuclear Station on Lake Onta rio have resulted in a reduction of over 90 percent in impingement of alewife. In this case, EPA expect s the Director would dete rmine that impingement requirements regarding alewife have been addresse d by the acoustical deterre nt. The Director could disallow such a technology if it were deemed to have a negative effect on threaten ed or endangered species whose habitat includes the facility’s intake location.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 236 of 642 impingement will be treated as an equivale nt reduction in impingement mortality, and the facility will therefore be considered by EPA or the State NPDES permitting authority in evaluating whether the system of technology and operational measures represented BTAchosen technologies and operational meas ures represent BTA performance under the site’s conditions. For example, an intake that operates infrequently due to the infrequent operation of the electric generating unit(s) it serves (such as a peaking unit) may use a relatively small amount of water on an a nnual basis when compared to the design capacity of the intake structur e. This facility may choose to comply with the impingement mortality standard at (c)(6) by demonstrating to the Director that the facility operates at an annual intake flow that is less than or equal to 24 percent of its design intake flow on an annual basis. This level of flow reduc tion could achieve a level of performance equivalent to or better than the impingement mortality performance standard in (c)(7), and therefore could be consider ed to be compliant with the requirements of today’s final rule. This demonstration may include design data, several years of past operating data, and dispatch modeling. These operating conditions would then be incorporated into the NPDES permit

. A facility complying under this part, must submit a impingement technology performance optimization study, which must in clude the calculated percent impingement mortality reflecting optimized operation of the system of technologies, operational measures, and best management practices and all supporting calcula tions. Total system performance is the combination of impingement mortality performance reflected in all of the following which apply:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 237 of 642  Rate of impingement – The estimated reductions in rate of impingement must be based on a comparison of the system to a once-through cooling system with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source waterbody. For impoundments that include waters of th e United States, the facility’s rate of impingement must be measured at a location within the cooling water intake system that the Director deems appropriate.

 Impingement mortality – If the demonstration relies in part on a credit for reductions in impingement mortality al ready obtained at the facility, two years of biological monitoringdata collection must be provided, demonstrating the level of impingement mortality the system is capable of achieving.

 Flow reduction – If the demonstration relies in part on flow reduction to reduce impingement, the data must in clude two years of intake flows, measured daily, as part of the demonstration. This must include documentation of how the flow reducti on results in reduced impingement. The permitting authorities would consider th is information shown in the two-year impingement technology performance optimization study that must be submitted under this alternative. For example, at facilities choosing to comply by demonstrating that they are operating below 24 percent of their intake capacity, or that they are peaking units, the Director should use this study to establish ope rating conditions that en sure that the intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 238 of 642 continues to operate below 24 percent of its intake capacity or continues to serve only peaking units and that these units are not late r used as intermediate or baseload units. The operating conditions and parameters identified in the study will then be incorporated in the facility’s permit conditions. EPA estimat es that approximately 17 percent of intake structures will choose this alternative. f. Achieve ComplianceComply with the Numeric Impingement Mortality Performance Standard Facilities complying with th e BTA impingement mortality standards throughstandard by achieving the numeric performance standard alternative at § 125.94(c)(7) will perform monthly complian ce monitoring to verify that the annual average12 month percent impingement mortality rate resulting from operation of its intake is below the standard established in today’s final rule. (For more details on complying with the impingement requirements, see sectionSection VIII.) EPA expects that, save for future technologies or innova tions, few facilities will avail themselves of this option. 2. Entrainment Controls for Existing Units at Existing Facilities The BTA entrainment standard for the final rule set in placeestablishes a structureframework under which EPA or the State NPDES permitting authority must establish site-specific BTA entrainment requirements for each facility above 2 mgd DIF.in the scope of today’s rule. EPA considered promulgating no further controls to address entrainment mortal ity, and to rely instead only on the BTA impingement mortality controls, which would achieve up to a 3134 percent reduction in total AEI. EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 239 of 642 did not select this option as the basis for national BTA because, in EPA’s view, some facilities either are having a significant impact as a result of entrainment or might be able to do more to control entrainment at co sts that are low relative to benefits. In addition, EPA’s data on entrainment at facilities ar e not sufficient to allow the Agency to categorize facilities requiring no additional controls for entrainment. Thus, the final rule by requiring prescribed information in the permit application will provide the Director with adequate information for decision making. Requiring a structured site-specific analysis of candidate BTA technologies for en trainment control will a llow the Director to determine where it is appropriate to require such controls. One outcome of the sitespecific analysis could be th at the Director would determ ine that no other technologies beyond impingement control meet the criteriacontrols are required for selection as BTA , entrainment reductions, either because no other technologiesthey are not feasible and/ or theirbecause the social costs of additional co ntrol measures are not justified by the social benefits do not justify their costs.. In the case of site-specific entrainment c ontrols for facilities withdrawing greater than 125 mgd AIF, the final rule requires themfacilities to also develop and submit an entrainment characterization studyE ntrainment Characterization Study and related supporting information, as described in § 122.21( r)(9)-(13) of today’s rule, for use by the Director in establishi ng site-specific BTA. (Facilities at or un der the 125 mgd AIF threshold must still provide certain info rmation under the existing permit application requirements at § 122.21(r). The Director may also require these facilities to submit the studies at § 122.21(r)(9)-(13) if there is reasonable concern over entrainment impacts at*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 240 of 642 the facility.)For facilities above 125 mgd AIF that also meet the definition of closed-cycle recirculating systems at § 125.92(c), the Director may reduce or waive some or all of this information. EPA considered simply requiring this info rmation of all facil ities above 125 mgd AIF without authorizing Direct ors to reduce or waive this information. However, EPA also recognizes that, in some instances, th ese same facilities ha ve already minimized adverse environmental impacts significantly. In such cases, there may be limited value to the Director requiring a full benefit-cost an alysis, or even obtaining the Entrainment Characterization Study at (r)(9). EPA also considered not requiring this information of any facilities above 125 mgd AIF meeting the definition at § 125.92(c). First, EPA noted that even though these facilities meet the definition of a closed-cycle recirculating system, they may still withdraw at least 125 mgd, and in some instan ces withdraw consider ably more than 125 mgd. This is not an insubstant ial volume of water withdrawn for cooling, and in the case of inland waters this withdrawal may co mprise a large proportion of that source waterbody. In addition to withdrawing large vo lumes of water, EPA recognizes that some facilities, particularly those meeting the de finition at § 125.92(c)(2), potentially withdraw water at a rate similar to a once-through facility not w ithdrawing from an impoundment,with the potential to cause adverse environmental impacts similar to those of oncethrough cooling. The Director may find the information in § 122.21(r)(9)-(13) to be useful in determining whether additional c ontrols are warranted. In these instances, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 241 of 642 Director may decide to require the Entrainment Characteriza tion Study at (r)(9) first, in order to determine if other studies in (r)(10) to (13) are also warranted. Facilities at or under th e 125 mgd AIF threshold must still provide certain information under the permit application requirements at § 122.21(r). The Director may require additional information from these facilities including so me or all of the studies at § 122.21(r)(9)-(13) if there is reasonable conc ern regarding entrainment impacts at the facility. Where an owner or operator of a facility intends to comply with the BTA standards for entrainment using a closed-cyc le recirculating system as defined in § 125.92(c), the Director may reduce or waive some or all of this information. Facilities with a closed -cycle recirculating system as defined at § 125.92(c)(2) would still submit the studies at § 122.21(r)(9 )-(13) if they withdraw greater than 125 mgd AIF, and if the Director has not waived the requireme nts. These facilities have cooling systems that include impoundments of waters of the U.S. where the impoundment(s) was constructed prior to [ INSERT effective date of the final rule ] and lawfully created for the purpose of serving as part of the cooling water system. This purpose must be documented to the Director 's satisfaction in the project purpose statement of any required Clean Water Act section 404 permit obtaine d to construct the impoundment. In the case of an impoundment whose construction pre-dated the CWA requirement to obtain a section 404 permit, where alternative permitting documents were required, the facility must document the proj ect’s purposes to the satisfaction of the Director by some other license or permit obt ained to lawfully construct the impoundment for the purposes of a cooling water sy stem. EPA notes that for impoundments*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 242 of 642 constructed in uplands or not in waters of the United States, no documentation of a section 404 or other permit is required. EP A received comments that such impoundments should be treated as closed-cycle cooling a nd has agreed to make this change. The Director would still make the determinati on that make-up water withdraws have been minimized. Further, EPA’s data shows that many facilities that ut ilize impoundments as part of their cooling water systems may act ually use a combination of cooling water systems (for example, detailed survey re sponses showed eight facilities with an impoundment in addition to other IM technologi es). The requirement that these facilities provide the Director with certain informati on will help ensure that the Director has adequate information upon which to base a decision for these impoundments as to whether these facilities have adequate contro ls already or should be taking additional measures to protect the relevant waterbody. The Entrainment Characterization St udy will include information already collected to meet existing § 122.21(r)(4) requirements. In addition, under the new permit application requirements being added today at § 122.21(r)(5 )-() to ( 13), the facility will submit certain additional site-specific informa tion. This will include an engineering study of the technical feasibility and incremental costs of candidate entrainment mortality control technologies. The facili ty will also study, evaluate , and document the technical feasibility of technologies, at a minimum, including closed-cycle cooling, fine mesh screens with a mesh size of 2 mm or smalle r, and water reuse or alternate sources; [NOTE to reviewers: EPA would like to cite here as support for this material the draft DOE report on “U.S. Energy Sector Vulnerab ilities to Climate Change and Extreme*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 243 of 642 Weather” when it is public.] engineering cost estimates of all technologies considered; any outages, downtime, or other effects on revenue along with a discussion of all reasonable attempts to mitigate these cost f actors; and a discussion of the magnitude of water quality and other benefits, both mone tized and nonmonetize d, of the candidate entrainment mortality reducti on technologies evaluated. Fina lly, the information must include a discussion of the ch anges in non-water quality envi ronmental impacts attributed to technologies and/or operational measures considered. The factors include, for example, increases and decreases in the following: en ergy consumption, and ai r pollutant emissions including particulates and a ssociated human health and gl obal climate change impacts, water consumption, noise, safety (e.g., visibili ty of cooling tower plumes, icing), grid reliability, and facility reliability. For a thorough discussi on of these study requirements, see Section IXVIII . The final rule also requires peer review of the Comprehensive Technical Feasibility and Co st Evaluation Study, Benefits Valuation Study, and NonWater Quality and Other Impacts Assessment. Peer review of the Entrainment Characterization Study . is not required. Note that the peer reviewed studies will rely on data gathered in the Entrainment Characterization Study. Peer reviewers will be selected in consultation with the Director, who can also consult with EPA and federalFederal , State, and Tribal fish and wildlife management agencies with responsibility for fish and wildlife potentially affected by the cooling water intake structure(s). Under the final rule, EPA expects that the Director will review the candidate technologies for entrainment mortality control that, at a minimum, includes closed-cycle cooling and recirculating systems, fine-mesh screens . with a mesh size of 2 mm or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 244 of 642 smaller, and water reuse or alternate sources. In the decision about what additional entrainment controls (if any) to require, the Director will consider all the facility-specific factors in § 125.98(f)(2) and described above. At a minimum, the Director must provide a discussion explaining how issues concerning air emissions or land availability, insofar as they relate to the feasibility of adopti on of an entrainment technology, and remaining useful plant life, were addre ssed in the site-speci fic determination. Under the final rule, the Director must issue a written e xplanation for the basis of the BTA entrainment determination for each facility. EPA also expects that the Th e Director’s decision must include a written explanation willthat , at a minimum, includeincludes consideration of the following factors : (i) numbers and types of organisms en trained; (ii) impact of changes in particulate emissions or other pollutants asso ciated with entrainment technologies; (iii) land availability inasmuch as it relates to the feasibility of entrainment technology; and (iv) remaining useful plant life .; and (v) social costs and benefits, which may include qualitative, quantified and monetized categories. The Director may also base the proposed determination on seve ral other factors, including a review of the social costs (and not just the facility co sts—see Chapter 8 of the EA) of the various technologies; a review of the potential reductions in entr ainment and entrainment mortality;thermal effects and a review and analysis of moneti zed and nonmonetized benefitswater consumption

. In addition to the information required for development of impingement controls discussed above, under the authority granted to EPA in CWA sections 301, 308, 316(b), and 402, 401, 510regulation also requires, in the case of facili ties withdrawing greater*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 245 of 642 than 125 mgd AIF, the submission of certain other information for use in the site-specific entrainment determination of BTA will be based on a submission of certain other required information.. The final rule also adds the pe rmit application requirements at § 122.21(r )(7) and) (9)-(13) to require the facility to prepare several st udies, including an Entrainment Characterization Study, that will fu lly characterize the ex tent of entrainment at the facility. (For more details about the study, see belowabove ). In addition, under the final rule, the facility will provide detailed in formation on the other fa ctors relevant to the Director’s site-specific BTA determination. These will include information concerning the technologies available for control of such entrainment, the costs of controls, the nonwater quality environmental impacts of such controls, the monetized and nonmonetized benefits of such controls, and the presen ce of any threatened and endangered species. EPA encourages, and the CWA requires, the public to have a role in the permitting process.The final rule does not limit the Di rector’s discretion to consider non-water quality impacts in determining whether further entrainment measures are justified. EPA encourages, and the CWA requires, the public to have a role in the permitting process. Interested members of the public may submit written comments on a draft permit during the 30 day public notice and comment period and request a public hearing on a draft permit. For permits that are issued by EPA in stead of a state, addi tional opportunities for public involvement include comment, a nd in some cases, a public hearing on a permittee’s State Water Quality Certification under section 401 of the CWA. (See 40 CFR 124.10, 124.11, 124.12(a) and 124.17(a).) Therefore, the final rule clearly affords*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 246 of 642 the public a meaningful opportunity for partic ipation in the site-specific decision making to help ensure the soundness of both the information and subsequent determinations. 3. Impingement Mortality and Entrainmen t Controls for New Units at Existing Facilities Under the final rule, a new unit at an exis ting facility that withdraws more than 2 mgd will have requirements similar to the requirements of a new facility in Phase I. Under the rule, a new unit (as defined at § 125.92 and described above) is required to reduce flow commensurate with a closed-cycle recirculating system as would be applied to the new unit. As with Track II of the Phase I rule, a facility could demonstrate compliance with the new unit entrainment standards by establishing reductions in entrainment mortality for the new unit that ar e 90 percent of the reduc tions that would be achieved by closed-cycle cooling. EPA has promulgated requirements that esta blish two types of units that will be defined as a new unit at an existing facility. First, a newly built, st and-alone unit that is constructed at an existing facility (and that does not meet the definition of a new facility) will be defined as a new unit. Second, an existing unit that is repowered and undergoes significant modifications, to a degree where both the turbine and condenser are replaced, will also be considered a new unit at an existing facility. Under the second category, several types of modifications will not cause the unit to be considered as a new unit, thereby defining the unit as an existing unit. Also, the final rule excludes high energy efficiency units from the definition of new un its. In these cases, the existing unit will be regulated under the provisions applicable to existing facilities, and the unit will not be*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 247 of 642 subject to categorical requirem ents to reduce intake flow to a level commensurate with closed-cycle cooling. Where manufacturers may ge nerate electricity onsite , the previous discussion applies. Some manufacturers employ different industrial processes than an electric generator and therefore have different indus trial equipment (incl uding cooling systems). In the case of manufacturing equipment that does not generate el ectricity onsite, a new unit is defined as any newly built production unit or replacement unit where the majority of the waste heat-producing equipment that serves as sources of non-contact cooling water and the majority of the heat exchanging equipment that contribut es heat to the noncontact cooling water are newly installed or replaced. EPA is adopting more stringent requirements for new units at existing facilities because these facilities have the ideal o pportunity to design and construct the new units without many of the additional expenses and operational disadvantages associated with retrofitting an existing unit to closed-cycle cooling. H. Economic and Benefit Analysis for the Final Rule For example, the incremental downtime that can be associated with retrofitting to closed-cycle cooling is avoide d altogether at a new unit. In addition, when new units are added, the condensers can be configured fo r closed-cycle, reducing energy requirements and substantially reducing the turbine bac kpressure energy penalty. High-efficiency cooling towers can also be designed as part of the new unit, allowing for smaller cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 248 of 642 towers. As a result, the capital costs for inst alling closed-cycle cooling at new units are lower than the capital costs fo r installing once-through cooling. 91 (See DCN 10-6651.) As discussed below, the three factors that led EPA to reject closed-cycle cooling as BTA are far less relevant for new units at ex isting facilities than for retrofitting existing units. This section discusses why EPA conclude d that each factor is not a significant concern for new units, and why the record s upports EPA’s conclusion that closed-cycle cooling is an available and feasible technology for new un its at existing facilities.

 Land Availability: In contrast to existi ng units, the amount of space dedicated to closed-cycle for new units will be limited to the new unit rather than the entire facility. As a result, space constraints will be much less of an issue. New units also present the opportunity to design an optimized closed-cycle recirculating system for the new unit. Retrofitting an existing facility would require a facility to identify (or possibly obtain) enough space to accommodate the cooling towers and associated equipment. Furthermor e, new units and their corresponding cooling system can also be built in stages rather than as a facility-wide retrofit. In addition, rebuilt, repowered, or replaced un its are also considered new units with the exception of high energy efficiency units . Thus, there is always land available

91 EPA recognizes that a facility might use an existing intake to supply water for a new unit. In this case, the construction costs for a once-thro ugh system are notably smaller than those for a closed-cycle system. However, in terms of the total project cost over the lif e of the new unit, these costs differences are minimal.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 249 of 642 for repowering projects that are high ener gy efficiency units because they do not require land for wet cooling towers.

 Increased Air Emissions: EPA expects that emissions are less of a concern at new units. The condensers can be optimized for closed-cycle, reducing energy requirements, and high-efficiency cooling towers can be incorporated into the design of the new unit, potentially allo wing for smaller cooling towers to be installed. Turbine backpre ssure and the associated energy penalty can be substantially reduced in a new unit, but new units will still have auxiliary power consumption for fans. Therefore energy penalties a nd air emissions for tower operations can be minimized (though not eliminated). The effects of requiring closed-cycle cooling at new units at existi ng facilities is similar to the effects of this requirement at new facilities and w ill not pose an unacceptable impact. For more information, see Chapters 6, 8, and 10 of the TDD. Finally, to encourage repowering projects that are beneficial from both a wate r and air perspective, EPA is exempting rebuilt, repowered, or repla ced units that are high energy efficiency units from the closed-cycle requirement.

 Remaining Useful Plant Life: This is cl early not an issue for new units. A new unit has its full useful life remaining and thus would experience the maximum possible entrainment mortality reducti ons throughout that useful life. The considerations discussed above rega rding current transmission capacity for existing units would not apply in the case of installing new un its because there will be no downtime for new units, as they have not begun operating. Therefore, there is no*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 250 of 642 potential for local transmission capacity to be compromised. In fact, local transmission capacity is likely to be improved with the addi tion of the new unit, ev en if older units are later retired. In the final rule, EPA is excluding rebu ilt, replaced, and repowered high energy efficiency new units from the new unit entrainm ent standard applicable to other new units in order to create an incentive for their use. Information in the record indicates that the most effective way to reduce cooling water in take is through the us e of high efficiency units because these units re quire less cooling water pe r unit of energy produced. Repowering from lower efficiency units to high energy efficiency units could reduce water withdrawals by 50 percent for the same electricity output. [See DCN 12-XXX turn Air email and TT analysis into a memo.] Ot her environmental benefits result from the use of high efficiency units, such as re duced thermal loads to receiving waters, greenhouse gases, and decreased emissions of NOx, SO2, PM2.5 and Hg, depending on the baseline fuel and efficiency. Recognizing that section 316(b) confers “some discretion to determine the extent of reduction that is warranted under the circumstances” (See Entergy, 556 U.S. at 208) and recognizing the environmental benefits achieved by replacing less efficient units with high efficiency new units, the Agency has determined that requiring these high efficiency new units to incur the cost of the requirements for entrainment applicable to other new un its in § 125.94(e) is not warranted. EPA does not expect that the requirements for new units at existing facilities will be a disincentive for facilities to repower existing units. As described above, the requirements do not apply to hi gh efficiency new units. As de scribed in section II.H, EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 251 of 642 has crafted the definition of a new unit at an existing facility to only capture those facilities that undergo large-scale modificat ions (i.e., replacing both the turbine and condenser). As a result, smaller-scale repow ering efforts will be unaffected by the final rule. For facilities that do choose to repower an existing unit, the costs of employing a closed-cycle cooling system are not a barrier, as described above. In fact, some facilities may find closed-cycle cooling to be less costly over the long-term. EPA also recognizes that installing closed-c ycle cooling systems at new units is a prevailing trend in industry, re gardless of the regulatory re quirements imposed by today’s final rule. For example, see DCN 12-[XXXEIAdatamemo] in the record for today’s rule, and DCNs 2-009 and 4-4023C (from the Phas e I and Phase II dockets, respectively). These documents show that, on the basis of responses from facilities to the 316(b) industry questionnaire, facilities constructed in recent years are signif icantly more likely to employ closed-cycle cooling. EPA recognizes that at some point in the future, every unit will be rebuilt, replaced or repowered . EPA projects that approximately 0.5 new units per year, out of a total of 7.0 new units per year, will be s ubject to the new unit provision, reflecting the general industry trend toward s more efficient repowerings. EPA notes that the new unit provision is an important element of the final rule, given the generally long lifespan of equipmen t at industrial facil ities. For example, generating units at a power pl ant are often projected to ha ve a 50-year lifespan. As a result, these facilities have a slow rate of “evolution” in adopting newer technologies. By*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 252 of 642 requiring closed-cycle cooling in new units, EPA is contributing to the advancement of the time frame for the nationwide tr ansition to closed-cycle cooling. F. Economic Analysis for the Final Rule 1. Economic Justification for the Final Rule Pursuant to the principles spelled out in E.O. 12866 and E.O. 13563, EPA has assessed costs and benefits for the final rule and has reasonably determined that the benefits of the rule justify the costs. EPA has estimated the social cost of this rule to be $ 297275 million annually. For more information on EPA’s analysis of the rule’s costs, see Section IX. As described in more detail below in Section X , significant benefits are associated with the rule. These benefits include the annual reduction in impingement mortality of 576652 million age-one equivalents for existi ng units. There are, in addition, other important benefits, many of which EPA cannot quantify. These benefits include effects on many shellfish species and nonuse values associ ated with the vast majority of fish and shellfish. The rule also requires establishing site-specific entrainment controls through a process in which specific environmental c onditions and the loca lized benefits of entrainment reductions will be assessed along wi th the costs of controls. The information generated in the required st udies will enhance the transpar ency of decision making and provide an opportunity for meaningful public participation, ensuring that decision making is based on the best available data. Overall, these requirements and subsequent Director actions under this rule will foster protection a nd restoration of healt hy aquatic ecosystems that have important commercial, recreational, aesthetic and cultural values to their*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 253 of 642 surrounding communities. Many of the benefits that will result from the rule are not monetized or quantified, and as a result th e Agency’s monetized benefits analysis underestimates the totality of the rule’s be nefits. On the basis of the record, EPA has determined that the impingement mortality and entrainment controls will result in benefits that justify the costs of the rule. EPA also notes that it was able to genera te only a partial estimate of benefits for today’s rule. In particular, EPA’s analysis does not fully quantify or monetize certain potentially important categories of benefits, su ch as existence values for threatened and endangered species, secondary and tertiary ecosystem impacts, benthic community impacts, shellfish impacts and the impacts ar ising from reductions in thermal discharges that would be associated with closed-cycle cooling. Changes in fish assemblages due to impingement, entrainment and thermal effects are also not fully valued. These categories of benefits thatwhich are not fully valued are often refe rred to as nonuse benefits – i.e., benefits that people derive apart from the value of using an affected resource, such as fishing. For example, nonuse benefits would include the value that individuals place on knowing that an aquatic ecosystem is healthy. EPA conducted a nonuse benefits transfer for nonuse values using an ex isting valuation study, but was able to estimate values only for one based on a species for households in northeast and middle Atlantic statesthat represents less than one percent of adverse environmental impacts . EPA developed and implemented an original stated preference su rvey to estimate total values (use plus nonuse values) for aquatic resource improve ments under 316(b) regulatory options. However, EPA has decided not to haveemploy the SAB review the analysis of the stated*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 254 of 642 preference survey results , and address whether it is appropriate for use in site-specific purposes of decision

- making . and EPA has not accounted for values estimated from the survey in the quantitative comp arison of costs and benefits. It is also important to note that EPA’s stated preference survey was desi gned to estimate respondents' willingness to pay for changes in the health of fish populations and aquatic ecosystems and to be statistically representative at large (regional and national) scales; the results were not specifically designed to be statistically re presentative at the f acility level for the assessment of benefits for individual site-level permitting decisions. As noted at the outset, it is not alwa ys the case that private decision making regarding withdrawals of cooling water takes into account society’s preferences for fish protection, nor are there market transaction opportunities for private citizensindividuals to express their willing to pay for fish prot ection. Thus, despite th e limited information on monetized social benefits, EPA has concluded th at the benefits of today’s rule justify the costs of today’s rule. 2. Comparison of the PrimaryOther Options As discussed above, EPA considered three other primary options before selecting a modified version of Proposal Option 1for today’s rule. See Section VI.F Other Options Considered for more detaile d explanation of each option. Exhibit VI-1 illustrates a comparison of the total annualized social costs and benefits.
Exhibit VI-1. Comparison of the primary options for existing facilities316(b) ($2011 millions at 2013, 3% discount rate) Option Total Annualized Soci al Cost Monetized Benefits*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 255 of 642 Proposal Option 4 $ 261.7251.8 $ 20.231.0

Final Rule $ 283.3274.9 $ 20.432.8

Proposal Option 2 $ 3,999.73643.2 -$ 1,0441542 .6

GI . Site-Specific Consideration of Entrainment Controls As described above, EPA is not promulgating uniform national requirements for entrainment . for existing facilities. Instead, EPA is setting standards for entrainment that include a framework by which a facility will be subject to a site-specific determination by EPA or a State NPDES permitting authorit y of appropriate BTA requirements for entrainment. This section describes the process for determining section 316(b) requirements for an individual facility under the national BTA standard for entrainment. It describes the elements that the Director must consider in the permitting decision and how costs and benefits may be c onsidered in such an evaluation. 1. Implementation of a Site-Speci fic Evaluation of Entrainment for Existing Facilities The final rule requires a site-specifi c determination of BTA entrainment conditions in individual permits and pres cribes the requirements for that permitting proceeding. The final rule includes permit application requirements for facilities with a cooling water intake structure. These requireme nts are designed to elicit the information the Director needs to determine what is the best technology for reducing entrainment for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 256 of 642 a particular facility, includ ing information pertinent to an assessment of whether the benefits justify the costs of any particular contro l measures under consideration. Today’s final rule is a modification of Proposal Option 1’sthe proposed approach of a site-specific BTA entrainment determination. It will result in one of two outcomes at any facility:
1. Determination that the facility must insta ll additional control measures that reduce entrainment beyond that achieved by the cu rrently installed equipment. These may include closed-cycle cooling and/ or other technologies.
2. Determination that the facility’s current, existing technology for entrainment achieves the entrainment BTA requirements under the national BTA standard based on site-specific informati on not available to EPA today

. Thus, EPA expects that, under this approac h, there will be additional entrainment controls for some facilities and none for othe rs. Even where the Director’s determination requires no additional control measures, the Director may conclude the permit should include conditions that specify proper ope ration and maintenan ce of the installed technology. EPA notes that in a number of areas of the country (California, Delaware, New York, and New England; see, for exam ple, DCNs 10-6963 and 10-6841, and EPA Region I’s Brayton Point), permitting authorities ha ve already required or are considering requiring existing facilities to in stall or retrofit to closed-c ycle cooling systems. These facilities are still subject to the federaltoday’s rule but the stateexisting requirements have*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 257 of 642 been consideredtaken into accountin costing . Also, § 122.21(r)(1) and § 125.98(g) were added to address the application requirements and permit proceedings for the facilities... For facilities that withdraw more than 125 mgd, the rule generally requires that the facility conduct an ECS (Entrainment Characterization Study) entrainment study as part of its permit application. The study will indicate, at a minimum, the specific entrainment monitoringdata collection methods, taxonomic identification to the lowest taxon possible, latent mortality identifica tion, documentation of all methods, and quality assurance/quality control procedures for sa mpling and data analysis appropriate for a quantitative survey. The rule also requires a peer review of the Entrainment Characterization Study. Peer reviewers must be selected in consultation with the Director, who may consult with EPA and Federal, State, and Tribal fish and wildlife management agencies with responsibility for fish and wild life potentially affected by the cooling water intake structure. Data from the ECS entrainment study is important to provide corroboration of any through- plantfacility entrainment survival study results in § 122.21(r)(7) or from any other studies conducted. The final rule also requires the permit application to include the following information (foras part of the entrainment study (w hich refers to the requirements at § 122.21(r)(9) through (13), as opposed to the Entrainment Characterization Study at (r)(9)). For a thorough discussion of these st udy requirements, see Section VIII )::

 An engineering study of the technical f easibility and estimat ed costs of all candidate entrainment contro l technologies, incl uding closed-cycle cooling, fine-*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 258 of 642 mesh screens with a mesh size of 2 mm or smaller, and water reuse or alternative

sources;

 A discussion of any outages, downtime, or other effects on revenue along with a discussion of all reasonable attempts to mitigate these cost factors

 A discussion of the magnitude of water quality benefits, bothwhether qualitative, quantitative or monetized and nonmonetized , of the candidate entrainment reduction technologies evaluated ; thermal discharges ; and

 A discussion of the changes in non-wate r quality environmental impacts and other factors attributed to technologies and/ or operational measures considered, including, for example, increases an d decreases in the following: energy consumption; thermal discharges; air pollutant emissions including particulates and their health and environmental impact s; noise; safety (e .g., visibility of cooling tower plumes, icing); electric grid reliability, and facility reliability

. The permit application will provide the Di rector with information about options for entrainment reductions at the site a nd other possible avenues for addressing any adverse effects from entrainment. The purpose of the ECSentrainment study and other permit application materials is to assist the Di rector in better understa nding the effect of entrainment on species in the waterbody from which cooling water is withdrawn. More specifically, the ECSentrainment study will identify species that might be entrained, and estimate their baseline entrainment rates gi ven current entrainment controls. Moreover, the ECSentrainment study will include information about the aquatic ecosystem effects of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 259 of 642 entrainment of species, species that might be susceptible to thermal effects (including thermal barriers), and any threatened and endangered species whose range of habitat includes waters where the fac ility’s intake is located. An understanding of the potential ecosystem consequences of entrainment for species will help inform Director decisions about additional information re quired in the permit applica tion, or permit requirements for any possible additional technologies and management practices. EPA will endeavor to identify high-quality examples of ECSsentrainment studies as they are completed, and post them to its website for this rule as a resource for ECSstudy preparation. EPA’s benefits estimates were based on an extrapolation of available literature on impingement and entrainment studies; the specific entrainment characterization studyEntrainment Characterization Study prepared by a facility could lead to a different estimate of impingement and entrainment for th at facility relative to its share of EPA’s estimate in the analysis supporting this rule and in the record. Following the Director’s review of this information, the Director must determine what BTA entrainment requirement to propos e and explain in writing the basis for the draft permit. The draft permit will then be available for comment from the interested public under the Director’s normal permitting process. 2. Site-Specific Considerati on of Cost and Benefits In establishing performance standards for entrainment controlsrequirements under section 316(b) of the CWA , the Supreme Court in Entergy made clear that one factor that EPA may, but is not required , to , consider is the costs and benefits associated with various control options. That is, in setting standards, EPA may consider the benefits*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 260 of 642 derived from reductions in the adverse envi ronmental impacts associated with cooling water intake structures and the costs of achieving the reductions. As previously explained , following E.O. 13563 , EPA has determined that the benefits of the final rule justify its costs. In addition, EPA has explai ned (in Section II.C a bove) why consideration of

quantitative and qualitative social costs and benefits may be appropriate in the sitespecific determinations when es tablishing entrainment controls. In the site-specific pr oceeding, the Director maymust consider, among other factors , monetized , quantified and qualitative social bene fits and social costs of available entrainment controls, including ecological bene fits and benefits to any threatened or endangered species. The Director may be able to reject ot herwise available entrainment controls if the costs of the controls are not justified by their associated benefits (taking into account bothmonetized, quantified , and non-quantifiedqualitative benefits), and the other factors discusse d in the final rule. In making the site-specific entrainment BTA requirements determination, the final rule requires that the Director consider the information submitted under § 122.21(r) with the section 316(b) permit application. Further, in the case of the larger withdrawing cooling water intake structures ( 125 mgd AIF or greater), the rule will requirerequires submission of additional information including, studies on entrainment at the facility, the costs and feasibility of control options, and information on the monetized and nonmonetized benefits of entrainment controls. In evaluating benefits, the Director should not ignore benefits th at cannot be monetized or quantified or consider only the impingement and entrainment reductions that can be counted. To re sult in appropriate*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 261 of 642 decisions from society’s standpoi nt, the assessment of benefits must take into account all benefits, including categories such as recreational, commerc ial, and other use benefits; benefits associated with reduced thermal di scharges; reduced losses to threatened and endangered species; altered food webs; benefits accruing nonlocally due to migration of fish; nutrient cycling effects; and other nonuse benefits. Merely because it is difficult to put a price tag on those benefits does not mean that they are not valuable . and should not be included at least qualita tively in any assessment. The rule does not require the Director to require a facility owner or operator to conduct or submit a willingness-to-pay survey to assess benefits. Further, the rule does not limit the Director’s discretion to consider non-water quality impacts in determ ining whether further entrainment measures are justified. When some bene fits are not monetized, the requirement to consider costs and benefits in today’s rule does not mean the Director should base decisions solely on the monetized benefits and costs, ignoring the non-monetized bene fits. Instead, the Director should consider the costs and what the magnitude of the non-monetized benefits would have to be in order to justify the costs. A nationalAn aggregate evaluation of benefits ( no matter howeven if accurate) would fail tonot account for the variations in benef its from location to location. On the basis of available information, EPA’s analysis of benefits relied on extrapolating data from existing impingement and entrainment charact erization studies to al l facilities in the same region on a flow-weighted basis. Differen ces in species, life st ages, and biological abundance across intake locations (even within a region) could lead to very different results for a site-specific analys is of a facility as compared to that facility’s share of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 262 of 642 national costs and benefits, even if the na tional results are, on average, accurate. A national assessment tends to mask variations in benefits and costs from different geographical locations for differe nt water bodies. For example:

 Some fish species at coastal facilities ha ve biological spawni ng attributes that differ from those at other locations.

 The proportion of the receiving water w ithdrawn for cooling could also vary among sites.

 The values that communities place on their resources could vary from site to site.

 One ecological environment might experi ence large masses of hardier eggs and larvae subject to potential entrainment; another will have fewer but less hardy eggs and larvae susceptibl e to entrainment. Without detailed study information, it’s difficult to ascertain which facility hasecological environment faces the greater adverse environmental impact from a similar cooling water intake

. The resulting differences in the value of reduced entrainment—which could be dramatic for some sites—necessarily disappear in a national aggregation of results. The Agency has decided that this masking of va riation in benefits further supports EPA’s decision to require considerat ion of the site-specific bene fits of entrainment control technologies in the site-s pecific process to establish entrainment controls. The Director must then explain the basis for rejecting an available technology not selected for entrainment control in light of the submissions af ter consideration of the three of the four factors that supported EPA’s determ ination not to establish a uniform*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 263 of 642 national entrainment standard ba sed on closed-cycle cooling. EPA expects thatThe Director also must base the Director’s decisiondetermination about BTA controls will also reflecton the number and types of orga nisms entrained, includ ing Federally-listed, threatened and endangered species and designate d critical habitat (e .g., prey base) as well

as consideration of the site-specific social costs and benefits (monetized and nonmonetized) of the various control tec hnologies considered for the facilities. As noted, the Director may reject an otherwise available entrainment technology as the BTA requirement (or not require any additional BTA controls) if the social costs of the controls are not justified by the social benefits . (monetized and nonmonetized). EPA decided to adopt this approach in determini ng site-specific entrainment controls because it is permissible under Entergy , under E.O. 13563, and consistent with the more than 30- year history of section 3 16(b) permitting decisions and E.O. 13563

. This history illustrates the role that cost/benefit considerations have played. As early as 1977, EPA issuedin a permitting decision and a General Counsel opinion that explained that, while section 316(b) does not require a formal cost-benefit analysis, the relationship of costs and benefits may be considered in 316(b) decision making. In re Pub. Serv. Co. of N.H. (Se abrook Station, Units 1 and 2) , No. 76-7, 1977 WL 22370 (June 10, 1977), remanded on other grounds, 572 F.2d 872 (1st Cir. 1978); accord In re Central Hudson Gas & Elec. Corp., Op. EPA Gen. Counsel , NPDES No. 63, 1977 WL 28250, at *8 (July 29, 1977). In the more than 30 years since, EPA and stateState permitting authorities have considered the relationship between costs and benefits to some extent in making individual permitting decisions. See, for example, In re Pub. Serv.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 264 of 642 Co. of N.H. (Seabrook Station, Units 1 and 2) , No. 76-7, 1978 WL 21140 (E.P.A. Aug. 4, 1978), aff’d, Seacoast Anti-Pollution League v. Costle , 597 F.3d 306, 311 (1st Cir. 1979). Because E.O. 13563 directs agencies to propose and adopt rules only upon a reasoned determination that the benefits justify the costs, EPA is allowing for this same consideration into be applied at the national BTA standard unde r Section 316(b) of the Clean Water Act.permit level. This approach is consistent with the historical application of section 316(b) approach EPA has traditionally followedrequirements and will allow for a full assessment in permit decisions of bot h qualitative and quantitative benefits and costs. As designed, EPA’s requirement for the establishment of site-specific BTA entrainment requirements strikes an appr opriate balance between environmental improvements and costs, allowi ng the Director to consider all the relevant factors on a site-specific basis and determine BT A on the basis of those factors. After considering the factors relevant to a site, the Director must establish appropriate entrainment controls at those facilities. The Dire ctor must review available control technology and may reject otherwise available entrainment controls as BTA if the social costs of the controls are not justifie d by their social benef its (taking into account both quantified and non-quantified benefits) or if the Director concludes that there are other unacceptably adverse factors that cannot be mitigated. The rule also provides that the Director may not reject an otherwise av ailable technology as a basis for entrainment requirements based on a comparison of social co sts and social benefits if the facility failed to provide the required inform ation under § 122.21(r) related to benefits. As*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 265 of 642 designed, EPA’s national BTA standard for es tablishing site-specific BTA entrainment requirements strikes an appr opriate balance between environmental improvements and costs by selectively requiring closed-cycle co oling or other entrai nment technologies at some facilities, without requiring the same technologies at all facilities. 3. Potential Cost for Site-Sp ecific Entrainment Controls For the proposed rule, EPA prepared a brief economic analysis ofanalyzed possible additional costs associated with reduc tions in entrainment mortality that might result from the Directors’ determinations of site-specific BATBTA requirements. Because this process will play out over a number of years as Directors consider water bodywaterbody -specific data, local impacts, a nd public comment, and weigh land availability, air quality impacts, and remaining useful life, those esti mates of the costs of site-specific determinations wereare highly speculative. EPA is not costingpresenting specific cost estimates today for prospective entrainmen t requirements because we do not have in hand the robust data that will be generated for individual site-specific settings as part of the process that isrequired under the national BTA standard for entrainment. Without that refined information on a site-specific basis, EPA has no basis for prejudgingability to predict Director decision

- making and therefore, the Agency is not estimating costs associated with the ultimate entrainment requirements. Similarly and for the same reasons, EPA did not estimate co sts associated with requirements at § 125.94(g), 125.94(c)(8) or 125.94(c)(9). EPA estimates that the best performingmost effective technology for reducing entrainment , closed-cycle cooling, is not available to at least one quarter of all facilities*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 266 of 642 because of geographic constraints, air permitting restrictions in a nonattainment area and remaining useful life . of the facility. EPA has very limited information on which facilities these are, despite the certainty that thethese availability concerns are real and significant. In addition, EPA does not have in hand the site -specific data that wi ll be generated as a result of today’s rule. If EPA had this da ta, it would be possible to estimate the costs and benefits ultimately associated with the Director s’ site-specific determinations under the national BTA standard for entrainment. Th e hypothetical costs ge nerated at proposal were reported in an attempt to signal that EP A neither expects that zero facilities would be subject to closed-cycle cooling as a re sult of the site-specific BTA process for entrainment, nor that the oldall facilities at which these t echnologies are feasible would be subject to closed-cycle cooling requireme nts. Without the site-specific information, there is significant uncertainty around any es timates EPA could generate of these costs (including those reported at proposal ).) and benefits.

VII. Response to Major Comments on th e Proposed Rule and Notices of Data Availability (NODAs) Over 1,100 organizations and individuals submitted comments on a range of issues in the proposed rule, including over an additional 62,000 letters from individuals associated with mass letter writing campai gns. An additional nearly 250 comments were received on the two NODAs. Responses to a ll comments, including those summarized here, are in the Response to Comments document in the official public docket . (see DCN 12-0004). To facilitate a more comprehensive response and to simplify the task of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 267 of 642 discussing EPA’s rationale for promulgating th e final rule, EPA is responding to these public comments in essay form. Each topic ar ea discussed in the comment letters has been addressed in one of the comprehensive essay responses. The major comments received and EPA’s responses ar e summarized in this section. A. Scope and Applicability 1. Source of Water – Impoundments Many commenters expressed concern that the proposed rules do not adequately address the unique water bodies resulting from the many man-made reservoirs specifically designed and constructe d as cooling water impoundments ( definedreferred to as cooling ponds in the proposed rule). Co mmenters expressed confusion regarding the applicability of the proposed regulations to intakes onbecause impoundments have both intakes from the impoundments and the intakes that supply water to the pondsimpoundment . Many requested that EPA clarif y that man-made impoundments, built to supply water for power plants, do not constitute water of the United States for purposes of implementing the rule or that th ey should be classified as meeting the definition of closed-cycle cooling. Response: As discussed in Section I, faci lities that withdraw cooling water from impoundments that are waters of the United States and that meet the other criteria for coverage (including the requireme nt that the facility has or w ill be required to obtain an NPDES permit) are subject to today’s rule.o therwise meet the criteria for coverage (including the requirement that the facility has or will be required to obtain an NPDES permit) are subject to today’s rule. Revisions to the definition of waters of the U.S. are*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 268 of 642 outside the scope of this rulemaking. However, today’s regulatory definition of closedcycle recirculating systems specifies that such a system may include impoundments of waters of the U.S. where the impoundment was constructed prior to t oday’s final rule. To meet the rule definition for closed-cycle recirculating system, this impoundment must have been lawfully created for the purpose of serving as part of the cooling water system as documented in the project purpose stat ement for the Clean Water Act section 404 permit obtained to construct the impoundment . In the case of an impoundment whose construction pre-dates the CWA requirement to obtain a section 404 permit, EPA expects documentation of the project’s purpose to be demonstrated to th e satisfaction of the Director. This documentation could be some other license or permit obtained to lawfully construct the impoundment for the purposes of a cooling water system, or other such evidence as the Director finds necessary. The definition of closed-cycle recirculat ing system at § 125.92(c)(1) of today’s rule also specifies that impoundments that are not waters of the United States but withdraw make-up water from waters of the U.S. meet the definition of a closed-cycle recirculating system, if make-up wit hdrawals have been minimized. These impoundments are constructed in uplands, and are not required to obtain a 404 permit. Thus, these impoundments do not need to provide documentation of the project’s
purpose. 2. New Units In the proposal, EPA defined new units as newly built units added to increase capacity at the facility. The definition di d not include any rebuilt, repowered or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 269 of 642 replacement unit, including any units where the generation capacity of the new unit is equal to or greater than the unit it replaces. Many industry stakeholders agreed that the definition of new units should not include re powered existing units. Others thought that new units should be treated similarly to exis ting units with entrainment standards applied on a site-specific basis and that the nine pr oposed factors should also be applied to entrainment decisions for new units. Envi ronmental organizati ons argued that EPA should set a deadline by which all existing facilities must comply with the new unit standards and that EPA’s ex clusion of repowered/rebuilt plantsfacilities created a loophole through which existing facilities could perpetually operate as an existing unit, even after replacing all of th e generating equipment. Many of the comments had several elements in common:

• Requirements should be flexible enough to address sites where meeting the requirements is not technically feas ible (e.g., limited la nd availability).

• EPA needs to provide greater clarity re garding how new unit standards apply to manufacturing facilities.

• The DIF is a more approp riate parameter for determining compliance because AIF cannot be determined until after the system is built, and baseline AIF would require assumptions about as-yet undetermined operational factors.

• It is unclear how the new unit requireme nts will be applied to manufacturing units, and the requirements do not appear to consider the circumstance where a new unit is constructed at an existing ma nufacturing facility where construction of the new unit does not require any modificati ons to the existing intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 270 of 642 • Some commenters have noted that the new unit provisions are a departure from previous determinations and are unclear . They argue that they have not had adequate opportunity to comment on this issue and request EPA re-propose new unit requirements if it wants to continue with this initiative. Response: EPA's definition of a "new unit" for the final rule can be found at § 125.92 .(u). New units include "any additional unit that is includes the addition of a standalone unit where a new condenser and turbine are built and that that is constructed at an existing facility. For purposes of this subpart,The ru le definition makes it clear that the new unit may be for the same general industria l activity as the existing facility. Because the requirements are much lik e the Phase I requirements for new unit includes any rebuilt, repowered or replacement unit wher e the turbine and condenser have been replaced as partfacili ties the costs for installing controls at new units are similar to the costs imposed on new facilities. The cooling water withdraws made by the rest of the rebuilding, repowering or replacing, except in th e case of high energy efficiency units." existing facility are subject to the requirements at 40 CFR 125.94(c) and (d). With respect to entrainment, the final ru le requires that new units achieve flows commensurate with that of a closed-cycle recirculating system. With respect to entrainment, the final rule requires new un its comply with the same BTA impingement mortality standards as existing facilities. With respect to impingement mortality and entrainment, the final rule requires, at § 125.94(e)(1), that new units achieve flows commensurate with that of a closed-cycle r ecirculating system. As with the new facility Phase I rule, the new unit may choose to meet an alternative requirement at 40 CFR*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 271 of 642 125.94 (e)(2) and demonstrate to the Director that the technologies and operational measures employed will reduce the level of adverse environmental impact from any cooling water intake structure used to supply cooling water to the new unit to a comparable level to that which would be achieved upon implementing closed-cycle recirculating for that new unit. This in cludes a demonstration showing that the entrainment reduction is equivalent to 90 percen t or greater of the reduction that could be achieved through implementing a closed-cycle recirculating system. This demonstration must also include a showing that the impact s to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if the facility were to implem ent a closed-cycle r ecirculating system. Facilities may choose to in stall a closed-cycle recirc ulating system, and EPA has observed that many new units are selecting cl osed-cycle recirculating systems on their own, particularly for combined cycle and na tural gas for reasons unrelated to 316(b) (such as water availability). In these cases, benefits related to reductions in IM&E would be expected to occur. Finally, for new units at existing facilities, the Director may establish alternative requirements if the data specific to the f acility indicate that compliance with the requirements of paragraphs (e)(1) or (2 ) of § 125.94 for each new unit would result in compliance costs wholly out of proportion to th e costs EPA considered in establishing the requirements at issue, or would result in significant adverse impact s on local air quality, significant adverse impacts on local water resources other than impingement or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 272 of 642 entrainment, or significant adverse impacts on local energy markets. This provision is identical to that provided in the Phase I new facility rule.

B. Proposed Amendments Related to Phase I Rule Commenters suggested that restoration be allowed in a range of situations, including where a nuisance species is a probl em that will get worse with the use of cooling water intake structur e technology, where affected species are not species of concern in man-made lakes, and to reduce th e cost of meeting 316(b) requirements (i.e., offset losses). Response: The Second Circuit found that EPA exceeded its authority by allowing facilities subject to CWA section 316(b) to comply with section 316(b) through restoration measures and, thus, EPA has delete d these provisions from the regulations at §§ 125.84 and 125.86 to make the rule consis tent with the court decisions. C. Environmental Impact Associated with Cooling Water Intake Structures Many commenters expressed concern that limited scientific evidence exists that measureable aquatic population or community effects occur as a result of cooling water withdrawals and that impingement mortalit y and entrainment mortality requirements should not apply unless adverse environmen tal impacts are demonstrated. They also noted that not all environmental impacts are adverse. For example, removal of invasive species or quickly reproducing sp ecies might not be harmful. Response: EPA disagrees. The evidence s hows that the total number of aquatic organisms lost annually is 2.2 billion.in the hundreds of b illions, or is 1.9 billion on an*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 273 of 642 age-one equivalent basis. Additional data provided in co mments shows aquatic organisms are lost through impingement and entrainmen t by all types of cooling water intake structures. The data demonstrates that the eff ects of cooling water intake structures on the aquatic environment are significant and wide spread. In addition, there is documented evidence of population level effect s of cooling water intakes fo r certain species in certain instances. See, for example, 69 FR 41587 (, July 9, 2004 ) for a discussion from the 2004 Phase II rule. Also, Bayshore, Indian River and In dian Point are discussed in the BA for the final rule. D. EPA’s Approach to BTA 1. Relationship of Costs and Benefits Many commenters expressed concern that th e proposed rule’s costs significantly outweigh the benefits and that studies, technology modifications, monitoring, and reporting should not be required if costs exceed benefits. Response: While the rule costs exceed th e monetized benefits as presented, EPA has concluded that the costs do not outwei gh total benefits when both monetized and nonmonetized benefits are considered. EPA not es that the monetized benefits are only a subset of all benefits. In the absence of complete estimates of nonuse benefits, EPA estimated partial nonuse benefits for the final rule using the benefits transfer approach from proposal. This approach is still a partial estimate, because it concerns only one the nonuse benefits transfer was based on a species in two coastal regionsthat represents less than one percent of adverse environmental impacts . With respect to entrainment, the rule authorizes the Director to c onsider costs versus benefits on a site-specific basis. With*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 274 of 642 respect to impingement mortality, the rule provides seven compliance alternatives based on a set of widely used, demonstrated, prove n technologies, many of which have been in use for decades and whose efficacy is well supported in EPA’s record. 2. Site-Specific approach Many commenters agreed with EPA’s site -specific approach for entrainment mortality requirements but argue d that the same approach should also be applied to impingement mortality requirements. State agencies and environment organizations are concerned that the site-specific entrainm ent determinations will create additional administrative burdens on already overex tended permitting authorities which could exacerbate permit backlogs. Response: EPA does not agree that impinge ment mortality is best addressed by the same approach adopted for entrainment. This is because EPA has been able to identify low-cost technologies that are available, feasible and demonstrated for impingement mortality nationally. EPA has not been able to identify an available, feasible and demonstrated technology nati onally for entrainment, and therefore has adopted as its national BTA entrainment standa rd a structured process for determining on a site-specific basis what entrainment cont rols are the best technology available at a particular facility. EPA agrees that site

- specific entrainment has potential to create additional burdens for states, but EPA has tr ied to limit this burden by simplifying its information collection requirements from t hose at proposal. EPA has streamlined the information collection requirements so that information necessary for the Director to make a BTA determination is submitted by the permittee in the permit application early*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 275 of 642 in the process, thus minimizing the number of transactions between permittee and the Director.
E. BTA Performance Standards 1. Impingement Standards EPA received a substantial number of comments on how the final rule should address impingement mortality. EPA based its proposed an impingement mortality standards standard based on the performance of modified traveling screens with fish handling and return that required achievem ent of a numeric IM performance standard . As an alternative EPA proposed that a facility co uld demonstrate that e ither the design intake velocity or the actual intake velocity at its operation was less than 0.5 fps. Most of the commenters, including members of the U.S. C ongress, state and local elected officials, and industry stakeholders, requested additi onal flexibility in complying with the impingement mortality standards. While the proposal would not specifically require the use of modified traveling screens with a fi sh handling and return system to meet the impingement mortality limitsstandards , some commenters interpreted the proposed rule as requiring this. EPA proposed impingement mortality limitsstandards that were expressed as a monthly average and an annuala 12-month average. EPA recognizes, however, that some regulated entities might find a techno logy-based compliance option, rather than a performance-based approac h, more attractive. Such an approach, particularly the specificati on of pre-approved technologies, could offer higher regulatory certainty, easier demonstration of complia nce, and might offer a less expensive alternative because of reduced monitoring re quirements associated with pre-approved*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 276 of 642 technologies. Some commenters viewed the proposed impingement mortality limitstandard as overoverly stringent and requested that EPA establish alternative impingement mortality standards, including site-specific impingement mortality requirements similar to those proposed for en trainment. Other commenters provided data pertaining to the performance of technologies, including modifi ed traveling screens used as the basis for the impingement mortality limit.performance standard. Several industry stakeholders stated that, despite EPA’s best intentions, the proposed rule applied a onesize-fits-all approach for impingement morta lity. While all the suggested changes to the proposal seek to provide additional flexibility through a variety of approaches, most of the comments had several elements in common:

• Commenters suggested definingDefining modified traveling screens as a preapproved technology or otherwise streamlin ing the NPDES process for facilities using the candidate technology on whic h BTA is based. Thus, EPA would designate certain technologies or cert ain conditions as complying with the impingement requirement.

• Providing a mechanism to identify other te chnologies that perform comparably to modified traveling screens.

• Modifying the proposal so that facilities that have already reduced the rate of impingement could obtain credit toward the impingement mortality standard.

• Developing a more tailored appro ach to protecting shellfish.

• Creating alternatives for facilities with ve ry low (de minimis) impingement levels or mortality rates.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 277 of 642 • Providing additional clarity on species of concern as it pertains to demonstrating compliance with the numeric impingem ent mortality performance standard.

• Reevaluating the impingement mortality limitsnumerical performance standards

. In addition, as noted above, EPA also r eceived a number of comments suggesting that it adopt a site-specific approach to re ducing impingement mortality similar to the proposed approach for addressing entrainment, rather than uniform national requirements for impingement mortality and a site-specific approach for entrainment only. Many commenters expressed concern that th e entrapment requirements were not well defined and would require co stly technologies that are not considered in EPA’s cost estimates and could be difficult to comply with, particularly where cooling systems employ impoundments or basins downstream of the initial in take structure. Response: See the earlier discussion at Section VI.C.1 concerning how EPA determined the numeric impingement mortal ity performance standard. Additionally, see theearlier discussion at Section VI.E.1 for an explanation of how EPA revised the impingement mortality standard to provide seven alternatives for compliance. EPA agrees that specific entrapment requirements are not necessary and requirements for facilities to deploy technologies to avoid en trapment have been deleted from the final rule. However, a facility th at entraps fish must count the entrapped organisms as impingement mortality. 2. Entrainment Standards A substantial number of commenters suppor ted EPA’s site-specific approach for entrainment standards. Suggested revisions to the approach in cluded the following:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 278 of 642 • EPA should recognize the value of water bodywaterbody -based requirements, including withdrawals on lakes/reservoirs a nd less than 5 percent of rivers as not requiring entrainment mortality.

• Units with a low capacity utilization of less than 15 percent should be exempt from entrainment mortality.

• Facilities with AIF of less than 125 m gd should be presumed as entrainment mortality compliant.

• EPA should consider entrainment survival. Response: With respect to water bodywaterbody -based requirements and capacity utilization thresholds, EPA disagrees w ith commenters suggestions. There is no fundamental difference in technological perfor mance based on waterbody so there is no need to subcategorize based on water body. EPA found that low CUR facilities are generally peaking plants that operate at full capacity for a few months. If that period ofportions of days during a few months or less. Further, EPA found that some sites continue to withdraw water through their c ooling water intake structure even when no power is being generated. If that period of cooling water intake operation corresponds with times when spawning is occurring, those facilities could have significant impacts from impingement and entrainment. Therefore, simply being a low CUR unit does not imply no adverse environmental impacts. In stead, EPA found that low CUR should be looked at more closely on an individual uni t basis. EPA has included a provision in the final rule that states where a generating un it has an annual averag e capacity utilization rate of less than 8 percent averaged over a 24-month block contiguous period, the owner*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 279 of 642 or operator may request that the Director establish less stringent standards for IM. With respect to facilities below 125 AIF bei ng considered entrainment compliant, EPA disagrees with the comment since any facility at any flow may have an adverse environmental impact. With regard to entrainment survival, EPA does allow for consideration of entrainment survival. The monitoring requirements for entrainment for new units at § 125.96(d)( 23 ) states that mortality after passing the cooling water intake structure must be counted as 100 percent mo rtality unless you have demonstrated to the approval of the Director that the mortality for each species of concern is less than 100 percent. 3. Closed-Cycle Cooling Both industrial stakeholders and many stat e agencies endorsed an approach that deems facilities with closed -cycle cooling to be in compliance with the BTA impingement mortality standard, and eligible for reduced monitoring and reporting requirements. Most industrial stakeholders agreed with the EPA decision that closedcycle cooling should not be imposed as a national BTA standard. They argue that although closed-cycle cooling might be avai lable and achievable at many facilities, requiring closed-cycle coo ling nationally has numerous drawbacks including the following:

• Requirements for closed-cycle flow re duction do not take into consideration ofthe site-specific limitations at some fac ilities (e.g., blowdown wate r quality, scale, fouling problems).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 280 of 642 • Cooling towers would result in significant adverse impacts from fine particulates, carbon dioxide emissions, evaporativ e water loss, and other issues. Commenters expressed concern that the proposed definition of a closed-cycle recirculating system is far more restrictive th an the definition used in the Phase I rule. It includes only systems that withdraw make-up flow intermittently, are designed to operate above minimum COC, reduce fl ow by a specified percentage (depending on whether salt ofor fresh water), and did not include impoundment s that are waters of the United States. Some commenters stated that while they might have been effectively operating as closedcycle units for many years, they have concerns with their ability to comply with the definition in the proposal, particularly with respect to the specified COC. Response: EPA agrees that facilities employing a closed-cyc le recirculating system for entrainment should also be deemed in compliance with the impingement mortality standard, as long as the system is properly operated. While a closed-cycle recirculating system is the best performingmost effective technology , however for reducing entrainment , EPA has not established BTA based on closed-cycle cooling because the technology doesEPA concluded it was not represent BTA, for the reasons specified in Section VI. Regard ing the definition of closed-c ycle cooling, EPA identified two parameters that demonstrate proper operation: flow reduction and cycles of concentration. To provide flexibility, EPA has removed the numeric levels of the metrics as threshold, while retaini ng the minimized makeup flows aspect of the definition. Therefore while the definition in this final ru le does not establish fixed limitsrequirements in terms of COC and comparable pe rcentage flow reduction to qualify*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 281 of 642 as a closed-cycle recirculating system . Rather , the rule provides that a closed-cycle recirculating system “generally” will achieve the specified benchmarks that characterize a properly operating closed-cycle cooling sy stem. EPA further recognizes that certain unavoidable circumstances could exist wher e the specified COC or percent reduction values might not be achievable. Such site-spe cific circumstances coul d include situations where water quality-based discharge limits might limit the concentration of a pollutant that is not readily treatable in the cooling tower blowdown or situa tions where the source water quality could lead to unavoidable problems concerning scale formation, solids buildup, corrosion, or media fouling. If a fac ility can demonstrate th at these occurrences are unavoidable, under the definition in the fi nal rule, the Director may determine that such a facility is a closed-cycle recirculat ing system, taking into account the site-specific circumstances. In addition, EPA has explaine d how the conditions added to the existing facilities definition do not in effect make it mo re stringent than the Phase I definition of closed-cycle recirculating systems. The auxiliar y electricity a facility uses to run the fans in a closed-cycle system is el ectricity the facility can’t sell. The opportunity cost to the facility of using that electricity to run the fans is the forgone re venue they would have been able to earn if they had run their c ooling water system in once-through mode. The forgone revenue provides the incentive for a faci lity to run its closed-cycle system in once-through mode, rather than in closed-cycle mode. Thus , EPA adjusted the definition of a closed-cycle recirculating system to be appropriate for retrofit situations.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 282 of 642 F. Implementation Many commenters expressed concern that the compliance timeline for impingement mortality and entrainment requirements should be synchronized to prevent a facility from having to in stall technology to comply with impingement mortality requirements and then later be required to install entrainment mortality technology. Response: To address this concern, EPA revised the impingement mortality compliance requirements to provide that afte r issuance of a final permit establishing the entrainment requirements under § 125.94 (d), the owner or operator of an existing facility must comply with the impingement mortalit y standard in paragr aph § 125.94(c) as soon

as possiblepracticable . When the Director establis hes a compliance schedule under § 125.94(d), the schedule must provide for compliance as soon as possiblepracticable

. Thus, EPA has synchronized decision maki ng about technology requirements, avoiding situations where investments in IM cont rols would later be rendered obsolete by entrainment control requirements. G. Costs 1. Impingement Mortality Technology Costs Commenters expressed concern about th e approach for technology assignments used to estimate compliance with the impi ngement mortality standards and generally asserted that costs were underestimated. These concerns included the following:

• The EPA incorrectly assumed traveling sc reens were an available technology at most facilities.

• EPA underestimated the costs of modified traveling screens.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 283 of 642 • EPA underestimated the difficulty and costs of installi ng fish returns. Response: EPA disagrees that traveling sc reens are not an available technology at most facilities; survey data pr ovided by industry shows that 93 % percent of generators and 73 % percent of manufacturers already have screen s. EPA agrees that some facilities may not be able to readily upgr ade their screens to modified traveling screens with fish return, but that the vast majority can. EPA has updated the estimated costs of th e rule to reflect the difficulty of installing fish return and adjusted the cost of modified traveling screens to reflect most recently available vendor data. Specifica lly, EPA reviewed the cost methodology and made a number of revisions including the following:

• EPA revised the technology assignment such that only those model intakes that have existing traveling screens are assi gned modified traveling screen costs.

• EPA increased the estimated capital cost s for modified traveling screens by 20 percent.

• EPA increased the estimated capital costs of fish returns and provided for an additional increase for facilities whose in takes would be difficult to install fish

returns. For further discussion, see Secti on IX and the TDD (Chapter 8). 2. Entrainment Mortality Technology Costs Industrial stakeholder commenters argued that closed-cycle cooling costs are underestimated and the cost analysis fails to include any costs for entrainment requirements. Riverkeeper argued that the EPA closed-cycle costs are overestimated.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 284 of 642 Response: For both the proposal and this final rule, EPA revised the methodology for estimating closed-cycle costs from what was used for Phase II and Phase III. EPA’s revised methodology is based on the cost methodology provided by the Electric Power Research Institute (EPRI). EPRI based its cost methodology on over 50 actual and planned closed-cycle cooling system retr ofits and EPA concluded that these cost estimates better reflect actual costs. EP RI has updated their closed-cycle cost methodology since EPA adoption of the earlie r version and provided an estimate of closed-cycle costs for generators with a design flow above 50 mgd (See DCN 12-
XXX6807 ). A comparison between the EPRI esti mates and comparable EPA estimates indicate that the EPA capital and downtime costs are somewhat lower than the EPRI estimates, while the EPA energy pena lty costs are higher. (See DCN 12- XXX Memo comparing EPRI and EPA costs6656 .) While Riverkeeper cites actual costs from retrofit projects completed in 1998 and 2002 to support the argument that EPA’s capital costs are overestimated, EPA has identified more recent closed-cycle retrofits where the capital costs were much higher than the EPA average, suggesting that the costs used by EPA in the final rule are representati ve of the range of costs that may occur nationwide. (See
DCN 12- XXX Memo comparing EPRI and EPA costs6656 .) Thus EPA considers its closed-cycle costs to reasona bly reflect actual costs. EPA also received estimated costs for closed -cycle retrofits at small, medium, and large manufacturing cooling systems from the American Chemical Council (ACC). A comparison of these costs to comparable EPA estimates indicated that for larger systems the costs are mostly in agreement but that for smaller systems (e.g., 5,000 gpm), the EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 285 of 642 cost estimates are lower. EPA’s acknowledge s its methodology uses a linear approach and does not fully account for the increased co sts associated with the diseconomies of scale at the lower end of the spectrum of system sizes. Under EPA’s selected option, compliance for entrainment reduction requirements is established on a site-specific basis. Because no particular result is prescribed under this approach, it is difficult to ascr ibe compliance costs for this as pect of the rule without the site-specific information that will be generate d as a result of the national BTA standard for entrainment decision-making established by today’s rule. For Proposal Options 2 and 3 where closed-cycle cooling would be require d, EPA did estimate costs for closed-cycle cooling. EPA has not estimated what site

- specific determinations will be made as part of the analysis. H. Monitoring and Reporting 1. Velocity Monitoring Many commenters explained that it would be difficult to directly measure through-screen velocity for screen technol ogy and agreed with the suggestion in the NODA that EPA should allow for calculation of through-screen velocity. Also, many were concerned that a velocity limit based on minimum water levels would be difficult to comply with. Of concern are extreme conditi ons that are beyond the facility’s control (e.g., low water due to drought). Response: EPA agrees that direct measur ement of intake velocity on a traveling screen may be problematic in some circumstan ces, and the final rule allows intakes to comply with the low velocity standardsIM compliance alternatives by either calculation*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 286 of 642 or direct measurement. Compliance will be demonstrated through monitoring and reporting of actual or calculated intake veloc ities. Short-term exceedances of the velocity standard may be permissible for brief periods, w ith Director approval, for purposes of maintaining the cooling water intake system, such as backwashing the screen face. EPA expects that facilities will employ appropriate design and ope rational measures to ensure that the maximum velocity limit is not exceeded during minimum ambient source water surface elevations, as can be anti cipated through best professional judgementjudgment using hydrological data. 2. Impingement Mortality Monitoring EPA received many comments concerni ng impingement mortality monitoring. Issues regarding impingement m onitoring included the following:

• Many commenters expressed concern that th e impingement mortality standard is unclear as to what species the impingement mortality requirements apply.

• Intakes with low impingement would ha ve difficulty calculating impingement mortality.

• Monitoring requirements for impingement mortality are excessive, especially given the physical and biological challenges of appropriate sampling.

• Monitoring requirements should be eliminat ed for properly installed/operated preapproved technologies.

• Impingement “selects” impaired organisms, resulting in bias. Response: EPA has addressed concerns rega rding monitoring in the final rule. For example, there is no biological comp liance monitoring for pre-approved and approvable*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 287 of 642 technologiesstreamlined compliance alternatives in § 125.94 (c)(1) through ( 56 ) of today’s rule beyond that required for the permit application, and monitoring may be greatly reduced for other facilities. EPA r ecognizes that biological monitoring can be expensive, which factored into EPA signi ficantly reducing those requirements. With respect to intakes with low impingement having difficulty calculating impingement mortality, facilities can demonstrate under § 125. 94(c)(6) that the rate of impingement is reduced due to intake location or other t echnologies or factors. Further, under § 125.94(c)( 1211 ) a facility can demonstrate to the Director that there is a de minimis rate of impingement such that no a dditional controls are warranted. 3. Reporting Requirements Comments concerning reporting requir ements included the following:

• Commenters argue that permit application deadlines are unreasonable, especially given the limited number of consultants available and that EPA overestimates the number of facilities that ha ve completed these studies.

• Peer review requirements are overoverly burdensome.

• ApplicationPermit application requirements are burdensome and EPA should revise the proposed rules to remove, limit, or streamline the numbers and types of data, studies, and reports required. ApplicationPermit application requirements should be reduced for smaller facilities with intake flow in the 2–125 mgd range.

• The proposed rule requires the § 122.21(r) permit application materials for each permit cycle, regardless of whether the facility has been modified. After the initial assessment of BTA in the first permit cycle under the new rule, the permittee*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 288 of 642 should not be required to do additional studies and submit further documentation unless there is a significant change in the facility’s cooling system. Response: EPA notes that facilities have several flexibilities to address the first point, including: (1) if a permit is issued prior to December 31, 2016, [INSERT date 45 months after effective date of final rule] , the Director can delay submission requirements until such time that the facility can complete them and (2) in permit terms subsequent to the first permit issued under t oday’s rule, the Director can waive some or all of the studies. With respect to peer revi ew, EPA disagrees that peer review is overly burdensome. How to undertake a peer review is a widely known, generally following a well-established process. EPA notes that peer review is a normal part of Agency activities, and that commenters generally fa vor the application of peer review to environmental data and analyses. With respect to the burden of the permit application process and subsequent permit cycles, EPA has reduced the permit application requirements for the final rule and streamlined biological data collection to two years of data collected as part of the permit application (with the exception of the few facilities expected to comply with the impingement mo rtality standard under the alternative at § 125.94(c)(7)). In addition, entrainment studies ar e not prescribed for facilities below 125 mgd, although the Director may require the facility to provide information beyond the basic permit application information. Also, th e Director can waive study requirements in permit terms subsequent to the firs t permit issued under today’s rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 289 of 642 I. EPA Legal Authority CommentersI. Endangered Species Act
Some commenters argued that it is inappropriate to automatically to treat endangered and threatenedT&E species in a special catego ry and provide for special consideration for th em under the rule. TheyThese commenters asserted that EPA has no basis for incorporating ESA (Endangered Species Act) requirements into the rule and addressing ESA species under the NPDES progr am; they argued that the ESA operates independently. Other commenters noted EPA’sargued that EPA has an obligation under the ESA to consult with the Services if cooling water intake structures are likely to affect threatened or endangered species. Response: With regard to the Endangered Species Act, EPA has addressed threatened and endangeredT&E species and critical habitat in this rule to the extent necessary to ensure that this action is c onsistent with both the Endangered Species Act and CWA section 316(b). UnderSection 7 of the Endangered Species Act , EPA is required to ensure states that “each Federal agency shall , in consultation with and with the assistance of the Secretaries of the Interior and Commerce,[the services] insure that any action authorized, funded, or carried out by EPA[the agency]... is not likely to jeopardize the continued existence of any listedthreatened or endangered species or result in the destruction or adverse modification of habitat that has been [ designated as critical for the species.] habitat.” Under CWA section 316(b), EPA must ensurefacilities subject to NPDES permitting that regulatedhave cooling water intake st ructures are subject to BTA to minimize adverse environmental impact s. The final rule requires NPDES 316(b)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 290 of 642 permittees to characterizeidentify all Federally-listed threatened orand endangered species and/or designated critical habita t that are or may be present in the source water, characterize any entrainment ofaction area. The Director may reject an otherwise available technology as a basis for entrainmen t requirements if the Director determines there are unacceptable adverse impacts includi ng impingement, entrainment, or other adverse effects to Federally-listed threatened or endangered species , and consider any benefits to threatened or endangered species in establishing any site -specific entrainment requirements or designated critical habitat . EPA consulted with the Services under the ESA regarding this rule, and a summary of the requirements related to threatened or endangered species is discussed in Section VIII.K of this preamble.

VIII. Implementation The following sections describe how the Agency expects the final rule requirements to be implemented. The requirements of today’s final rule will be applied to facilities through NPDES permits issued by EPA or authorized States under CWA section 402. A facility may generally choose to demons trate compliance with the final rule by demonstrating compliance for the entire facil ity, or by demonstrating compliance for each individual cooling water intake structure. For example, a f acility with two intakes could demonstrate flow reduction commensurate with an existing closed-cycle recirculating system for the first intake, and demonstrate the intake velocity at the screen face is less than 0.5 feet per second at the second intake. Alternatively, the facili ty could demonstrate that each of the facil ity’s intakes are designed with an intake velocity of less than 0.5 feet*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 291 of 642 per second. For details about the scope and applicability of today’s final rule, see sectionSection I above. Today’s final rule (as described in sectionSection IV above) establishes permit application requirements for existing facilities in §§ 122.21 and 125.95, monitoring requirements in § 125.96, and record-keeping and reporting requirements in § 125.97. All existing facilities subject to the final rule th at withdraw from one or more cooling water intake structures with a faci lity-wide DIF of greater than 2 mgd are required to comply with the national BTA impingement mortalit y standard at § 125.94(c) and national BTA entrainment standard at § 125.94( d). New units at existing fac ilities are required to meet the national BTA impingement mortality standard at § 125.94(c) and national BTAand entrainment standardstandards at § 125.94(e). The final regulations also re quire the Director to review permit application materials submitted by each regulated facility, establish impingement mortality and entrainment requirements in accordance with this rule, and issue permits that include monitoring and record-keep ing requirements (§ 125.98). The permit application requirements, monitoring, record-keeping, and reporting requirements for each of the compliance alternatives are detailed in the following sections. A. When Does the Final Rule Become Effective and How are the Requirements Sequenced in an Orderly Way? This rule becomes effective on [INSERT date 60 days after the date of publication in the Federal Register. ]

. The requirements in this rule will then be implemented in NPDES permits as the permits are issued.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 292 of 642 EPA has sought to address the informa tion and studies required in the permit application associated with ongoing permitting proceedings and subsequent permitting after the first implementation of this rule in a permit. The EPA realizes that, in some cases, a facility may already be in the mi ddle of a permit proceeding at the time of promulgation of this rule, or the Director may have already required much of the same information be submitted by the facility prior to promulgation of today’s final rule. Therefore the rule includes several provisi ons that provide flex ibility for the permit application requirements. First, in the case of any permit expiring after [INSERT date 45 months after effective date of final rule] , under § 125.95 the facility must submit permit application materials required in § 122.21(r) with its next NPDES permit renewal application. Second, in the case of any permit expiring prior to December 31, 2016, [INSERT date 45 months after ef fective date of final rule] , under § 125.95 a facility may request that the Director delaywaive the submission date of the permit application requirements of § 122.21(r) based on a showing by the ow ner or operator of the facility that it could not deve lop the information for which such a waiver is requested by the time required for submission of the permit renewal application. If the Director then chose to allow a delay for the submittal of any of the information requirements of § 122.21(r), the Director would then determine the schedule for submission of any delayed requirements to be as soon as practicable. SecondThird , in the case of permit proceedings begun prior to the effective date of today’s rule, and issued prior to December 31, 2016, [INSERT date 45 months after ef fective date of final rule] , the Director mayshould proceed with any determination of BTA standards for impingement mortality*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 293 of 642 and entrainment without requ iring all of the permit app lication requirements of § 122.21(r).. See §§§ 125. 9495 (a)(2 ) and 125.98(g ). In such circumstances where permit proceedings have already begun prior to the eff ective date of the rule , these facilities will still need to submitthesubmit the appropriate permit appli cation materials found at § 122.21(r) permit applications during their ne xt application. Additionally, while EPA expects that many facilities will already co mply with § 125.94(c), in some cases the facility will need to choose one of the complia nce alternatives for IM in their subsequent permit cycle. 92 ThirdIn particular, EPA expects the f acility would submit the information required in § 122.21(r), and the Director w ould make a determination of BTA for entrainment for that facility. Only after th e Director has establis hed site-specific BTA requirements for entrainment reduction will the facility have to select the compliance alternative on which it will rely to meet the IM requirements of today’s rule. The Director may either amend the permit to include the IM requirements or include them in a subsequent permit if the Director determines the proposed controls ar e consistent with § 125.94(c). The Director would establish a schedule incorporating each of these sequential actions. In addition, the rule allows the Director the flexibility to grant a request for a waiver of permit applicati on requirements in § 122.21(r)(6) in order to accommodate the circumstances described here. See §§ 122.21(r)(1)(i) and 125.95(a).

92 EPA’s costs do not assume zero compliance costs for prior BTA determinations or permit proceedings; all facilities were assessed costs on the basis of technologies in place as described in Section IX.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 294 of 642 Fourth , in permit applications subsequent to the first permit issued under § 125.94(a)(1) with all requirements required information submitted under § 122.21(r), the Director may approve a request to reduce information required , if conditions at the facility and in the water bodywaterbody remain substantially unchanged since the previo us application. 93 See § 125.95(c). In addition to all of these flexibilities, EPA expects today’s final rule gives advance notice to affected facilities as to what the Agency’s expectations are regardingaboutpermit application materials and compliance schedules. While the final rule has both reduced and streamlined the permit application requirements, the EPA has determined that fo r many facilities, it may take as long as 39 months to plan, collect, and compile the data and studies required to be submitted with the permit application (see Section C below fo r a more detailed discussion of each application element). The rule therefore specifies that [INSERT date 45 months after effective date of final rule] reflects the date after which all permit application requirements must be submitted as specifi ed at § 125.95. Specific permit requirements may not need a full 39 months for completi on, therefore the Direct or may establish a schedule for submission of the required permit application elements. For example,

93 However, if conditions at the facility or in the water bodywaterbody have in fact changed substantially since the previous permit application, the Director will revisit data collection needs and possibly the BTA determination. The presence of any habitat designated as critical, or species listed as threatened or endangered after issuance of the curr ent permit (whose range of habitat or designated critical habit includes waters where a facility intake is located) constitutes potential for a substantial change that must be addressed by the owner/operator in subsequent permit applications , unless the facility received an exemption pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 1539(a) or there is no reasonable expectation of take.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 295 of 642 planning for required sampling may take 6 m onths, inclusive of establishing a sampling team, developing sampling protocols, and ac quiring necessary equipment. Source water sampling and characterization under § 122.21(r)(4 ) includes two years’ worth of data. Therefore, the EPA expects a minimum of 30 m onths will be necessary for submission of § 122.21(r)(4), assuming the facility collects new data; this timeframe could be shorter if the facility chooses to use ex isting biological data. Facilities choosing to comply with the IM requirements through either § 125.94(c)(5) or (c)(6 ) must collect at least 2 years data upon which the facility would demonstrate that the modified traveling screens or the facility’s systems of technology have be en optimized to minimize impingement mortality. Therefore, the EPA expects a mi nimum of 30 months w ill be necessary for submission of § 122.21(r)(6), assuming the faci lity collects new data. Collection of entrainment characterization data and studies sh ould occur in parallel with IM studies and sampling. Thus, after the initia l 6 month planning period, fac ilities that do not already have recent entrainment characterization data will collect a minimum of 2 years entrainment data under § 122.21(r)(9). Facilitie s are expected to need an additional 9 months to assemble the entrainment data and studies as required by § 122.21(r)(9) through (12). Therefore, the EPA has concl uded that as many as 39 months will be necessary for final submission of all requi rements under § 122.21(r). This time frame will be adequate for facilities under 125 mgd AIF; facilities over 125 mgd AIF also need to have their 122.21(r)(10) to (12) studies peer reviewed. The EPA expects 3 months will be needed for completion of peer review re quirements and generation of a final report. However, many of the facil ities over 125 mgd AIF were subject to the Phase II rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 296 of 642 before it was suspended (that is, all electric generators ove r 125 mgd AIF are also above 50 mgd DIF), and likely need less time for up front planning and/ or data collection. Therefore, the EPA has concluded that as ma ny as 39 months will be adequate for these facilities to meet all requirements under § 122.21(r). These time frames are consistent with the timeline EPA include d in the proposed rule, and also matches the 3 1⁄2 years previously provided in the Ph ase II rule for data collecti on and studies. EPA notes the submission of the studies required with the permit application should not be confused with the schedule for compliance with the BTA requirements, as discussed below. EPA has also sought to sequence the impingement mortality controls to be implemented after theso that a facility may se lect and implement these controls after the Director’s determination of controls on entrai nment. With respect to entrainment requirements, existing facilities withdraw ing greater than 125 mgd AIF must submit permit application materials includin g the studies prescribed in today’s final rule at § 122.21(r)(9) through (13) in order to he lp the Director determine what entrainment controls to require at the facility. Facilitie s at or below this threshold must submit any information requested by the Director. The Di rector will then review these materials and determine if further entrainment controls are necessary. Once the BTA requirements for entrainment have been established, the fac ility would finalize its chosen method for compliance with impingement mortality under § 125.94(c). EPAIt would then expects thatbe appropriate for the Director wouldto develop a schedule on whichwhereby the facility would proceed to design, construc t, and implement its technologies for impingement mortality, for entrainment, or for both together , where should the same*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 297 of 642 technology addresses both impacts. In this manner, the EPA has mergedharmonized the schedules for meeting both impingement mortality requirements and entrainment requirements. EPA further notes that approximately 2 pe rcent of facilities ha ve no controls in place for impingement or entrainment, or that a facility may choose to install modified traveling screens as part of its compliance response. In thes e circumstances, not only does EPA expect such decisions to be delayed until after the Director has determined the BTA requirements for entrainment, EPA acknowledge s that the required op timization study of § 122.21(r)(6) cannot be completed until after the technology has been designed and constructed. EPA has provided the Director th e flexibility to establish an appropriate schedule for submission of such studies under § 125.95(a)(2). After the effective date of the regulati on, when the first permit implementing the new regulatory requirements is issued, permitting authorities typically consider the need to allow facilities some period of time to come into compliance. Under today’s final rule, facilities will have to comply with th e impingement mortality and entrainment requirements as soon as possiblepracticable according to the schedule of requirements set by the Director. The concept of “as soon as possible” is one that already exists for compliance schedules may be found in the generally applicable NPDES regulations at 40
CFR 122.47. Because section 316(b) has no statut ory deadline for meeting the “best available technology for minimizing adverse e nvironmental impact” standard, there is no statutory bar to use of a compliance schedule in appropriate circumstances. The EPA recognizes that it will take facilities time to upgrade exis ting technologies, and install*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 298 of 642 new technologies, and that there are limits on the number of faci lities that can be simultaneously offline to install contro l technology and still supply goods and serviceservices to orderly, functioning markets. EPA expects It is appropriate for the Director willto take this into account when es tablishing a deadline for compliance. The EPA expects anyAny such schedule would take into account factors provided in § 125.98(c), such as measures needed to maintain adequate energy reliabi lity by an electric generating facility, or extenuating circumstances such as scheduled production outages at a manufacturing facility. There may be overlap in the technologie s used to comply with impingement mortality and entrainment standards, which coul d result in the facility needing more time to comply with the impingement mortality requ irements. For example, if a facility plans to retrofit to wet cooling towe rs to reduce entrainment, the wet cooling towers technology will also meetscomply with the requirements for impingement mortality viastandard under § 125.94(c)(1). As such, the Director would schedule compliance with the impingement mortality requirements to match the schedule for entrainment requirements. Further, EPA recognizes that in some cases , especially where additional entrainment control technologies are require d, the facility could require a lengthy period of time to design, construct, and implement control techno logies. Therefore, the rule authorizes the Director, at § 125.94( gh ), to establish interim BTA requi rements in a facility’s schedule of requirements, for impingement mortality, entrainment, or both, where necessary on a site-specific basis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 299 of 642 In contrast to the proposed rule, today’s final rule does not include a requirement for compliance with the impingement mortality performance standards within eight years. EPA expects, however, that the final ru le will generally result in compliance along the same timeframe.within a similar period of time. The combination of permit reissuanceissuance , the Director’s determination of BTA for entrainment, and the subsequent schedule of requirements for impi ngement mortality will result in some facilities, particularly those already in a pe rmitting proceeding, or with controls similar to what the new permit requires, being in complia nce within a very short time frame. Some facilities whothat are not now in a permitting proceeding may need as much as three and a half years to fully complete their studies and data collection, and depending on the types of control selected, may need additio nal time to design, construct, and implement their technologies. In some cases, the Direct or’s determination for entrainment may result in a facility meeting both the impingement mortality and entrainment BTA requirements in fewer than eight years. All facilities w ill be required to follow their schedule as determined by the Director. EPA notes that there is a three-year period after the effective date of this rule before Directors will be receiving permit applications containing the full set of application requirements in § 122.21(r). EP A is aware that currently many NPDES permits for facilities with a CWIS have b een administratively c ontinued. For these administratively continued permits, the Direct or should consider if any permits would need additional updated information to support the permit issuance decision. The Director*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 300 of 642 may, under 40 CFR 122.21(g)(13), request addi tional information in cluding any permit application requirements in § 122.21(r).
B. How doesDoes the Final Rule Reduce Biological Monitoring Requirements? The EPA has streamlined the biological data and study requirements for both impingement mortality and entrainment into one comprehensive set of permit application requirements and provisions. The source water baseline biol ogical characterization, entrainment biological characteriza tionSource Water Baseline Biological Characterization Data, impingement t echnology performance optimization study, Entrainment Characterization Study , and where applicable, biologicalentrainment performance studies are all conducted within the same two year time frame prior to submission of an application for a permit. Further, as shown in Exhibit VIII-1, EPA anticipatesEPA's analysis indicates that more than 99 percent of existing facilities will choose an alternative for impingement mortality that does not require continual biological compliance monitoring. Thus any required biological monitoring data consists solely of that required to be collected to meet the permit application requirements. See Section F for further discussion.
Exhibit VIII-1. EPA’s projections of how facilities will choose to comply with the IM Requirements

IM Compliance Alternative Intake Count a Percent of Total Intakes Closed-cycle recirculating systemsystem c 307 18% Design velocity 362 21% Actual velocity 226 13% Existing offshore velocity capcap c 10 1% Modified traveling screens 488 29% System of technologies 278 17% Impingement Mortality Performance Standard 12 0.7% De minimis ** b ** b*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 301 of 642 Total 1682 100% a. EPA’s compliance costs for each facility are based on the sum of the fac ility’s intake le vel compliance costs. Some facilities have more than one intake. See IX.B.2 for more information on the use of the survey data. b. EPA doeshas not knowestimated which facilities will be determined to be “de minimusminimis ” under § 125.94(c)( 1211 ) by the Director. For purposes of this analysis, EPA has assumed no facilities fall under the “de minimis” provision. c. EPA is not projecting facilities will inst all closed-cycle recirc ulating systems or offshore velocity caps to comply with th e IM requirements, rather these facilities already have these technologies installed.
By merging the data collec tion and studies into the permit application requirements, EPA expects approximately half of all affected facilities will be able to complete the initial permit application within a few months. 94 In the case of a facility that was not previously required to collect data and conduct studies, it may take three years’up to 45 months lead time for a permit to be applied for , and additional time for the permit to be issued. Although the permit application tim es may be longer for the first permit cycle after this rule, this is a tr adeoff for the flexible IM requirements. Once the permit is issued, EPA anticipates very few, if any, facilities will be required to conduct ongoing biological compliance monitoring related to impingement controls; for more details, see Section F and Exhibit VIII-4. Instead, for each subsequent permit cycle each facility would either (1) de monstrate to the Director that facility operations and water bodywaterbody characteristics are subs tantially unchanged, or (2) update any biological characte rization data. Anticipating that NPDES permits are renewed when they expire, the update to the fa cility’s biological ch aracterization and any

94 For example, facilities that were subject to Phase II will have already collected most of the data and information as part of the Phase II rule issued February 16, 2004 and implemented up until suspension of that rule on July 9, 2007.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 302 of 642 corresponding biological performance evalua tions would be conducted approximately every five years. C. What Information Will I Be Requi red to Submit to the Director When I Apply for My NPDES Permit? Today’s final rule establishes, at § 12 2.21(r), permit application requirements for all facilities subject to the requirements of § 125.94. Each permit application element at § 122.21(r) will beis described in more detail below. The final rule requires existing facilities to prepare and submit muchsome of the same information as previously required for new facilities subject to subparts I or N ( i.e .., Phase I new power plants and manufacturers or Phase III new offshore oil and gas facilities), namely the information at § 122.21(r)(2) through (4). In addition, the rule adds subparagraphs for existing facilities to the regulations at § 12 2.21(r)(4), as well as (r)( 65 ) through (13) to include the information and study requirements specific to existing facilities. In the case of a new unit constructed at an existing facility, EPA expects much of the information submitted by the facility in pr evious permit applications would still be current and relevant. Theref ore, EPA has reduced the permit application requirements to those necessary to update the facility’s previously submitted information under § 122.21(r)(2), (r)(3), (r)(4), (r)(5), (r)(6 ), (r)(7 ) and (r)(8). In other words, the new unit permit application is intended to describe the changes to th ese documents as a result of the addition of the new unit. In addition, the facility must submit information specific to the new unit’s chosen compliance method at § 122.21(r)(14).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 303 of 642 All existing facilities are required to complete and submit permit application studies to describe the source water bodywaterbody (§ 122.21(r)(2)), cooling water intake structures (§ 122.21(r)(3)), char acterize the biological commun ity in the vicinity of the cooling water intake structure (§ 122.21(r) (4)), cooling water system (§ 122.21(r)(5)), and operational status (§ 122.21(r)(8)). In addition, a facility that previously conducted an entrainment performance study (§ 122.21(r )(7)) must also submit that information, although § 122.21(r)(7) does not impose a requirement to collect new informationFacilities that already use a clos ed-cycle recirculati ng system must still submit this information in their permit application. The Director will need, for instance, the biological sampling data in (r)(4) to serve as a record basis for their BTA determination in the permit. Furthermore, in Phase I, new facilities were required to be commensurate with closed-cycle, to meet th e 0.5 fps velocity limit, and to collect two years’ worth of biological data to establish a record basis for impacts at the facility. In addition, the data collected here is important to inform an owner/operator’s evaluation of whether and if so what threatened or endange red species or designate d critical habitat are or may be present in the action area

. All existing facilities must describe thei r existing impingement and entrainment technologies or operational measures and a su mmary of their performance, including but not limited to reductions in impingement mortality and entrainment due to intake location and reductions in total water withdr awals and usage (§ 122.21(r)(5)(iii)). All facilities must also complete and submit their c hosen compliance method for impingement mortality (§ 122.21(r)(6)). This includes identificati on of any requests for BTA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 304 of 642 determinations under § 125.94(c)(11) de minimis rates of impingement or § 125.94(c)(12) low capacity utilization power generation units

. In addition, the owner or operator of an existing facility must submit the informa tion required under paragraph (r)(6) for the alternative specified at 40 CFR 125.94(c) that the owner or oper ator of an existing facility chooses to rely on as its method of complia nce with the BTA Standards for Impingement Mortality specified in 40 CFR 125.94. Because the IM compliance options § 125.94(c)(1 ) through), (2), and (4) include pre-approved technol ogies, the owner or operator of a facility choosing one of these fourthree options to comply with the IM requirements does not have either biological st udies or biological complian ce monitoring related to the applicable IM standard. Co mpliance options § 125.94(c)( 3), ( 5 )), and (6) are streamlined options. For these twothree options, the permit application element § 122.21(r)(6) further requires a site-specific study for the purposes of technology optimization to minimize impingement mortality, including additional biological monitoringdata collection that in most cases would occur during the same two year period of source water baseline biological data collection for the Source Water Baseline Biological Characterization Data required under § 122.21(r)(4) to characterize the baseline, and a demonstration that the operation of specific technologies at your facility have been optimized to minimize impingement mortality. The owner or operato r of a facility choosing one of these twothree options to comply with the IM requirements do not have ongoing biological compliance monitoring as part of the applicable IM standard . As discussed in the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 305 of 642 previous section, the Direct or can establish a schedule 95 for submitting the optimization study if the facility first needs to install additional technology for IM

. All existing facilities , particularly electric gene rating facilities above 50 MGD, may submit to the Director additional permit application studies to describe biological survival studies that address technology efficacy and other studies on entrainment at the facility (§ 122.21(r)(7)). This requirement does not impose any new or additional study requirements. This permit application elemen t includes the submission of existing studies conducted by or relevant to the facility. Furt her, the burden of this requirement has been reduced since proposal by only referring to studies of entrainment studies

. All existing facilities that wit hdraw more than 125 mgd AIF 96 of water for cooling purposes must also submit additional informa tion to characterize entrainment and assess the costs and benefits of installing various potential technologi cal and operational controls. These facilities are required to submit to the Director additional permit application studies including the § 122.21(r)(9), entrainment characterization studyEntrainment Characterization Study ; § 122.21(r)(10), comprehensive technical

95 The Director could, for example, issue a permit before the optimization study has been completed, and include a schedule for submission of the optimization study in the newly issued permit. 96 AIF is calculated from the most recent three years’ data or five years in subsequent permit cycles. As such, AIF is a variable number. It is possible that a facility could transition from below 125 mgd to above 125 mgd if the facility significantly increases withdrawal of cooling water, such as if the facility increases capacity or if it adds a new unit. In these cases, the facility will then be required to conduct the studies and meet the permit application requirements at (r)(9)-(13). This consequence is intended to incentivize facilities to reduce or reuse water for cooling, thereby avoiding the need for additional permit application studies.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 306 of 642 feasibilityComprehensive Technical Feasibility and cost evaluation studyCost Evaluation Study ; § 122.21(r)(11), benefits valuation study (unless waived by the director);Benefits Valuation Study; and § 122.21(r)(12), nonNon -water quality environmentalQuality Environmental and other impacts assessment. A facility that is required to submit one of these studies must also submit (r)(13), peer review.Other Impacts Assessment. As with the biological monitoringdata collection required of some f acilities under § 122.21(r)(6), EPA expects biological monitoringdata collection for the purposes of entrainment characterization to occur during the same tw o year period of biological data collection required under § 122.21(r)(4 ) or (9 ). EPA notes that facilities below the 125 mgd threshold are not automatically exempt from entrainment requirements. The Director may determine that entrainment studies may be requ ired or that entrainment controls may need to be installed for any cooling water intake st ructure. See the Section VI of this preamble for more information. The final rule further requires the studie s at (r)(10) through (r )(12) be subject to an external peer review as required at (r)(13 ), with (r)(9) being); a separate peer review is not required for § 122.21(r)(9), as it is implicitly reviewed via its use in (r)(10) and (r)(11). EPA expects the facility would first notify the Direct or of the peer review in advance. For example, facilities could identify their peer reviewers near the beginning of their biological monitoringdata collection for the required entrainment characterization studiesEntrainment Characterization Study at § 122.21(r)( 129 ). Since a facility’s permit application requires two years of biological data, EPA expect s this is more than enough time for the facility to identify peer reviewer s, and for the Director to disapprove of a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 307 of 642 peer reviewer or require addi tional reviewers. Further, this provides the Director ample opportunity to confer with those agencies with responsibility fo r fish and wildlife potentially affected by the coo ling water intake structure, in cluding other Federal, State, and Tribal agencies. Similarly, in the case of permits for electric generating utilities, EPA expects this is enough time to confer with state co-regulators such as public utility commissions, or independent system operato rs whose responsibility it is to ensure reliability of the electricity grid. To mini mize the overall time required to conduct a peer review, all studies conducted by the facility under § 122.21(r )(10) through (12) will be subject to peer review at the same time, in a holistic fashion. Additional guidance on conducting peer review is available on EP A’s Peer Review Program website at www.epa.gov/peerreview. EPA exp ects the Director will use the permit application information, studies, and peer review result s to assess the impingement and entrainment impacts of the cooling water intake structure and determin e appropriate technological or operational controls, or both, as necessary. While all facilities must submit § 122.21(r)(2) through (6) and (r)(8) and (r)(7), where applicable , (r)(7), EPA has reduced the permit application requirements based on the facility’s chosen compliance method for impingement mortality. Exhibits VIII-2 and VIII-3 below illustrate the permit application requirements as they relate to an existing facility’s chosen compliance methods. EPA expects permit application requirements for new units will consist of updates to previously submitted permit applications for the rest of the existing facility at which the new unit is being constructed.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 308 of 642 For a new unit at an existing facility, EPA expects that only the appropriate and relevant updates to the ex isting facility’s permit applic ation materials are required . (in addition to newly developed materials required at § 122.21(r)(14)). For example, the facility would update § 122.21(r) (3) to indicate the addition of the new unit, any new intakes associated with the new unit, exp ected operational characteristics, etc. For the owner or operator of a new unit choosing to comply via § 125.94(e)(1) to employ a closed-cycle recirculating system, the appl ication materials under § 122.21(r)(9)-(12) are not required. For the owner or operator of a new unit opting to comply via § 125.94(e)(2), the application materials required under §For the owner or operator of a new unit and with an AIF greater than 125 mgd, the pe rmit application materials under § 122.21(r)(9)- (13) are required. In those circumstances where data specific to the facility indicate that compliance with the requirements of paragr aphs (e)(1) or (2) of § 125.94 for a new unit would result in compliance costs wholly out of proportion to the costs EPA considered in establishing the requirements at issue, or would result in signifi cant adverse impacts on local air quality, significant adverse impacts on local wa ter resources other than impingement or entrainment, or significant adverse impacts on local energy markets, the rule requires the submission of such data as part of 122.21(r)(14). EP A notes that when a new unit increases an existing facility’s AI F greater than 125 mgd, the permit application requirements also include 122.21(r)(9) through ( 13). Further, facilitie s may need several years to complete studies and data collect ion and, depending on the types of controls selected, may need additional time to design and construct their t echnology. Thus while the rule requires the perm it application for a new unit at least 180 days prior to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 309 of 642 commencing cooling water withdrawals, it is in the facility’s best interest to submit this data well in advance in order to prevent a ny delays in the Director’s review of permit application materials and subse quent issuance or renewal of th e facility’s NPDES permit. For the owner or operator of a new unit opti ng to comply via 125.94(e)(2) the application materials required under 122.21(r)(14) must demonstr ate entrainment reductions equivalent to 90 percent or greater of the reduction that could be achieved through compliance with § 125.94(e)(1). Further, if the addition of the new unit’s cooling water withdrawals are sufficient to raise the facili ty’s cumulative AIF above 125 mgd, then the facility as a whole would be required to submit the materials required under § 122.21(r)(9)-(13125.94(e)(1 ).
Exhibit VIII-2. Summary of permit application requirements for existing facilities according to existing facilities’ chosen method for complianc e with impingement mortality standard

Compliance approach to Impingement § 122.21 subsection (r)(2) (r)(3) (r)(4) (r)(5) (r)(6) (r)(6)(i) (r)(6)(ii) (r)(8)

Closed-cycle recirculating system Yes Yes Yes Yes Yes No No Yes

Design intake velocity Yes Yes Yes Yes Yes No No Yes

Actual intake velocity Yes Yes Yes Yes Yes No No Yes

Existing offshore velocity cap Yes Yes Yes Yes Yes No No Yes

Modified traveling

screens Yes Yes Yes Yes Yes Yes No Yes

Combination of technologies Yes Yes Yes Yes Yes No Yes Yes

Impingement Mortality Yes Yes Yes Yes Ye s Maybe Maybe Yes*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 310 of 642 Performance Standard

Exhibit VIII-3. Summary of permit application requirements for ex isting facilities: entrainment Compliance approach to Entrainment § 122.21 subsection (r)(7) (r)(8) (r)(9) (r)(10) (r)(11) (r)(12) (r)(13) Closed-cycle recirculating system NoYes Yes NoVar. a NoVar. a NoVar. a NoVar. a NoVar. a

Director BTA entrainment determination: facility AIF above 125 mgd Yes Yes Yes Ye s Yes Yes Yes

Director BTA entrainment determination: facility AIF 125 mgd or below Maybe Maybe Maybe Maybe Maybe Maybe Maybe

a. Director has the discretion to waive. In addition, the Director may set informa tion requirements not included in today’s rule to aid in best professional judgment permitting, such as will occur for entrainment at facilities below 125 mgd AIF not, and for impingement and entrainment at existing facilities below 2 mgd DIF, neither of which are required by today’s rule to submit items (r)(9) through (r)(13 ), or existing facilities below 2 mgd.). The Director may find aspects of the permit application requirements described below to be relevant in such situations. A summary of each permit application requirement follows. 97 1. § 122.21(r)(2) Source Water Physical Data This requirement is unchanged from the Phase I rule and the 2004 Phase II rule. The facility is required to submit data to char acterize the facility and evaluate the type of

97 Where a closed-cycle recirculating system withdraws greater than 125 mgd AIF, the information required in § 122.21(r)(9) to (13) is required, unless the Director reduces or waives some or all of the information required.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 311 of 642 water bodywaterbody potentially affected by the coo ling water intake structure. The applicant is required to submit a narrative de scription and scaled drawings showing the physical configuration of all source water bod ies used by the facility, including areal dimensions, depths, salinity and temperatur e regimes, and other documentation that supports the determination of the water bodywaterbody type where each cooling water intake structure is located; identification and characterization of the source water body’swaterbody’s hydrological and geomorphological feat ures, and the methods used to conduct any physical studies to determine the intake’s area of influence in the water bodywaterbody and the results of such studies; a nd locational maps. The Director uses this information to evaluate the appropriate ness of any design or technologies proposed by the applicant. 2. § 122.21(r)(3) Cooling Water Intake Structure Data This requirement is unchanged from the Phase I rule and the 2004 Phase II rule. This data is used to characterize the coo ling water intake structure and evaluate the potential for impingement and entrainment of aquatic organisms. Information on the design of the intake structure and its location in the water column allows evaluation of which species and life stages might be s ubject to impingement and entrainment. A diagram of the facility’s wate r balance is used to identify the proportion of intake water used for cooling, make-up, and process water, as well as any cooling water supplied by alternate sources, such as reuse of another f acility’s effluent. The water balance diagram also provides a picture of the total flow in a nd out of the facility, and is used to evaluate gray water, waste water, and other reuses in the facility. The applicant is required to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 312 of 642 submit a narrative description of the confi guration of each of cooling water intake structure and where it is in the water bodywaterbody and in the water column; latitude and longitude in degrees, minutes, and seconds for each cooling water intake structure; a narrative description of the operation of each of cooling water intake structure, including design intake flows, daily hours of operation, nu mber of days of the year in operation and seasonal changes, if applicable; a flow di stribution and water ba lance diagram that includes all sources of water to the facilit y, recirculating flows, and discharges; and engineering drawings of the c ooling water inta ke structure. 3. § 122.21(r)(4) Source Water Baseline Biological Charact erization Data This information is similar to that require d in the Phase I rule. Existing facilities are required to characterize the biological community in the vi cinity of the cooling water intake structure and to characterize the opera tion of the cooling water intake structures. This supporting information must include existin g data if they are available. However, the facility may supplement the data using ne wly conducted field stud ies if it chooses to do so. The information the applicant must subm it includes identification of data that are not available and efforts made to identify source s of the data; a list of species (or relevant taxa) for all life stages and their relative abundance in th e vicinity of the cooling water intake structure; and identification of the species and life stages that would be most susceptible to impingement and entrainment. All species should be evaluated, including the forage base , threatened and endangered species whose range of habitat includes the waters where the facility’s intakes are located, and those species most important in terms of significance to commercial and recreational fisheries. In additi on, the applicant must*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 313 of 642 identify and evaluate the primary period of re production, larval recruitm ent, and period of peak abundance for relevant taxa; data repres entative of the seasonal and daily activities (e.g., feeding and water column mi gration) of biological organi sms in the vicinity of the cooling water intake structure ; identification of all threat ened, endangered, and other protected species whose range of habitat includes the waters where the facility’s intakes are located; and. In addition, in stead of the information requi red at § 122.21 (r)(4)(vi), the owner or operator of an existing facility or new unit at an existing facility must identify all Federally-listed threatened and endangered species and/or designated critical habitat that are or may be present in the action area pursuant to paragraph § 125.95 (f). The action area can generally be c onsidered the area in the vicinity of impingement and entrainment at the cooling water intake structure. The applicant must also include documentation of any public participation or c oordination with Federa l or State agencies undertaken. If the applic ant supplements the information w ith data collected using field studies, supporting document ation for the Source Wate r Baseline Biological Characterization Data must include a description of a ll methods and quality assurance procedures for sampling, and data analysis including a descripti on of the study area; taxonomic identification to the lowest taxon pos sible of sampled and evaluated biological assemblages (including all life stages of fish and shellfish); and sampling and data analysis methods. The sampling or data an alysis (or both) methods used must be appropriate for a quantitative survey and based on consideration of methods used in other biological studies performed in the same source water bodywaterbody . The study area should include, at a minimum, the area of infl uence of the cooling water intake structure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 314 of 642 The applicant may also identify protective m easures and stabilization activities that have been implemented and describe how these measures and activities affected the baseline water condition in the vicinity of the intake. EPA is adding items (ix) and (x) to the source water baseline biological characterization data for existi ng facilities. EPA is adopting it em (ix) essentially as it was proposed, which provides for descriptions of other activities that may affect the baseline biological characterization. Previous measur es to protect threatened or endangered species should be noted as pa rt of (ix). This item was not required in Phase I for new facilities because the new facility has not yet done anything that would affect baseline biological characterization. EPA is requiring it em (xitem (ix), (x) and (xi) to the Source Water Baseline Biological Characterization Data for existing facilities. Item (ix) simply defines the term “Source Water Baseline Bi ological Characterization Data.” EPA is requiring item (xi ), identification of fragile species found at the fac ility. EPA notes that in contrast to the proposed rule, the permit a pplication does not require submission of the proposed “species of concern.” EPA found that the term “species of concern” was too similar to terms as used in the context of T&E (threatened and endangered) species, and may cause confusion over existing Services or State requirements for such species. Further, despite EPA’s efforts to disti nguish between species of concern and RIS (representative indicator species) in the NODA (77 FR 34325, June 11, 2011), EPA found that many commenters were still confused by the language. Instead, EPA is adopting the term “fragile species” and using the term exactly as it is used with the impingement mortality data and criteria used in calculating the impingement mortality*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 315 of 642 standards of the rule. The definition for “fra gile species” at § 125.92 is a species of fish or shellfish that has an impingement survival rate of less than 30 percent even when the BTA technology of modified trave ling screens are in operation. EPA has identified fragile species in the Chapter 11 of the TDD for the proposedfinal rule. Further, EPA is providing examples , in the list of those 14 specific species in today’s regulatory definition as a non-exclusive list . This list includes only t hose species specifically analyzed as part of the performance standa rds development. If a permit applicant can sufficiently demonstrate a record basis, th e permitting Director may deem a particular species to be a fragile species fo r the purpose of a particular permit

. American shad ( Clupeidae ), bay anchovy ( Engraulidae ), and blueback herring ( Clupeidae ) belong to families that wereare specifically identified in the proposed rule TDD Chapter 11 as examples of species th at may be, at the Director’s discretion, excluded from performance limitsstandards on the basis of impingement survival. As another example, threadfin shad (a species not specifically identified as fragile in today’s rule) are prone to fall dieoffdie-off when the water temperatures reachtemperature reaches 42 degrees. The EPA does not intend for such naturally occurri ng mortality to be counted against a facility’s performance in reducing impingement mortality. EPA is aware of limited success in flow reduction and behavioral dete rrent systems in protecting fragile species. However, there are no de monstrated and available technologies for industry as a whole to address fragile speci es. EPA has long recognized these species as having low survival rates under the best of conditions, and established different mechanisms to address these in today’s final rule. Today’s BTA for impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 316 of 642 mortality allows the Direct or to establish site-speci fic controls under § 125.94(c)( 119 ) to address fragile species. EPA notes the change in terminology to “f ragile species” eliminates the proposed rule burden on States to review and approve each facility’s site-specific species of concern, and eliminates confusion over any T& E or RIS that may be subject to more stringent requirements under other Federal, State, and Tribal la w. Further, use of “fragile species” instead of “species of concern” greatly increases the transparency of the Agency’s impingement mortality performance standards. In addition, EPA notes that (r)(4)(vi) requires the applicant to submit information on all threatened and endangere d species, not just those T&E species that are fish or shellfish. Examples of T&E species that are not fish or shellfish are corals, sea turtles and marine mammals. 4. § 122.21(r)(5) Cooling Water System Data The Director uses this data in determini ng the appropriate standards that would be applied to the facility. Facil ities are able to use this in formation, along with the water balance diagram required by § 122.21(r)(3), to demonstrate the extent to which flow reductions have already been achieved . at the facility level. The applicant must provide the following information for each cooling wate r intake structure they use: a narrative description of the operation of the cooling water system a nd its relationship to cooling water intake structures (incl uding the use of helper towers); the proportion of the design intake flow that is used in the system incl uding a distribution of water used for contact cooling, non-contact cooling, and process uses; a distribution of water reuse (to include*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 317 of 642 cooling water reused as process water, proce ss water reused for coo ling, and the use of gray water for cooling ) [NOTE to reviewers: EPA would like to cite here as support for this material the draft DOE report on “U.S . Energy Sector Vulnerabilities to Climate Change and Extreme Weather” when it is public.];); description of re ductions in total water withdrawals including cooling water intake flow reductions already achieved through minimized process water withdrawals; description of any cooling water that is used in a manufacturing process either before or after it is used for cooling, including other recycled process water fl ows; the proportion of the source water bodywaterbody withdrawn (monthly); the number of days of the year the co oling water system is in operation and seasonal changes in the opera tion of the system, if applicable. The applicant must also submit a description of existing impingement and entrainment technologies or operational measures and a su mmary of their performance, including for example reductions in entrainment due to in take location and reductions in total water withdrawals and usage, and efficiencies in energy production for each producing unit that result in the use of less cooling water, including for example combined cycle and cogeneration. For example, the applicant may provide comparative density data for the intake to demonstrate the extent to which location of the intake has reduced adverse environmental impact. The additional information at § 122.21(r)(5)(iii) is specific to those process units that use cooling water fo r purposes other than power generation or steam, and where the owner or operator intends to comply with the BTA for IM through either the use of flow reduction measures or th e reuse of other water for cooling purposes.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 318 of 642 5. § 122.21(r)(6) Chosen Method of Comp liance with Impingement Mortality Standard Today’s final rule is flexible in provi ding seven different compliance options for meeting impingement mortality requirements . Under § 122.21(r)(6), the facility must identify its approach to meet the impingement mortality performance standards. The facility must identify the compliance method fo r the entire facility or, alternatively, the compliance method for each cooling water intake structure at the facil ity. Finding it to be unnecessary because the facility will already have a set of re quirements to meet based on its chosen method of compliance, EPA has eliminated the proposed requirement for a separate Impingement Mortalityimpingement mortality reduction plan. In addition, monitoring and studies conducte d under the reduction plan is no longer required by all facilities. Instead today’s final rule specifies monitoringdata collection requirements only in those instances where the facility must demonstrate a particular performance outcome as described below. Facilities choosing to comply with § 125.94(c) by operating a modified traveling

screen (under § 125.94(c)(5)) must submit an impingement technology performance optimization study under § 122.21(r)(6)(i). The s ite-specific study must demonstrate the modified traveling screen as defined at § 125.92 has been optimized to minimize impingement mortality. The study must include a minimum of two years of biological monitoringdata collection . This time frame is consistent with the requirements at paragraph (r)(4)(iv) to identif y primary periods of reproduc tion and peak abundance, as well as (r)(4)(v) to provide da ta representative of the seasonal activities, both of which*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 319 of 642 would require at leas t one year worth of monitoring.data collection. EPA expects facilities will either use existing biological data already required under (r)(4) to complete their site-specific impingement studies, modi fy their biological data collections under (r)(4) to be comprehensive and inclusive, use existing performance studies, or collect supplemental data necessary to make their demonstrations. If a facility is using previously collected data or studies that ar e more than 10 years old, the facility must demonstrate the data is still relevant and representative of the facility. If a facility intends to return organisms to a different water body from which they are withdrawn, a request for consideration of this must be made to the Director under (r)(6). The rule specifies sampling at le ast monthly during the two year monitoringdata collection effort of the impingement technology performance optimization study , and requires documentation of methods used including counting of moribund organisms, latent mortality, holding times, and counting of entrapment. The Director may establish more frequent monitoring as well as specify monito ring methods and additional protocols to be used.collection, as well as specify sa mpling methods and additional protocols to be used. If the facility intends to return fish and shellfish to a different waterbody than the source waterbody that is used to withdraw cooling water, EPA expects this would be identified as part of § 122.21(r)(6)(i). While EPA does not expect th is situation occurs very frequently, the permit application info rmation at (r)(6)(i) along with (r)(4) would provide the Director the information needed to determine whether such a return location*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 320 of 642 is appropriate. 98 If the site-specific impingement study demonstrates the modified traveling screen (as defined at § 125.92) ha s been optimized to minimize impingement mortality, the Director may then determine th e modified traveling screen is the best technology available for impingement mortality at the site. The Director would then include permit conditions that ensure the t echnology will perform as demonstrated. If the Director determines that additional data is required to identify permit operating conditions, the Director has the authority to establish such requirements under § 125.95(d). Note that the EPA envisions the st udy will function to optimize performance, which is not the same as requiring a study merely demonstrating a specific numeric limitslevel of performance for impingement mortality havehas been or can be achieved. For the majority of facilities, EPA expects annual performance using modified traveling screens will exceed the Agency’s calculated average annual performance standards for impingement mortality. Several examples of mo dified traveling screens in EPA’s record show annual performance for impingement mortality that is superior to the numeric limitimpingement mortality performance standard (e.g., lower than 10 percent). Similarly, facilities choosing to comply with § 125.94(c) by operating a system of technologies (under § 125.94(c)(6)) that will achieve the impi ngement mortality standard must submit a impingement technology perf ormance optimization study under §

98 For example, the St. Lucie generating facility determ ined that this arrangement was not appropriate at their site; see DCN 10-6515. The Brunswick facility, has a fish return flume that goes to a tributary rather than the intake canal or the river. This arrangement places the aquatic organisms away from the intake canal and in a more gentle water environment to increase the organisms’ su rvival; see DCN 10-6569.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 321 of 642 122.21(r)(6)(ii). The site-specifi c study must provide a descri ption of the technologies, operational measures, or monitoringsampling approaches or any combination of them to be used to meet the BTA for impingement mortality. The study must demonstrate that the system of technologies has been optimized to minimize impingement mortality. EPA notes the “system” may consist of one or more technologies al ready in place, or may be combined with newly installed technologies. Further, the study must include a minimum of two years of biological monitoringdata collection , as just described. The EPA is aware that it is possible fo r a facility to reduce its rate of impingement, but for the same number of impinged fi sh die. This has the unintended consequence of increasing the percent impingement mortality calculated by the facility. EPA does not intend for such facilities to be penalized for significant reductions in impingement rates obtained through existi ng technologies and practices in place. Therefore, one difference in the required study for the system of technologies compliance alternative (as compared to the study require d for modified traveling screens) is an understanding that operational measures, best management practices, intake location, and other technologies do not alwa ys lend themselves to di rect impingement mortality

measurements or monitoring.data collection. Thus the study can include flow measurements and monitoring the rate of im pingement (as opposed to directly monitoring mortality) as described below. If the facility chooses to rely on credit fo r reductions in the rate of impingement already achieved, the impingement technol ogy performance optimization study must document the reductions to be used as cred it. The estimated reductions in impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 322 of 642 must be based on a comparison of the facility to a once

- through cooling system with a traveling screen located on the shoreline of the source water bodywaterbody . For example, a facility with an offshore intake , an intake canal, or an intake located immediately downstream of a dam in a co ld water stream, could demonstrate the population of fish at the intake is lower in these areas, resulting in lower rates of impingement. This provision is intended to al low a facility that conducted or completed a baseline characterization under the Phase II rule to use that same information as part of their demonstration under this rule

. As discussed in Section VI, EPA has identi fied flow reduction as one of the best ways to reduce both impingement and entrainm ent. Today’s final rule, as part of the system of technologies compliance option at § 125.94(c)(6), provides the owner or operator of a facility the opportunity to demonstrate flow reduction as part of meeting the
IM performance standards. If the facility chooses flow reduction to reduce impingement, the study at § 122.21(r)(6)(ii) must include tw o years of intake flows measured daily. This flow information plus the data colle cted under § 122.21(r)(4)(iv) would be used to document how the flow reduction results in a reduced rate of impingement, as well as documenting the extent to which such reduc tions are seasonal or intermittent. Many pumps operate at only one speed, which doesn’t a llow the facility to ad just its intake flow to changing conditions. As a potential applica tion of § 125.94(c)(6), EPA is aware of a manufacturing facility that installed mu ltiple pumps of different sizes, and the plant operator only utilized those pumps that were necessary to obtain the exact amount of cooling water needed. As another example, va riable speed drives offer many facilities an*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 323 of 642 opportunity to reduce their intake flows by as much as 10 percent. Variable speed drives are available at all facilities, and EPA expect s variable speed drives will be considered when replacing existing recirculating pumps ,; however, EPA also acknowledges variable speed drives may not be practical in all case s. Nevertheless, EPA expects variable speed drives will be considered by the Director when establishing entrainment requirements under today’s final rule. EPA provided an exam ple of how a facility would receive credit for existing technologies in the NODA (s ee 77 FR 34322, June 11, 2011). An additional sample calculation that includes flow reduc tion is provided later in this section. The study must identify each of these cont ributing components, and requires the calculation of the impingement mortality re flecting each component of the system. The impingement technology performance optimizat ion study must demonstrate the system of technologies has been optimized to minimi ze impingement mortality. In addition, the study must document the percent impingement mortality reflecting optimized operation of the total system of technologies, operati onal measures, and best management practices at § 122.21(r)(6)(ii)(D). The Director may then determine the system of technologies is the best technology available for impingement reduction at the site. The Director would then include permit conditions that ensure the technology will perf orm as demonstrated. 6. § 122.21(r)(7) Entrainment Performance Studies EPA proposed that a facility must subm it all previously conducted performance studies, but has revised this provision in the final rule to include only entrainment related studies. Impingement performance studies, wher e relevant, are already part of the permit application at § 122.21(r)(6). This avoids im posing a requirement on all facilities to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 324 of 642 submit previous impingement studies that ma y be unnecessary, and eliminates a burden on the Director to review all such studie s, many of which may no longer be relevant. 99 Under today’s final rule, th e applicant must submit a de scription of any biological survival studies conducted at the facility a nd a summary of any conclusions or results, including the following: site -specific studies addressing technology efficacy, throughplantfacility entrainment survival (distingui shed for eggs and larvae), and entrainment studies;analyses, or studies conducted at ot her locations including a justification as to why the data are relevant and representative of conditions at the facility. Because of changes in the water bodywaterbody over time, studies older than 10 years must include an explanation of why the data are still rele vant and representative of conditions at the facility. If the data are no longer relevant a nd representative, the Director may reject the data. The Director uses such studies when establishing technol ogy-based requirements for entrainment. Permit applicants ar e not required to conduct new studies simply to fulfill this requirement. This requirement is rather aimed at obtaining results for relevant studies that have already been conducted as part of past permit proceedings or for other purposes even if those studies were not co mpleted or conducted entirely as planned.

99 For example, the study may be old and no longer representative, the study may address a pilot study of a technology no longer under consideration by the facility , or the facility may have already selected one of the compliance methods for IM based on pre-approved technologies at § 125.94(c)(1 ) through), (2) or (4).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 325 of 642 7. § 122.21(r)(8) Operational Status The applicant must submit a description of the operational status of each unit for which a cooling water intake stru cture provides water for cooling, including the following: descriptions of each individual uni t’s operating status including age of the unit, capacity utilization for th e previous five years (inclu ding any unusual or extended outages that significantly affect the facility ’s reporting of flow, impingement, or other data), and any major upgrades completed in the past 15 ye ars (e.g., boiler or condenser replacement, changes to fuel type, a new production line); a description of completed, approved, or scheduled uprates and NRC (Nuc lear Regulatory Comm ission) relicensing status for nuclear facilities; a description of plans or schedules for decommissioning or replacement of units; and a description of current and future pr oduction schedules for manufacturing facilities. The Director will use such information in determining the BTA for entrainment as well as when establis hing compliance schedules. For example, where the remaining useful plant life is consider ably shorter than th e useful life of an entrainment technology or where a facility has a pla nned retirement within the next permit cycle , this information is useful to support a determination regard ing that specific entrainment technology. This informati on would also be used under § 125.94(c)( 1312 ) to document infrequently used power generating units that are used only in emergency circumstancesoperate with a capacity utiliza tion of less than 8 percent averaged over a 24-month block contiguous period and that the Director may therefore determine

warrants IM controls less stri ngent than (c)(1) tothrough (c)(7). With respect to entrainment, the BTA for entrainment is dete rmined by the Director for each site, and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 326 of 642 energy reliability is one factor the Director may consider when establishing entrainment controls (see § 125.98(f)(3)). EPA expects the information submitted on energy reliability will be considered by the Director when making a BTA determination for entrainment for low CUR units. 8. § 122.21(r)(9) Entrainment Characterization Study Facilities that withdraw greater than 125 mgd AIF must develop a study that includes a minimum of two years of entrainment monitoring.data collection. EPA envisions the facility would modifyextend the data collection methods and frequency to develop the source water characterization already required by § 122.21(r)(4) to develop the Entrainment Characterization Study. The study would include complete documentation of the monitoringdata collection period and frequency of entrainment characterization, and an identification of the organisms monitoredsampled to the lowest taxon possible. The monitoringdata collection must be representative of the entrainment

at theeach intake, and the study must document ho w the location of the intake in the water bodywaterbody and the water column are accounted for. The study must document the intake flows associated with the monitoring.data collection. Consistent with the permit application requirement s requiring biological monitoringdata collection at § 122.21(r)(4) and (6), EPA requires at least two years of data to sufficiently characterize annual, seasonal, and diel variations in en trainment, including variations related to climate, weather, spawning, feeding, and wate r column migration. Al so consistent with the permit application requirements at § 122.21(r)(4) and (6), facilities may use historical data that are representative of current operation of the facil ity and conditions at the site*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 327 of 642 with documentation regarding the continue d relevance of the data. The study must include analysis of the monitoring data to determine total entrainment and entrainment mortality. Documentation in the study must in clude the method in which latent mortality would be identified, and all methods and quality assurance/quality control procedures for sampling and data analysis would be descri bed. The sampling and data analysis methods must be appropriate for a quantitative survey. This information is to be used towill help the Director determine the site-specific BTA for entrainment. For facilities with no en trainment technologies currently in place, this information characterizes the total potential for entrainment. The information can also be used to demonstrate that technologies and other measures already in place, or sitespecific factors such as intake location or design, already reduce entrainment. For example, abundance data might demonstrate lower comparative densities that can significantly lower entrainment rates. The in formation could also be used by new units under § 125.94(e)(2) to demonstrate that an alterna tive technology or combination of technologies reduce entrainment at that site to a level commensurate with closed-cycle cooling. 9. § 122.21(r)(10) Comprehensive Technical Feasibility and Cost Evaluation Study The owner or operator of the facility must submit an engineering study of the technical feasibility and incremental costs of candidate entrainment control technologies. The study must include an evaluation of techni cal feasibility of clos ed-cycle cooling and fine-mesh screens with a mesh size of 2mm2 mm or smaller, reuse of water or alternate sources of cooling water, and any other en trainment reduction t echnologies identified by*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 328 of 642 the applicant or requested by the Director. This study must include a description of all technologies and operational measures consid ered (which could include alternative designs of closed-cycle recirc ulating systems such as natura l draft cooling towers, hybrid designs, compact or multi-cell arrangements, or the conversion of helper towers to a fully recirculating system); and documentation of factors that make a candidate technology impractical or infeasible for further ev aluation. For example, a discussion of land availability might include an evaluation of adjacent land, and acres potentially available because of generating unit retirements, produc tion unit retirements, other buildings and equipment retirements, ponds, coal piles, rail yards, transmission yards, and parking lots; decommissioning of existing units; repurposing of existing land uses; documentation that insufficient acres are available on-site; and ev idence of the feasibility of the purchase or other acquisition of property adjacent to the facility. For the analysis of water reuse and use of alternate sources of cooling water, the owner or operator must examine the availabl e alternatives for reuse of effluent from within the facility or from ot her dischargers in the vicinity. [NOTE to reviewers: EPA would like to cite here as support for this material the draft DOE report on “U.S. Energy Sector Vulnerabilities to Climate Change and Extreme Weather” when it is public.] The volume of water available need not be for th e full intake flow; reuse of water could contribute to a partial reduction in flow at the facility. Additiona lly, if the facility were to retrofit to a closed-cycle system, the si gnificant reduction in flow may make nearby alternative sources more feasible . This analysis should include an estimate of the cost to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 329 of 642 build any new infrastructure (e.g., pipi ng, pump houses) and the ongoing operational costs (e.g., pump costs) for the Director’s consideration. The final rule requires that the cost inform ation be presented as both the facility’s compliance costs and the social costs, and in net present value (NPV) terms and the corresponding annual value. Social costs are the costs estimated from the viewpoint of society, rather than individua l stakeholders. Social cost represents the total burden imposed on the economy; it is the sum of all opportunity costs incurred. See Chapter 8 of EPA’s 2010 Guidelines for Preparing Economic Analyses . (DCN 10-3258). Some adjustments to facility complia nce costs to produce social co sts cause them to be higher than compliance costs, while other cause soci al costs to be lower. Although a facility makes investment decisions by taking tax cons equences into account (a fter-tax costs), the favorable tax treatment of investments is viewed as a transfer and not a real resource cost, thus pre-tax costs are used in social cost an alysis. From society’s viewpoint, costs in the future must be amortized and discounted to net present value using a social discount rate, rather than a market cost of capital as reflected in market interest rates. The Office of Management and Budget ( OMB ) Circular A-4 (DCN 10-3266) instructs agencies to use both 3 percent and 7 percent discount rates. Certain administrative costs are not borne by a facility, but rather the permit director, and should be included in social costs. by the Director, and are social costs. Compliance costs include the facility’s administrative costs, including costs of perm it application, while the social cost adjustment includes the Director’s administrative costs. EPA has esti mated the Directors’ administrative costs in the ICR for the final rule, and describes the methodology for estimating these costs in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 330 of 642 detail in the EA. Facilities may adopt a similar approach to including Director’s administrative costs in their social cost esti mates. In addition, this component is not expected to be large or to vary significantly across t echnology options considered. From a facility’s viewpoin t, downtime costs include lost net revenue, while from society’s viewpoint, if another facility is di spatched or inventory of manufactured goods can be sold, the only social cost of downtime is any incr ease in marginal costs of production at other facilities dispatched or th e cost of holding invent ory. Unless a facility can demonstrate that its costs of complianc e will result in lower overall supply in the markets in which its products are sold, and th at the effect of the lowered supply is an increase in market price and lower quantity of product sold, the facility should not make a social cost adjustment to reflect these larger market impacts. In addition to the required social cost s, the owner or operator may choose to provide facility level compliance costs; how ever, such costs must be provided and discussed separately from social costs. The cost evaluation component of this study must include engineering cost estimates of all t echnologies considered above and also discuss and provide documentation of any outages, dow ntime, energy penalties or other effects on revenue. The cost evaluation should be based on least-cost approaches to implementing each candidate technology while meeting all regulatory and operational requirements of the plantfacility . Depreciation schedules, in terest rates, further consideration of remaining usef ul life of the facility as di scussed in § 122.21(r)(8), and any related assumptions must be identified. Th e owner or operator of the facility must*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 331 of 642 obtain peer review of the Comprehensive Technical Feasibility and Cost Evaluation Study, as described in sectionSection 12. 10. § 122.21(r)(11) Benefits Valuation Study The owner or operator of the facility must submit a detailed discussion of the magnitude of water quality benefits , both monetized and nonmonetized, of the candidate entrainment reduction technologies ev aluated in § 122.21(r)(10) and using data in the entrainment characterization studyE ntrainment Characterization Study in § 122.21(r)(9 ), including). Each category of benefits should be described narratively, and when possible benefits should be quantified in physical or biological units and monetized using appropriate economic valuation methods. This includes incremental changes in the impingement mortality and entrainment of individual fish and shellfish , and monetization for all exposed life stages, estimation of these changes to the extent appropriate in stock and feasible using the best ava ilable scientific, engineering,ha rvest levels of commercial and economic informationrecreational species, and description of any monetization . This may include monetization using ma rket values, market proxies ( e.g., models based on travel costs or other methodologies), benefits transfer and stated preference methods. Benefits that cannot be monetized should be quantified where feasible and discussed qualitatively where not. The study must identify increasesincreased or decreased thermal discharges, and must evaluate the potential changes in facility capacity, operations, and reliability due to relaxed permitting constrai nts related to therma l discharges. The study must also include discussion of recent mitigation efforts already completed and how these have affected fish abundance and ecosystem vi ability in the intake structure’s area of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 332 of 642 influence. Finally, the study mu st identify other be nefits to the environment and the community, including improvements for mamm als, birds, and other organisms and aquatic habitats. The owner or operator of th e facility must obtain peer review of the benefits evaluation study, as described in sectionSection 12. EPA expects peer reviewers to have appropriate qualifications ( e.g. , fisheries biologist, ec onomist) for the subject matter. The Director may consult with EPA and Federal, State and Tribal fish and wildlife management agencies with respons ibility for fish and wildlife potentially affected by the cooling water intake struct ure(s) to determine which peer review comments must be addressed by the final study. The director may waive the requirement to conduct the benefits valuation study if the director does not intend to use this information in determining the entrainment reduction requirements for the facilityThe dollar values in the social benefits anal ysis should be base d on the principle of willingness-to-pay (WTP), which captures monetary benefits by measuring what individuals are willing to forgo in order to enjoy a particular benefit. While the Director must consider benefit and cost information, the Director will also determine if this information is of sufficient rigor to make a decision on entrainment controls on the basis of this information. For instance, the Direct or may decide not to rely on benefit-cost information in establishing the entrainment cont rols when the benefits analysis includes only a qualitative discussion of nonuse benefits . Willingness-to-pay for nonuse benefits can be measured using benefits transfer or a stated preference survey. However, the rule does not require the Director to require a faci lity owner or operator to conduct or submit a stated preference survey to assess benefits

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 333 of 642 11. § 122.21(r)(12) Non-Water Quality Envir onmental and Other Impacts Assessment The owner or operator of the facility must submit a detailed discussion of the changes in non-water quality environmental a nd other factors attributed to technologies or operational measures, or both, considere d. These changes may include, for example, increases or decreases in the following: ener gy consumption; air pollutant emissions and their health and environmental impacts; noise; safety concerns, such as the potential for plumes, icing, and availability of emer gency cooling water; grid reliability , including an estimate of changes to facility capacity, opera tions, and reliability due to cooling water availability; consumptive water use (includi ng effects of surface water evaporation of thermal discharges); and facility reliability , such as production of steam and impacts to production based on process unit heating or coo ling. The owner or opera tor of the facility must provide for peer review of the Non-Wa ter Quality Environmental and Other Impacts Assessment as described in the following section. 12. § 122.21(r)(13) Peer Review The owner or operator of the facility must provide for peer review of the permit application studies required at § 122.21(r)(10) Comprehensiv e Technical Feasibility and Cost Evaluation Study, § 122.21(r)(11) Bene fits Valuation Study, and § 122.21(r)(12) Non-Water Quality and Other Impacts Assessmen t. While facilities that withdraw more than 125 mgd AIF must conduct these studies an d therefore must provide for peer review, facilities that withdraw equa l to or less than 125 mgd AIF may have study requirements including peer review as determined by the Director. In today’s final rule , EPA did not adopt separate peer review requirements fo r the Entrainment Characterization Study at §*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 334 of 642 122.21(r)(9), because this data would be included in the other components that are peer reviewed. Further, the entrainm ent characterization study is used in the Comprehensive Technical Feasibility and Co st Evaluation Study, Benefits Valuation Study, and NonWater Quality and Other Impacts Assessment, and these studies are already subject to peer review. For these reasons, EPA reduced th e burden in the final rule by eliminating the peer review requirement fo r entrainment characterization. EPA recognized at proposal that in ma ny cases it is more efficient for permit applicants to combine the re quired studies into one document and have them reviewed holistically by a single set of p eer reviewers. Such an approach is allowed by the final rule , as long as the peer review panel has the background appr opriate to conduct a complete and combined review and the Director approves. The Director may consult with Federal, State and Tribal fish and wildlife management agencies with responsibility for fi sh and wildlife potentially affected by the cooling water intake structure( s). Further, the Director may require the owner or operator of the facility to include additional peer reviewers of the studies. EPA expects peer reviewers to have appropriate qualifications (e.g., in the fi elds of biology, engineering) for the subject matter. An explanation fo r any significant reviewer comments not accepted must be included in the final study submission. Additional guidance on conducting peer review is available on EP A’s Peer Review Program website at www.epa.gov/peerreview.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 335 of 642 13. § 122.21(r)(14) New Units New units at existing facilities must id entify the compliance method for the new unit under the permit applicati on requirements at § 122.21(r )(14). Where the facility complies with BTA standards for entrainment at § 125.94(e)(1) by reducedreducing its intake flows commensurate with that of a closed-cycle recirculating system , (as defined at § 125.92(c)(1)), the BTA standards for impingement mortality will have been met by § 125.94(c)(1). To comply with the alternative at § 125.94(e)(2), there must be a demonstration that entrainment reductions e quivalent to 90 percent or greater of the reductions that could be achieved through compliance with § 125.94(e)(1). 100 In this case, permit application requirement § 122.21(r)(14) requires this demonstration to include the entrainment characterization studyE ntrainment Characterization Study at § 122.21(r)(9). The Director may determine additional data and information, including monitoringdata collection , is necessary to ma ke the demonstration.

100 Note that a new unit may construct a new intake structure or utilize capacity from an existing intake structure. For the former, the requirements of (e)( 1) and (e)(2) are1are simple to conceptualize and apply. But for the latter, EPA clarifies that the new unit require ments only apply to that portion of the flow that is serving the new unit. For a new unit using an existing intake structure that chooses to comply using (e)(1), demonstrating that the new unit achieves the required reduction in flow should be a relatively simple exercise in identifying intake flows and the distribu tion of cooling water from the intake structure. For a new unit using an existing intake structure that chooses to comply using (e)(2), the facility would demonstrate that it has reduced entrainment for that portion of the intake flow serving the new unit by 90 %; percent; the facility would not be required to reduce entrai nment for the flow of the entire intake structure by 90 %, percent, unless the Director makes such a site-spe cific determination fo r entrainment at the existing units as well.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 336 of 642 D. When Are Permit Application Studies Due? The owner or operator of a facility ap plying for reissuance of a permit must submit the information required at § 122.21(r) to the Director no later than 180 days before the current permit expires. Those facil ities that were subjectto the section 316(b) Phase II rule from February 16, 2004 until su spension of that rule on July 9, 2007 were already collecting some information required at § 122.21(r). EPA has structured this rule to take advantage of those data and expects facilities to use them when they satisfy requirements for permit applications. In some cases, required permit application information might have been collected, but reports might not have been generated or finalized prior to the rule suspension in 2007. Further, facilities not subject to the Phase II rule might not have collected this information, ( e.g., existing power plants below 50 mgd DIF and all existing manufacturers ,) might not have collected this information or might not have collected information to identify permit operating conditio ns. In those cases, facilities would have to collect additional data in order to have two years of biological monitoringdata collection . EPA expects associated studies and reports will take several additional months to complete. For this reason, EP A has established a provision for permit application submittal for a permit expiring prior to December 31, 2016, [INSERT date 45 months after the effective date of the final rule] , allowing the Director flexibility to delay application requirements based on a showing by the owner or operator that it could not develop the information by the time require d for submission of the permit application. The Director would then establish a sche dule for submission of the delayed permit*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 337 of 642 application requirements. EPA notes that th e Director has the di scretion to require additional studies, monitoringdata collection , or an on-site inspection as part of the permit
process. Facilities whose permit expires after [INSERT date 45 months after effective date of the final rule] would submit all required mate rials in § 122.21(r) with their permit renewal application. New units at existing facilities must submit the information required at § 122.21(r) to the Director no late r than 180 days before commencing operation of the new unit. Because these units are be ing constructed at a facility that is already operating, the facility will have already submitted many of the permit application materials. The addition of a new unit would require an update of or supplement to permit application materials that have already been submitted. New units take significant time and resources to plan, design, and construct ,; therefore the final rule does not have a provision to waive permit application requirements based on a show ing by the owner or operator that it could not develop the information by the ti me required for submission of the permit application. For permit renewals subsequent to the first permit issued under today’s rule, the new unit would be included in the assessm ent of the entire facility and would no longer require unique permit application submissions. As discussed previously, the owner or operator is encouraged to submit app lications well in advance of the 180 day requirement to avoid delay. EPA is aware that some intake structur es withdraw from a manmade lake or reservoir that is stocked and managed by a St ate or Federal natural resources agency. In*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 338 of 642 some cases, the biological characterization of the source water is heavily influenced by the actions of the natural resources agen cy. Further, the results of biological monitoringdata collection and studies may be confounded by such actions. Today’s final rule at § 125.95(a)(3) gives the Director disc retion to waive some or all of the permit application requirements of § 122.21(r) in such circumstances. In permit terms subsequent to the firtfirst permit issued under the final rule, the facility will re-submit the § 122.21(r) permit application studies, andwhile the rule still includes two years of biological monitoringdata collection for some facilities. In this manner, the biological characterization over time would be routinely evaluated, i.e., every 5 years under a standard permit cycle. To reduce the burden of such monitoring and data collection, however, the final rule provides th at the owner or operato r of a facility may submit a request to the Director to re duce the information required. See 40 CFR 125.95(c). In most cases, EPA anticipates the fa cility would make any such request prior to conducting its two years of biological monitoringdata collection . Therefore the request for reduced information requirements must be submitted to the Director at least two years and six months before the expiration of the facility’s NPDES permit. The Director may approve such a request if conditi ons at the facility and in the water bodywaterbody remain substantially uncha nged since the previous permit application. 101 EPA expects the

101 The presence of any habitat designated as critical, or species listed as threatened or endangered after issuance of the current permit (who se range of habitat or designated cr itical habit includes waters where a facility intake is located) constitutes potential for a substantial change that must be addressed by the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 339 of 642 Director would assess the relevant previously submitted information and determine ifwhether it remains representative of current s ource water, intake structure, cooling water system, and operating conditions. Acco rdingly, the Director may accept or reject any part of the request. E. How Will the Director Determine the Best Technology Available for Minimizing Adverse Environmental Impacts?
1. Review and Approval of Pe rmit Application Materials Under today’s rule, the Director will re view all materials submitted by an existing facility with its permit app lication to determine appropria te NPDES permit conditions and requirements reflectingto minimize impingement mortality and entrainment. As stated at 40 CFR 125.98(a), the Director sha ll not issue a permit before receiving a permit application form and any supplemental information which are completed to his or her satisfaction (see existing Permit Applicati on and Special NPDES Program Requirements at 40 CFR 122.21(e)). Facilities with a design intake flow at or below 2 mgd will continue to have permit conditions set on a case-by-case, best professional ju dgment basis under 40 CFR 125.90(b) and 401.14. For such facilities, howev er, the Director may choose to apply some portions of the permit appli cation conditions in today’s rule , to aid in the BPJ determination.

owner/operator in subsequent permit applications, unless the facility recei ved an exemption pursuant to 16 U.S.C. 1536(o) or a permit pursuant to 16 U.S.C. 1539 (a) or there is no reasonable expectation of take.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 340 of 642 The Director is encouraged to expeditiously provide any comments on submitted materials so the facility can make responsiv e modifications to its information gathering activities. For permit applications subsequent to the first permit issu ed under today’s rule, the Director could indicate whether reduced or different information must be submitted with the permit application. More specific responsibilities ar e described below: (1) a. If the Director has made a BTA determination for entrainment before the effective date of the rule, and substantially the same information was already submitted and considered by the Director in making that determination, under § 125.98( bg ) the Director may proceed with the Determinati on of BTA without requiring the owner to submit the information required in § 122.21(r). To clarify further, EPA has included a “transition” provision at § 125.98(g) of today’s rule that makes it clear that fo r any facility that has submitted a permit application before the effectiv e date of the regulation, the Di rector may select the best approach to development and implementation of the next permit. These provisions are intended to avoid any unnecessary delay in recently submitted permit applications or draft permits. EPA expects that fac ilities will continue with any monitoringdata collection requirements, study requirements, and sche dules in recently issued permits. (2) b. If the Director establishes a co mpliance schedule under § 125.94, the Director will establish a schedule that sets requirements as soon as possible.practicable. In establishing the schedule, the Director is encouraged to consider the extent to which those technologies proposed to be implemented to meet the requirements of § 125.94(d) or (e) will be used, or could otherw ise affect a facility’s choi ce of technology, to meet the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 341 of 642 requirements of § 125.94(c). Impacts of therma l discharges, along with other stressors, might be a relevant consideration when a ssessing benefits of technologies to reduce impacts of cooling water intakes or discharg es. The Director is also encouraged to consider energy reliability, transmission capacity, and grid requirements when establishing a schedule for electric power gene rating facilities. The Director may confer with local and regiona l electric power agencies and state utility regulators when establishing a schedule for electric power generating facilities (see DCN 12-XXX10-
6860 for information on the approach taken by California). The Director may determine that extenuating circumstances (e.g., lengt hy scheduled outages, future production schedules) warrant establishing a different compliance date for any manufacturing facility. (3) c. The Director will review the permit application materials and studies submitted under § 122.21(r) and determine which entrainment controls are necessaryappropriate . Factors whichthat must be considered and factors whichthat may be considered in making the determinati on are provided at § 125.98. The Director willmust issue a written explanation for the BT A determination and must make this determination, and any other information subm itted by third parties, available with the permit for public review. This determination is expected to be issu ed as part of the permit’s statement of basis under 40 CFR 124.7.
2. Role of Social Cost-Benefit Analysis in Permit Determinations In deciding what technology to require a permittee to install to address entrainment, the Director may undertake an ev aluation of social costs and benefits of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 342 of 642 implementing such requirements. This anal ysis will be based on the information submitted by the applicant, supplemented by any information submitted by third parties, and additional information as determined a ppropriate by the Direct or. EPA recognizes the resource limitations faced by permitting authori ties and does not generally expect that the Director would develop additi onal information on which to ba se the evaluation of social benefits and costs, although th e Director may opt to do so. EPA is committed to working with the states to support their site-specifi c permitting decisions with the benefit of the SAB review once it is completed. This analysis should evaluate benefits and costs from the perspective of society as a whole, rather than costs and benefits accruing to limited parties (e.g., very local populations or th e permittee, which pres ents a limited set of information to the Director). It is also important to note that the stated preference surv ey conducted by EPA which was discussed in the June 12, 2012 Notic e of Data Availability (77 FR 34927) was designed to estimate respondents' willingness to pay for changes in the health of fish populations and aquatic ecosystems and be sta tistically representative at large (regional and national) scales; the results were not designed to be statis tically representative at the facility level for the assessment of benefits for individual site-level permitting decisions. Today’s final rule does not requ ire the Director to require a facility owner or operator to conduct or submit a stated preference survey to assess benefits. Furthe r, the rule does not limit the Director’s discretion to consider non-water quality imp acts in determining whether further entrainment measures are justified.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 343 of 642 A number of cost elements should be accounted for in assessing the social cost of entrainment technology implementati on. These are summarized below.

a. Technology installation cost. These peer-reviewed engineering cost esti mates of the physical construction of candidate entrainment technologies at the f acility are required. These costs would be provided by the applican t under § 122.21(r)(10). b. Installation downtime cost. Installation of closed-cycle cooling systems will often require generating facilities to take additional downtime be yond ordinary annual maintenance downtime. An estimate of downtime cost to the facility is required under § 122.21(r)(10). EPA expects a facility will document that portion of downtime that is incremental to any downtime the facility already incurs due to, for example, routin e maintenance outages, overhauls, refueling, and periodic replacement of equipment th at is at the end of its useful life. Downtime costs to the facility include the value of lost production (e.g., electricity) minus any variable cost savings, as well as any other costs to the facility associ ated with downtime (shutdown and startup routines, sp ecial maintenance protocols, and such)etc.) minus any savings associated with downtime. DowntimeIf they are considered in the social costs analysis, downtime costs must be adjusted to re flect production made up by other facilities or firms if they are considered in the social costs analysis, , because these temper the real resource co sts from society’s viewpoint. The cost of downtime is determined on a different basis for social cost. Specifically, the cost of downtime to society is the cost incurred for other fac ilities and generating units to make up the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 344 of 642 electricity or manufactured goods that woul d have otherwise been generated by the facility minus the cost that would have othe rwise been incurred by the facility incurring downtime. This difference in cost reflects th e additional cost, if any, that society must pay to generate the replacement goods, and ma y differ substantially from the cost of downtime to the facility.

c. Energy penalty cost. Operation of closed-cycle cooling systems may impose an energy penalty. Here, EPA is using energy penalty to mean only mean the opportunity costs associated with reduced power production due to derating (turbi ne backpressure). Energy penalty does not include the costs to operate pumps and fa ns associated with closed-cycle cooling, which are operation and maintenance costs (and covered below). U nder well-established principles in benef it-cost analysis, the energy penalty is not an opportunity cost to society, except to the extent that supplie rs making up the lost production have higher variable costs of production, and only that cost differential is a social cost. Again, an assessment of these costs to the facilitycost of the energy penalty to the facility is not the opportunity cost to society. Instead, the cost to society is the co st of generating the electricity, whether incurred by th e regulated facility or anothe r facility, that is no longer available for consumption because of the ener gy penalty. This cost may be incurred by the facility, if it can increase the energy input to, and output from, the generating unit to generate the electricity that is otherwis e no longer available for consumption, or by another generating unit if the regulated unit cann ot make up the electricity. In either case, the social cost of the energy penalty is the cost of generating the electricity that would*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 345 of 642 otherwise be available for consumption except for the energy penalty. Again, an assessment of these costs would be determined under the § 122.21(r)(10) demonstration. d. Operation and maintenance costs for th e entrainment technology equipment. The cost of energy to operate the entrai nment technology for electric generators should appear in the operation and maintenance costs, and not in the energy penalty. These costs, which would be estimated as pa rt of the § 122.21(r)(10) assessment, would enter the social cost framework unchanged, b ecause it is a real oppor tunity cost.along with other labor and materials costs. In the same way as described above, the social cost of the energy required to operate entrainmen t technology is the cost for generating this electricity, as it is otherwise no longer availa ble for end-use consumption. This cost could be incurred by the regulated facility, if it ha s sufficient capacity to make up the loss, or by another facility, if the regulated facility is no t capable of generating th e electricity that is no longer available for end-use consumption.

e. Other administrative expenses – e.g.,. This includes additional permitting or reporting expenses, or both. Being aFor social cost conceptcosts , the estimate should include the costs to the facility and those expected to be incurred by the Director. EPA has estimated the Directors’ admini strative costs in the ICR for the final rule, as explained in the EA , and facilities may adopt a similar approach to estimating these costs at the permit level. For assessing social cost, the cost elements outlined above would typically be accounted for on a real cost basis—that is, pre-tax and without adjusting for future inflation. Costs are tallie d over an appropriate time frame, which will*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 346 of 642 typically be the expected usef ul life of the technology installa tion or the remaining life of the facility, if less. Costs s hould be calculated as both net present value and annualized values, using an appropriate social discount rate. The applicant should document the basis for the discount rate chosen , and its methodology and calculations

. f. Benefits In assessing the benefits of entrainmen t technology installation, the Director would assess the value to society from the reductions in impingement mortality and entrainment that would result from installati on of a closed-cycle cooling system, fine mesh screens, or other entrainment tec hnologies. All benefits, including monetized, quantified and qualitative benefits, should be co nsidered in this assessment. The benefits assessment would typically look at a range of potential benefit mechanismscategories , including increased harvest for commercial fisheries, increased use values for recreational fisheries, and non-usenonuse values (existence and bequest values). The latter may be difficult to quantify or moneti ze. If appropriate data are available from benefits transfer or conducti ng stated preference studies or other sources that can be applied to the site being evaluate d, these should be used to monetize non-usenonuse values. Otherwise, non-usenonuse values should be evaluated quantitatively and/or qualitatively. Quantitative analysis, even wit hout monetization, can be quite useful in evaluating non-usenonuse benefits. For example, quantifying impacts to forage and threatened and endangered species, and other indirect impacts on the aquatic environment, might allow th e Director to derive a much more complete understanding of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 347 of 642 benefits as compared to a qualitative narrative , even if not directly comparable to monetary costs. Quantifying and valuing the benefit categor ies listed above involves significant challenges, as described in the BA. For exam ple, assessing the produc tivity and value of commercial fisheries involves estimating the expected increases in commercial yield of economically valued species over time as a result of reduced impingement mortality and entrainment, and valuing these at market pr ices minus any incremental production costs associated with the incremental catch. Similarly, assessing recreational use benefits involves estimating the improvements in recr eational fishing opport unities resulting from reduced impingement mortality and entrai nment, and assigning a value to these improvements. The value assignment is ba sed on the estimated population profile—in particular, number and proxim ity to affected water resour ces—of recreational users, the availability of alternative competing water resources for recreational usage, and the resulting estimated change in demand for use and value of the affected water resources based on reduced impingement mortality and entrainment and increased recreational fishing performance. EPA acknowledges this could be difficult to do even on a sitespecific basis.
Non-useNonuse benefits, which encompass existe nce and bequest values, include impacts in such areas as population resili ence and support, nutrient cycling, natural species assemblages, and ecosystem health and integrity. Non-useNonuse values include improving the survival probability of a threatened or endangered species if present in the vicinity of the facility. Benef its might also need to be assessed beyond the vicinity of the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 348 of 642 facility’s intake if migrat ory species are affected by th e intake. Residual impacts of thermal discharges might also be appropria te to consider in the social benefits calculation. In much the same way as described for the social cost assessment, social benefits are tallied yearly over th e expected performance life of the compliance technology. If possible, thisThis tallying should account fo r the “phase-in” of benefits (e.g., benefits may build up over time as the impingement mo rtality and entrainment reductions affect commercial fisheries productivity). Benefits are computed on a present value basis and annualized using an appropriate discount rate as described above. The same discount rate should be used for benefits and costs. Often, it is appropriate to cal culate benefits and costs using more than one discount rate. Fo r example, for regulatory impact analysis, the Office of Management and BudgetOMB recommends that federalFederal agencies use both a 3 percent and a 7 percent rate. However, comparisons between specific benefit and cost numbers should always involve va lues computed using the same rate. The resulting estimates of social cost and benefits maymust be taken into accountconsidered in reaching determinations on whether to require a permittee to install entrainment technology and the specific level of entrainment technology to be installed. The Director may reject otherwise availabl e technologies as the BTA requirements for entrainment controls if the social costs of compliance are not justified by the social benefits, or if there are othe r adverse impacts that cannot be mitigated that the Director deems to be unacceptable. If all technologies co nsidered have social costs not justified by the social benefits, or have unacceptable a dverse impacts that cannot be mitigated, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 349 of 642 Director may determine that no additiona l control requirements are necessary beyond what the facility is already doing. The Dire ctor should document the basis for such a determination and include it in the public notice for the draft permit. (4) 3. Streamlined Process The process for complying with the impinge ment mortality standards is expected to be highly streamlined. As shown in Exhi bit VIII-1, EPA expects more than 99 percent of facilities will comply by one of the six compliance options that do not require continual biological complian ce monitoring (one of the fourthree compliance alternatives based on pre-approved tec hnologies or one of the twothree streamlined compliance alternatives). If a fac ility chooses to comply by operati ng a modified traveling screen, the Director will review the impingement technology performance optimization study, including the identification of species, dur ation and structure of the study, and any monitoring requirements. (5) 4. De Minimus Provision The Director may, based on a review of data submitted under § 122.21(r), conclude that the documented rate of impingeme nt at the cooling wate r intake structures is so low that no additional controls are warranted. As described in section I.A.H, low flow facilities may in particular be ca ndidates for such consideration, although the authority of the Director is not limited to lo w flow facilities. The Director may want to consider facility withdrawal rates in relati on to the mean annual flow of the river and possible co-location with other CWISs wh en making a de minimis determination. Notice of this determination would be included in the draft permit made available for public*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 350 of 642 comment, and the Director’s response to a ny comment on this determination must be included in the record for the final permit. EPA expects this determination to occur only in those circumstances where th e rate of impingement may be so exceptionally low as to be insignificant. EPA considers low rates of impingement to be measured as an organism or age-one equivalent count, and not as the effect of impingement on fish populations. The Director may require monitoringdata collection to demonstrate support for a de minimis level of impingement. The Director should se riously consider finding § 125.94(c)(12) to be not applicable whenever a facility’s intake is located in waters in the range or designated critical habitat of thr eatened or endangered species. The Director should also seriously consider finding § 125.94(c)(12) to be not applicable whenever a facility’s intake is located in waters not m eeting a designated aquatic life use, whether the waters are currently subject to a TMDL or not. In addition, EPA does not expect that a de minimis exemption would apply to facil ities with no technology present other than trash racks . EPA has determined , a technology that nearly all facilities employ. In making a determination that no additional cont rols are warranted, the Director may wish to consider factors such as whether the waters are subject to a TMDL , nonattainment of for an aquatic life use, th e waters are not attaining a designated use or habitat for , and there would be more than minor detrimental effects on threatened or endangered species will confound a Director’s ability to make a de minimis determination.or critical habitat. The Director will still establish proper operation and maintenance conditions in the permit whenever making a de minimis finding that no additional controls are warranted. EPA did not identify sufficient data to esta blish a numeric threshold for making such a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 351 of 642 determination, but intendsEPA notes that th e de minimis provision for impingement does not necessarily mean a facility has a de mi nimis level of entrainment. The life stages affected by impingement are different than t hose affected by entrainment, and low counts of impingeable life stages do not always mean the counts of entrained organism are similarly low. Since the entrainment require ments are already determined by the Director for such circumstances to be very limited. Further, theeach site, EPA concluded that specific regulatory language for de minimis entrainment was unnecessary. 5. Low Capacity Utilization Units The Director may consider less stringent controls for intakes dedicated to low capacity utilization rate (CUR) power generating units operated solely for emergency
purposes . If an existing facility has a cooling wa ter intake structure used exclusively for one or more existing electric generating un its, each with an annual average capacity utilization rating of less than 8 percent for each of the previous 5 yearsaveraged over a 24-month block contiguous period , the owner or operator may request that the Director establish BTA standards for impingement morta lity for that cooling water intake structure which are less stringent th an (c)(1) to (c)(7). This provision at 125.94( c)(13) applies to cooling water intakes for those generating units that supply power only occasionally, such as a generating unit maintained to pr ovide backup power resources in a crisis, natural catastrophe, or when regular system s fail. This provision does not apply those electric generating units run when there is a high demand or peak demand for electricity, such as seasonally operated peaking units. The owner or operator would demonstrate whether they have an intake serving one or more low capacity utilitization power*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 352 of 642 generating units used solely for emerge ncy purposes in permit applicationWhen determining the permit’s IM requirements at 122.21(r)(3associated with the low CUR unit, the Director may consider , after conferring with any ap propriate state co-regulators (such as public u tility commissioners ) and (8).with regional transmission organizations, independent system operators or other planni ng authorities, the significance of the unit’s operation to the overall reliability of electric power in the area. (6) In addition, in determining the IM requirements associated with a low CUR unit, the Director should cons ider any seasonal factors for affected species that might justify seasonal limits on the unit’s operation, for example any increased impacts resulting from the unit’s operation during sp awning runs. Also, when considering the presence and potential effects to threatened and endangered species, the Director should consider whether the life stages present at the location are at risk of being impinged or entrained at the low CUR unit’s cooling water intake. In the event that the Dire ctor determines less stringent controls for intakes dedicated to low capacity utilization power ge nerating units are appropriate, they should consider, at a minimum, the follo wing in establishing controls: Strategies for minimizing water withdraw al during stand by periods of operation, startup/shutdown, and on-line periods of operation; The effectiveness of installing variable speed pump drives to reduce water withdrawals during all periods of operati on, particularly during stand-by periods of operation; and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 353 of 642 The effectiveness of instal ling alternative equipment (e .g. behavioral deterrents) to minimize impingement mortality. The owner or operator would demonstrate whether they have an intake only serving one or more low capacity utilization power generating units in permit application requirements at § 122.21(r)(3) and (8). U nder § 122.21(r)(6), th e owner or operator would indicate a request that the Director establish altern ative BTA standards that are less stringent than § 125.94( c)(1) through (7). EPA rec ognizes the contribution of peaking units in serving peak electricity de mands, and maintaining a reliable electricity grid. However, if peaking units are in sta ndby mode for long periods relative to periods when they are generating electricity, the result is a capacity utili zation of the cooling water intake that is greater than the capaci ty utilization of the generator. Significant periods of standby could contribute to a gr eater impact on aquatic life. While the 8 percent capacity utilization is an industry st andard that distinguishes those units making the greatest contribution to a smoothly func tioning electricity grid, a Director may still determine that the impacts to aquatic life are significant e nough to deny a request that BTA at that intake should be less stringent than (c)(1) to (c)(7). EPA anticipates the Director will have the information necessary to determine BTA in such circumstances based on the permit application requireme nts, including but not limited to an identification of the number of days the coo ling water system is in operation, flow on those days, and seasonal changes in the ope ration of the system under § 122.21(r)(5) and the biological information under § 122.21(r)(4).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 354 of 642 As discussed previously, the Director will determine the BTA for entrainment for low CUR units on a site-specific basis. EP A expects that many of the same factors discussed above – including the significan ce of the unit’s operation to the overall reliability of electric power in the area, the diversity of fuels available for the unit, and the impact of the costs of any potential en trainment requirements on the unit’s cooling water intake structure on overall reliability of electric power in the area – will be relevant in making site-specific BTA entrainment determinations for low CUR units. The Director may consider the factors at § 125.98( f)(3) when making these determinations for low CUR units, which includes grid reliability, among other factors. 6. Monitoring The Director will review any impingement mortality and entrainment monitoring reports submitted by the facility to ensure ongo ing compliance. EPA is shifting toward an electronic discharge monitoring report syst em, and many of the impingement mortality and entrainment standards can be incorporated into the discharge monitoring report itself, rather than requiring a separate report. Ex cept for facilities choosing alternatives § 125.94(c)(7 ) or (e)(2), the rule requires the), detailed biological monitoringdata collection would only be included as part of the facility’s permit app lication submission and not for compliance purposes. The Director has the discretion to request additional information, including inspection of th e facility, at § 125.95 (d) ( i.e., permit application and supporting information requirements) and § 125.96 (c) ( i.e. , additional monitoring requirements). 7. Nuclear Units*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 355 of 642 The rule includes a provision that permits the owner of a nuclear facility to demonstrate to the Director that compliance w ith the rule would result in a conflict with safety requirements for their facility. See § 125.94(f). EPA anticipates that this provision would be implemented as follows. Initiall y, the Director will draft a permit and will share the draft permit with the owner or operator of the nucle ar facility. Upon reviewing the draft permit, the owner or operator will determine whether in their view a conflict with a safety requirement established by the Nuclear Regulatory Commission, the Department of Energy or the Naval Nuclear Propulsion Program exis ts. If a conflict exists, the owner or operator should communicat e the conflict to the NRC, Department or Program and the Director. In all cases, wh ether a conflict exists or not, the Director should notify the NRC, Department or Program and the owner or opera tor of the facility that he or she wishes to informally confer re garding the permit. Such interactions should be scheduled, conducted and documented. Wher e a conflict is identified, the Director would make a site-specific BTA determination. F. What are Example Permit Conditi ons and Compliance Monitoring for Impingement Mortality? As previously discussed, the owner or ope rator must comply with BTA standards

as soon as possiblepracticable on a schedule of requirements established by the Director. EPA did not specify dates by which the BTA standards for impingement mortality must be met because the specific method of compliance with the BTA standards for impingement mortality is , and should be, tied to the determination of BTA requirements for entrainment. Further discussion of this al ignment of compliance de adlines is provided*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 356 of 642 in Section CA . Today’s final rule provides for se veral methods of compliance with the BTA for impingement mortality. This sec tion discusses each of the methods for compliance, how they follow from the perm it application requirements at § 122.21 (r), and any minimum monitoring and reporting re quirements associated with each method. 1. Closed-cycle recirculating system In this method of compliance, an existi ng facility must opera te a closed-cycle recirculating system as defined at § 125.92 .(c). The facility would indicate the choice to use this compliance method under § 122.21(r)(6) in its permit application. As specified in § 122.21(r)(1), the facility would not need to submit (r)( 7) or (r)( 9) through (13 ).), if it exceeds 125 mgd AIF and these requireme nts are not waived by the Director. The information still required still at (r)(2) to ( 5) and ( 8) areis considerably less burdensome. The monitoring must be representative of normal operating conditions, and must include measuring cooling water withdr awals, make-up water, and blow downblowdown flows. The facility must monitor actual intake flow s at a minimum frequency of daily, or may monitor the representative cy cles of concentration at a minimum frequency of daily. These monitoring data would be used by the Director to determine that make-up and blowdown flows have been minimized. The owner or operator would submit these data with their existing DMR or equivalent state report. Facilities complying using closedcycle cooling are not subject to biologi cal compliance monitoring unless otherwise specified by the Direct or (see § 125.96(c)).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 357 of 642 2. Maximum through screen design velocity of 0.5 feetFeet per secondSecond Through-Screen Design Velocity In this method of compliance, the facili ty must operate a cooling water intake structure that has a maximum design through- screen intake velocity of 0.5 feet per second. The facility must submit informa tion under § 122.21(r) to the Director that demonstrates that the maximum design inta ke velocity as water passes through the structural components of a screen measured perpendicular to the sc reen mesh could not exceed 0.5 feet per second. The maximum velocity limit must be achieved under all conditions, including during minimum ambient source water surface elevations (based on BPJ using hydrological data) and during pe riods of maximum head loss across the screens or other devices during normal operation of the intake structure. EPA notes a cylindrical wedge wire screen, in general, is designed for 0.5 feet per second. In Phase II, EPA pre-approved wedgewire screens under very specific operational conditions. Today’s fi nal rule simplifies the dem onstration requirements for a facility employing cylindrical wedgewire scr eens to that of demonstrating the maximum design through-screen ve locity is 0.5 feet per second. As another example, a facility may have pumping and piping constrictions that phys ically limit the design intake velocity to less than 0.5 feet per second. The Director ma y choose to establish permit conditions that address the physical limitations of the intake, such as requiring a pump be removed from service, or that only one of two (redundant) pumps may operate at any time. Facilities choosing to comply under this section do not have monitoring requirements under this section.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 358 of 642 3. 0.5 feetFeet per secondSecond Through-screen Actual Velocity This method of compliance is similar to the maximum through screen design velocity of 0.5 feet per second alternative discussed above, except that the intake’s maximum design velocity can exceed 0.5 fps, as long as the intake is operated such that the actual, measured velocity does not. As an example, a facility may have originally been constructed with a maximum design inta ke of 1.0 feet per second, but now, because it has retired generating capaci ty but not pumps, may only wi thdraw cooling water such that the actual intake velocity at the intake never ex ceeds 0.5 feet per second. This would constitute compliance with the impingement mortality standard. The maximum velocity must be achieved under all conditions, incl uding during minimum ambient source water surface elevations (based on BPJ using hydr ological data) and during periods of maximum head loss across the screens or ot her devices during normal operation of the intake structure. Monitoring the velocity at the screen f ace or immediately adjacent to the screen face must be conducted at a minimum frequency of daily. Monitoring of the approach velocity does not meet this requirement. Howe ver, in lieu of velocity monitoring at the screen face, the owner or operator may calcula te the through-screen velocity using intake water flow, water depth, and the screen open areasarea . EPA is requiring this point of measurement to ensure that fish are actually able to swim away (not into an embayment from which they cannot escape) from the loca tion within the intake structure at which they are most susceptib le to being impinged.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 359 of 642 Under today’s final rule, the Director ma y authorize the facility to exceed the low velocity standardcompliance alternative for brief periods for the purpose of maintaining the cooling water intake system, such as back washing the screen face. In this compliance option, facilities are no t subject to biological complia nce monitoring unless otherwise specified by the Direct or (see § 125.96(c)). 4. Existing Offshore Velocity Cap In this method of compliance, facilities will submit information under § 122.21(r) that they operate an offshore velocity cap that meets the definition at § 125.92 (v) and that was installed prior to the effective date of this rule. The definition of offshore velocity cap includes the requirement that the ve locity cap be located a minimum of 850800 feet offshore. The velocity cap must include device s to exclude marine animals, such as bar screens. The velocity cap must be designed to change the directi on of water withdraw from vertical to horizontal, thereby creati ng velocity patterns that can be sensed toand trigger an avoidance response by fish and othe r aquatic organisms. Intake flow must be monitored at a minimum frequency of daily. This information will help to confirm the intended velocity patterns are created. In th is compliance option, fac ilities are not subject to biological compliance monitoring unless otherwise specified by the Director (see § 125.96(c)). EPA notes that facilities choosing to c onstruct a velocity cap at an offshore location after the effective date of this rule willwould use compliance options § 125.94(c)(6) (Systems of Technologies as the Site-specific BTA for Impingement Mortality) or § 125.94(c)(7) (Impi ngement Mortality Performance LimitStandard ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 360 of 642 5. Modified Traveling Screens In this method of compliance, a facility must first operate a modified traveling screen that meets th e definition at § 125.92 .(s). The definition identifies and requires those features of a traveling water screen that provide for an appropriate level of fish protection: collection buckets (or equivalent) to minimize tu rbulence to aquatic life; guard rails or barriers to pr event loss of fish from the co llection system; screen panel materials such as smooth woven mesh, drilled mesh, molded mesh, or similar materials to protect fish from descaling; continuous or near-continuous rotation of screens and operation of collection equipment to recove r impinged fish as soon as practical; low pressure wash or vacuum to remove collected organisms from the screens; fish handling and return with sufficient water flow to retu rn fish directly to the source water in a manner that does not promote predation or th e re-impingement of the fish, or a large vertical drop. EPA intends for this defin ition to generally incl ude modified Ristroph

screens , (including Geiger screens, Beaudrey WIP screens, and Hydrolox screens), dual flow screens, and rotary screens. Modified traveling screens with a fish return and handling system is the technology basis for the impingement mortality standard, therefore the EPA fully expects biological monitoring of a properly designed, built, and operated modified traveling screen would alwaysconsistently be able to meet the impingement mortality performance standard. If EPA were to simply set a performance standard based on the numeric limitperformance levels achievable by modified traveli ng screens, a facility would have to conduct continual biological monitoring to demonstrate compliance. A far more*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 361 of 642 efficient way to demonstrate compliance would be for facilities to optimize the operation of their technologies for thei r site-specific conditions and identify the conditions that distinguish proper operation at their facility. The optimized operation of the technology would be largely demonstrated through the biological monitoringdata collection and studies required in the permit application at § 122.21(r)(4) and (6 )(i), including an impingement technology pe rformance optimization study . Biological monitoringdata collection should follow the monitoringsampling protocols described in section 7section7 below. The optimized operation documented by the impingement technology performance optimization study will result in more than just meeting the impingement mortality performance standard, but ratherand results in a facility achieving the best possible performance. 102 The biological monitoringdata collection and analysis in the impingement technology pe rformance optimization study will identify the operating conditions that result in optimized performan ce, such as fish sluicing spray pressures, rotation speed and frequency of the screens, a ngle of the fish sluicing sprays, fish return trough water flows, and fi sh return trough location. 103 The Director will then establish these operating conditions as permit conditi ons, along with an equipment inspection

102 As demonstrated by the numerous studies included in the record for today’s final rule, many facilities are able to achieve less than 10 percent impingement mortality, a performance level comparable to the impingement mortality of closed-cycle cooling. Merely requiring facilities to achieve a numerical limitperformance standard through modified traveling screens cr eates disincentives to perform better. 103 EPA also requires the entrapment of organisms, as we ll as organisms that are carried over the screens, to be counted as impingement mortality.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 362 of 642 condition to assure proper functioning of th e technology. As long as the permit conditions are met, the EPA does not expect any biol ogical compliance monito ring will be required, unless otherwise specified by the Director, for example, for the protect ion of shellfish or fragile species (see § 125.96(c)). Note that EPA does not intend for facilities to install closed-cycle cooling solely for the pu rpose of meeting the IM requirements. 6. Systems of Technologies as the Site-specific BTA for Impingement Mortality In this method of compliance, a faci lity must demonstrate a system of technologies is employed that will meet the impingement mortality standard. This option will allow a facility the flex ibility to choose the systems approach of technologies, management practices, and operational measur es it will use to demonstrate compliance, including but not limited to flow reductions, intake location, behavi oral deterrents, unit closures, seasonal operations, and newly inst alled velocity caps. Like the compliance option for modified traveli ng screens, the optimized ope ration of the system of technologies will be largely demonstrated through the biological monitoringdata collection and studies required in the permit a pplication at § 122.21 (r)(4) and (6)(ii). However, the analysis and studies for combin ing the performance of varied technologies is more involved. If the system of technol ogies includes cr edit for reductions in the rate of impingement by the system, the impingement technology perf ormance optimization study required at § 122.21(r)(6)(ii) will provide an estimate of those reductions including relevant supporting documentation. The esti mated reductions in rate of impingement must be based on a comparison of yourthe facility’s system to a once-through cooling*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 363 of 642 system with a traveling screen whose point of withdrawal from the surface water source is located at the shoreline of the source water bodywaterbody . EPA expects Phase II facilities will use information alre ady collected as part of their calculation baseline (69 FR 41594, July 9, 2004). In addition, the study must include two years of biological monitoringdata collection demonstrating the rate of impingement resulting from the system. For this demonstration, monitoringdata collection must be conducted no less frequently than monthly. The Direct or may establish more frequent monitoringdata collection or a longer period of study. If the system of technologies includ es credit for reductions in impingement mortality already obtained at the facility, th e study must include two years of monthly biological monitoringdata collection demonstrating the level of impingement mortality the optimized system achieves. Biological monitoringdata collection must be representative of the impingement and the impingement mortality at the intakes and should follow the monitoringsampling protocols described in section 7 below. The impingement technology perf ormance optimization study must provide a description of any sampling or monitoring approach used in measuring impingement mortality, including a taxonomic identification to the lo west taxon possible of all organisms to be monitoredsampled ; the method in which naturally mo ribund organisms are identified and taken into account; and the method in which mo rtality due to holding times is taken into account. In addition, the study must describe how the location of the cooling water intake structure in the water bodywaterbody and the water column are accounted for in the points of monitoringsampling locations . EPA requires the entrapment of organisms, as*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 364 of 642 well as organisms that are carried over th e screen, to be counted as impingement mortality. If the system of technologies specifi cally includes flow reduction to reduce impingement, the impingement technology performance optimization study must include two years of intake flows, measured dail y, as part of the demonstration, and must describe the extent to which flow reductions are seasonal or intermittent. The rule clarifies that credit for fl ow reductions must result from actual reductions in flow, therefore the AIF will be used as a point of comparison, and not the DIF. The study must document how the flow reduction results in reduced impingement, and how the reduction in impingement has reduced the site-specific impingement mortality. Today’s final rule at § 125.98(f)(3)(iii) further clarif ies that credit in reduced impingement or impingement mortality resulting from unit closures will be valid for a period of 10 years. 104 This is also reflected in permit application requirements fo r an owner or operator planning to retire the facility in the current permit term at 40 CFR 122.21 (r)(1)(ii)(F), or in the following permit cycle at 40 CFR 122.21 (r)(1)(ii)(G). The Director must determine the system of technologies, management practices, and operational measures that is the best technology availa ble for impingement reduction at the site. As the basis for the Director’s determination, the facility must demonstrate

104 Because a permit may be administratively continue d or may not be issued every 5 years, EPA has specified 10 years rather than two permit cycles to avoid facilities from taking credit for a unit closure that potentially occurred decades prior.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 365 of 642 that the system of technology has been optimi zed to minimize impingement mortality of all non-fragile species. In addition to the impingement technology performance optimization study , the Director may also use the bi ological source wate r characterization and/or the entrainment characterization studies in the permit application. EPA expects the Director’s decision will be informed by comparing the impingement mortality data under § 122.21(r)(6)(ii) to the impingement mortality limitperformance standard that would otherwise apply under § 125.94(c)(7). In addition, the impingement technology perf ormance optimization study requires documentation of the percent impingement mortality reflecting optimized operation of the total system of technologi es, operational measures, and best management practices and all supporting calculations. The followi ng example illustrates how these provisions will adjust for flow, location, and other technologies in demonstrating the IM performance for a system of technologies. The example uses values that simplify th e calculations to better illustrate the adjustments, and are not intende d to reflect values that EPA expects at any facility. To simplify the example further, the facility has only fish and does not have shellfish in its source waters. EPA has chosen a hypothetical fa cility that examined each change in a separate study. 105 The hypothetical facility intake is located at a submerged offshore

105 EPA recognizes that facilities often examine the comb ined effect of two or more technologies (e.g., deterrents and offshore location) within a single study. In applying these provisions, the facility could use the outcomes associated with the combined performance of multiple technologies, but this would result in permit conditions that would also be combined.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 366 of 642 location, has an acoustical deterrent, and inst alled variable speed drives. For the purposes of this example, the facility has completed sampling at the forebay for two years as part of § 122.21(r)(4) and (6). During the most r ecent 12 months, the counts of non-fragile species totals 40,000 impinged fish. During the 24-hour holding period following each monthly sample collection, the total fish that died were counted, for a total of 12,000 dead fish for the preceding 12 months. Th e facility then calculated the average annual IM for the preceding 12 months at 30 percent as follows: % IM = (impinged fish that are killed) x 100 (total number of impinged fish) = (12,000) / (40,000) x100 = 30 % To adjust the observed percent IM for a submerged offshore location and acoustical deterrent, the facility first extrac ts information from its previously conducted studies related to performance and calculation baseline. Alternatively, the facility could conduct a performance study during the same tw o year period in which it conducts its biological monitoringdata collection as part of the permit app lication requirements at § 122.21(r). For the submerged offshore location ad justment, fish density and flow data show the offshore location reduces the rate of impingement for all species by 4,000 fish annually. For the acoustical deterrent, performa nce data show a reduction in the rate of impingement of fish by 11,000 organisms annuall y. For purposes of this example, assume none of the 15,000 fish are assumed to contribute to further mortality; in other words, all of the fish that avoided impingement in the first place survive. Therefore, the facility has reduced impingement by 15,000 fish ( i.e. , sum of both submerged offshore location and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 367 of 642 acoustical deterrent). The facility then ta kes credit for this reduction by adding the forgone impingement to the denominator of the percent IM calculations as follows: % IM = (impinged fish that are killed) x 100 (total number of impinged fish) = (12,000) / (40,000+15,000) x100 = 22 % In summary, calculating percent IM at the forebay yields a 30 percent IM, and then applying the performance for existing t echnologies shows the effective percent IM is actually 22 percent. Next, to adjust for the variable speed drives, the facility has determined from flow monitori ng that the volume of cooling water flow has been reduced by 11 percent. In this example, assume the flow reduction does not vary considerably each month. The volume of reduced flow multiplied by the density of fish near the intake is calculated each month for 12 months, and th e facility projects that the reduced flow excludes an additional 8,000 fish from impinge ment each year. Then the facility would apply the reduction in annual counts of impinged fish to the denominator, as follows: % IM = (impinged fish that are killed) x 100 (total number of impinged fish) = (12,000) / (40,000+15,000+8,000) x100 = 19% Thus , the facility’s site-specific system of technologies including optimized operation of acoustical deterrents has a tota l system performance of 19 percent annual impingement mortality. This example is intende d to illustrate how facilities would obtain credit for existing technologies in a syst ems approach. While this example includes acoustical deterrents, it does not imply that acoustical deterrents are an appropriate*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 368 of 642 technology for all facilities. EPA expect s a facility will use the required two yearsyears’ worth of monthly biological monitoringdata collection and studies to conduct a similar analysis for each month. The minimum required monitoringdata collection and studies will result in annual average performance ca lculations for 12 consecutive months. The facility will use this information as part of its demonstration to the Director. If the Director determines the system of technologies, management practices, and operational measures is the best technology available for impingement reduction at the site, the Director will establ ish specific operating conditions as permit conditions, along with appropriate equipment inspection condi tions to assure proper functioning of each technology. For example, a system with acous tical deterrents would likely have permit conditions related to frequency of tones, vol ume, location, and fre quency of operation of the acoustical deterrents. The Director will also establish monitoring requirements for intake flow and velocity where such measures are an important part of the system of technologies, such as the case of variable speed drives. For example, a system that includes seasonal flow reductions would likely have permit conditions for flow monitoring. As long as the permit conditions are met, the EPA does not expect any biological compliance monitoring will be re quired, unless otherwise specified by the Director (see § 125.96(c)). 7. Impingement Mortality Performance Standard In this method of compliance, facilities are required to monitor to demonstrate compliance with the impingement mortality performance limitstandard at § 125.94(c)(7) by demonstrating an annuala 12-month average mortality of 2524 percent or less. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 369 of 642 facility is required to monitor at a mini mum frequency of mont hly, unless a greater frequency is specified by the Director. Fo r each monitoring event, the facility would determine the number of non-fragile organisms that are collected or retained on sieve with a maximum spacing of 0.56 inches ( i.e ., that are impinged [I]), and the number that die during after impingement ( i.e. , impingement mortality [IM]). The facility must establish a post-impingement holding period of 18 to 96 hours otherw ise specified by the Director. Under the definition at § 125.92 ,(b), all life stages of fish and shellfish excludes specified nuisance species from the totals for both impingement and impingement mortality. Also , as defined at § 125.92( bq ), latent mortality means the delayed mortality of organisms that were initially alive upon being impinged or entrained but that do not survive the delayed effects of impingement and entrainment during an extended holding period. Delayed effects of impingement and entrainment may be due to stresses that include but are not limited to temperature change, physical stresses, and chemical stresses. The manner in which latent mortal ity is counted must be identified in the Entrainment Characterization Study at § 122.21(r)(9), and must also be counted in the Impingement mortalit y performance standard at § 125.94(c)(7). Fish that are included in any carryover from a traveling screen or remove d from a screen as part of debris removal must be counted as impingement mortality. Fi sh that are entrapped by the cooling water intake system must be counted as impingement mortality. The annual12-month average of impingement mortality is calculated as the sum of total impingement mortality over 12 months divided by the sum of the total impingement mortality over the same 12 months, as shown by the following equation:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 370 of 642 %	ܯܫ ൌ ൬ ܯܫ ܫ ൰ ൈ 	100 Note that this equation would be applicab le to calculating the annual average for the previous 12 months. Alt hough facilities will be conduc ting biological monitoring monthly (or more frequently) and reporting that data in their discharge monitoring reports, facilities are not required to meet a monthly impingement mortality limit.performance standard. Therefore, in this equation, IM is the sum of all impingement mortality over the course of the previous 12 months, and I is the sum of all impinged fish for the previous 12 months. If the facili ty’s calculated annual average percentage impingement mortality is less than the annual12-month average limitationperformance standard , it will be deemed to be in compliance with the annual12-month average limitationperformance standard

. In establishing the monitoring requirements, EPA expects any approved monitoring protocols will consid er the entire daily and (whe re appropriate) tidal cycles over which data collection should occur. Typi cally, facilities have collected impingement samples continuously for 6 or 8 hours and repeat ed this cycle to cover an entire 24-hour period. Stratifying collection in this manner a llows an analysis of the diel variation exhibited by many aquatic organisms, whic h may be important. EPA also expects the approved monitoring protocols will ensure that sampling occurs during periods of representative intake flow and not during pe riods of non-peak flow or scheduled outages. The ideal point to measure impingeme nt mortality is the location where organisms are returned to the water bodywaterbody . However, for ease of sampling and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 371 of 642 access, EPA envisions that most facilities wi ll collect samples from the fish return system(s) at some point before the fish return discharge point. According to the studies in EPA’s database, EPA envisions that facilities will either (1) dive rt some or all of the flow from the fish return into a fish collection a nd holding area, or (2) place a net or basket fitted with 3/8-inch mesh spacing in the fish return and collect and transfer the retained organisms to a holding tank. While nearly all st udies in the record report the use of 3/8- inch mesh spacing, as discussed below, the fi nal rule allows the us e of other sieve and mesh spacings with a 0.56 inch maximum opening. A facility will handle the organisms in the collection device as little as possible and transfer them to a holding area with conditions as close as practicable to the sour ce water. The facility will count the number of organisms in the holding area and s ubsequently hold the sample using proper technique 106 to maintain the health of the collected organisms. 107 At a period of 18 to 96 hours after the initial collection, the facility will count the nu mber of dead organisms and determine the percentage of or ganisms that died in comparison to the total number of organisms measured initially. Any organism s not collected by the fish handling and return system, such as entrapped organisms, organisms in the carryover of a traveling

screen , or organisms collected by a high-pressure wash and sent to debris bins, will be

106 EPA recognizes that at present, there are no standard methods for conducting impingement and entrainment studies and that there can be variability in designing a sampling plan between sites. However, some elements should be incorporated into any sampling plan, as outlined in DCN 10-6708. 107 Facilities that divert the flow directly would similarly pass the flow through a net or debris basket fitted with 3/8-inch mesh spacing or would count only organisms that would have been collected with such a basket or net.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 372 of 642 counted as 100 percent impingement mortalit y. The facility will keep records of this information and compare its result to the impingement mortality performance standard at § 125.94(c)(7). As explained in Section VI, the impingeme nt mortality restrictions in the final rule are based on the operation of a modified tr aveling screen with a fish return. Because EPA wants to ensure that a facility’s monito ring plan is consistent with the technical basis for today’s requirements, EPA is re quiring facilities to monitor impingement mortality using a sample that has been passe d through a sieve or net with no more than 0.56 inches maximum opening, so that only or ganisms that do not pass through this mesh size are counted. 108 In doing so, facilities would retain (and therefore count) only organisms that would have been impinge d on a 3/8” mesh screen, which was the technological basis used for deve loping the impingement mortality limitperformance standard

. 109 Facilities could similarly apply a “hypothetical net” in that they could elect to count only organisms that woul d not have passed through a ne t with mesh openings less than 0.56 inches. For example, a facility that uses a fine-mesh screen of 0.5 mm or diverts

108 For a discussion of how EPA has changed its view of screen mesh size, see sectionSection III of the proposed rule (76 FR 22188, April 20, 2011). EPA recognizes that smaller organisms that previously would have passed through a screen and been entrained might be “converted” by a fine mesh screen to an impinged organism; because organisms si ze would affect the rate of mort ality, EPA has chosen not to rely on definitions of impingement and entrainment based on a physical process, but instead to define impingement mortality and entrainment mortality based on organisms sizes. 109 EPA’s analysis of impingement survival rates is ba sed on data from facilities with 3/8” mesh screens; these limitsthe performance standard may be applied differently at facilities with smaller mesh size. Therefore, these limitsstandards do not provide a disincentive to facilities from using finer-meshed screens (i.e., screens with a mesh opening smaller than 3/8 inch) on their traveling screens. As long as the organisms that are large enough to have been impinged on a coarse mesh screen achieve the required survival rates, the facility will be considered to meet the impingement mortality requirements.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 373 of 642 the flow directly to a sampling bay will need to count only organisms that remain if the flow passed through a net, screen, or debris basket fitted with 3/8-inch mesh spacing. EPA further expects the impingement mortality re strictions could be applied to other fish protection technologies and provi des a compliance route for futu re technologies that are better performing. In today’s rule, EPA is including provis ions for reduced biological monitoring. EPA determined that monthly monitoring at a mi nimum is appropriate for at least the first full permit term. In permit terms subsequent to the first permit issued under today’s rule, the owner or operator may request the Dir ector to reduce monitoring requirements under § 125.95(c). EPA expects the Director woul d reduce monitoring requirements as appropriate ., if the facility demonstrates that its operational and biological conditions have remained the same. Given that the source water bodywaterbody may change over time (including hosting different or increased numbers of individuals or species), the biological characterization re quired at § 122.21(r)(4) including two years of data serves to alert interested parties as to the status of the water bodywaterbody and any changes in the biology of the water bodywaterbody . Under the compliance option (7) impingement mortality performance standard, EPA expects that as new technologies are successfully demonstrated, in subsequent pe rmits facilities would request less frequent monitoring, or be able to incorporate su ch technologies in a perm it application choosing a § 125.94(c)(6), system of technologies, demonstr ation. Once the Director has determined the technology is fully de monstrated for that site , the facility would therefore reduce their biological monitoringdata collection to the minimum required by the permit application*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 374 of 642 at § 122.21(r) and any monitoring the Director de termines to be appropriate for verifying permit operating conditions. 88. Additional Measures Sections § 125.94(c)(8) and (9) provide the Director discretion to require additional measures to protect shellfish and fragile species . An example of shellfish protection measures is a barrier net, includi ng seasonal deployment of such nets. An example of additional protection measures for fragile species is an acoustical deterrent system. 9 . Summary The following Exhibit VIII-4 summarizes the monitoring requirements for impingement mortality by compliance appro ach alternative. The Director has the discretion to require additi onal monitoring under § 125.96(c) a nd (d). Since all permits must have requirements for visual inspectio ns, these are not incl uded in the exhibit.
Exhibit VIII-4. Summary of monitoring requirements for impingement mortality

Compliance approach Type of monitoring Frequency Closed-cycle recirculating system Intake, makeup and blowdown flows (or cycles of concentration) Daily
Velocity (DIF) None None
Velocity (AIF) Velocity (measured or calculated from flow) Daily

Velocity cap Intake flow Daily

Modified traveling

screens TBD a TBD a

Systems of Technologies TBD b TBD b*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 375 of 642 Impingement mortality performance standard Biological monitoring Monthly

a Monitoring requirements may vary, depending on the permit-specific operating conditions. b The monitoring requirements are based on the technologies empl oyed. For example, seasonal flow reduction would require flow monitoring.
G. What Monitoring is Required for Entrainment? In establishingWhere the Director establishes entrainment controls, the Director is required to establish monitoring requirements . The final rule requires that the permit application studies at § 122.21(r) be submitted fo r each permit renewal. For facilities that withdraw 125 mgd AIF, EPA exp ects that the Director will use these studies, including the Source Water Baseline Bi ological Characterization Data at § 122.21(r)(4) and the Entrainment Characterization Study at § 122.21(r)(9), as a basis for any monitoring requirements for entrainment. To facilitate the determination of entrainment requirements for facilities below 125 mgd AIF, a Director ma y require the owner or operator to submit some or all of the study requirements at § 122.21 (r)(9) through (13) or variations thereof. The Director may require additional monito ring necessary to demonstrate compliance with § 125.94(d), additional measures to protect Federally-listed endangered and threatened species and designated critic al habitat requirements under § 125.94(g), interim standards under § 125.94 (g(h ), and any more stringe nt standards under § 125.94( fi ). Under § 125.96(d), existing facilities with new units are required to conduct compliance monitoring to demonstrate flow re ductions consistent with the requirements of § 125.94(e)(1), or equivalent impingement and entrainment reductions. The Director may establish flow monitoring or monitoring of cycles of concentra tion as discussed in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 376 of 642 Section F. Such flowsmeasures will be used to document th at the facility has minimized make-up and blowdown flows. For facilities required to demonstrate flow re ductions consistent with the requirements ofcomplying under § 125.94(e)(2), the fr equency of monitoring mustwill be dailydetermined by the Director and be representative of that day’s maximum operating conditions. will vary depending on the fac ility’s chosen method of compliance. To meet requirements under § 125.94(e)(2 ), facilities must measure AIF to establish a site-specific base line without any new technol ogies or employing additional operational measures. The facility must also measure the density of entrainable organisms (E D ) at a proximity to the intake that is re presentative of the entrainable organisms present without the cooling water intake structure. Samples will be collected over a 24- hour period to monitor each species as re quired by the Director. Samples will be collected no less than biweek ly during the primary period of reproduction, larval recruitment, and peak ab undance identified during the source water baseline characterizationSource Water Baseline Biological Characterization Data required under § 122.21(r)(4). Samples will be representative of the cooling water intake when the structure is in operation. In addition, sufficient samples must be collected to allow for calculation of annual12-month average entrainment levels. The sampling will measure the total count of entrainable organisms or density of organisms, unless the Director approves of a different metric for such meas urements. If the abundance varies seasonally, the Director may require several measuremen ts of entrainment through the year, from which an annuala 12-month average can be calculated.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 377 of 642 For the purpose of today’s rule, entrainable is defined as any organism that passes through a sieve with a maximum opening of 0.56 inches. As discussed in Section VI, this would avoid any confusion as to which orga nisms are subject to which standards (i.e., requirements for IM or requirements for E). Th e regulation specifies that the sieve used for calculating impingement must be the same sieve used for calculating entrainment, so all organisms are counted.accounted for. Facilities can also monitor the latent entrainment mortality in front of the inta ke structure. Entrainable organisms passing through the cooling water intake structure ar e to be counted as 100 percent entrainment mortality unless the facility demonstrates to the approval of the Director that the mortality for each species of concern is less than 100 percent. In addition, facilities must monitor the AIF for each intake. The AIF must be measured at the same time as the samples of entrainable organisms are collected. The following equation illustrates how to calculate a baseline level of entrainment ( E B ):
E B = E D × AIF Performance commensurate with a closed-cycle coolingrecirculating system ( E BTA E CCRS ) can therefore be de termined by reducing E B by the percentage of flow reduced through the use of a closed-cycle cooling system. For example, a facility withdrawing make-up water from a freshwater source (as described above, would achieve a reduction of 97.5 percent) will calc ulate its performance as follows:
E

BTA E CCRS = ( E B ) × (100 – 97.5) ÷ 100*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 378 of 642 The resulting value, E BTA E CCRS , is the required level of entrainment performance (as measured by entrainment mortality). The fa cility could implement any combination of flow reduction, technologies, and operational measures to meet the required level of entrainment performance. For example, a facility withdraws 200 mgd AIF from a freshwater river. The annual average entrainm ent density in the proximity of the intake structure is 6,400 organisms per 100 cubic meters withdrawn.
E

B = E D × AIF 6,400 organisms/100m 3 × (100m 3 / 26,417 gallons) × 200,000,000 gallons per day
= 48 × 10 6 organisms per day The maximum entrainment mortality for a closed-cycle cooling system is thus
E

BTA E CCRS = ( E B ) × (100 – 97.5) ÷ 100 = (48 × 10 6 organisms per day) × (100 – 97.5) ÷ 100
= 1.2 × 10 6 organisms per day. The minimum required level of performance for demonstrating entrainment mortality at a comparable level ( E C ) to a closed-cycle cooling system is the level corresponding to 90 percent 110 of the reduction that a facility with a closed-cycle cooling system could achieve:
E C = ( E B ) × (100 – (97.5 × .9)) ÷ 100

110 The 90 percent metric is required in Phase I, and adopted here because new units are subject to requirements similar to the Phase I requirements. Ph ase I, at 40 CFR 125.86 specifies, “reduced both impingement mortality and entrainment of all life stages of fish and shellfish to 90 percent or greater of the reduction that would be achieved through § 125.84(b)(1) and (2).”*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 379 of 642 = (48 × 10 6 organisms per day) × (100 – (97.5 x .9)) ÷ 100 = 5. 988 × 10 6 organisms per day. The Director may require additional monitoring necessary to demonstrate compliance with § 125.94(d), endangered species requirements under § 125.94(g), interim standards under § 125.94 ( gh ), and any more stringent standards under § 125.94( hi ). In addition, all facili ties will either conduct visual inspections or employ remote monitoring devices when the c ooling water intake structure is in operation. The facility will conduct such inspections at least weekly to ensure that any technologies installed to comply with § 125.94 are maintained and operated to ensure that they will continue to function as designed. EPA is aware that for some facilities, this requ irement could pose a feasibility challenge (for exampl e due to ice cover in the wint er season, inability of divers to see through more than a few inches of wa ter, or certain intakes in deep water). The rule, therefore, authorizes the Director to establish alternat ive procedures. See § 125.96(e). H. What Reports Am I Be Required To Submit? 1. Status Reports If the Director establishes a compliance schedule, the Director will also establish any status reporting requirements. These reports may include updates on biological monitoring, technology testing results, construc tion schedules, or othe r appropriate topics and serve as milestones for the facility and th e Director to evaluate the progress of the facility in meeting BTA. S ee §§ 125.94(b) and (d) and 125.97(b).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 380 of 642 2. Monitoring Reports The required reports for mon itoring activities are similar to requirements that are already in NPDES permits for effluent disc harges. EPA expects such reports to be included with the Discharge Monitoring Reports (DMRs) or equivalent state reports. Facilities would report any monitoring, demonstration, and other information required by the permit sufficient to determine complian ce with the permit requirements established under § 125.94, as well as any other monitoring requirements specified in the permit. See 40 CFR 125. 7997 (a). Entrainment requirements will be determined on a site-specific basis by the Director. For facilities that are required to install entrainment controls, EPA expects that these facilities would ge nerally conduct ongoing flow (or other) monitoring as verification that entrainmen t has been reduced. See § 125.96( db) and (c ). However, the Director may require facilities to repo rt entrainment monitoring and analysis , including :

 The compliance measurement location.

 A description of the flow monitoring procedure.

 Documentation of flow reductions.

 Any other monitoring requirements specified in the permit. The report must include any monitoring and an alysis required as part of additional measures for threatened and endangered species, shellfish, and/ or fragile species as established by the Director. Further, your report will include documentation of cooling water that is process water, gray water, wa ste water, reclaimed water, or other water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 381 of 642 reused as cooling water in lieu of water obtai ned by an intake. The Director will evaluate these reports for compliance with permit requirements as appropriate. 3. Annual Certifications Today’s rule requires a facil ity to submit an annual certification statement signed by the responsible corporate officer. See § 125.97(c). In most cases, the statement would indicate the information from the previous st atement is still pertinent. If modifications were made to the facility that impacts c ooling water withdrawals or operation of the cooling water intake structures, the statemen t would indicate such, and the facility would submit revisions to the information require d in their permit application at § 122.21(r). 4. Other Reporting In addition, EPA notes that suppl emental reporting may be required under the
ESA as part of any incident al take statement or permit (50 CFR 402.14(i)) or a Sectionsection 10 permit (50 CFR 222.307) that is i ssued by the United States Fish and Wildlife Service or the National Marine Fisher ies Service to ensure compliance with the Endangered Species Act.
I. What Records WouldWill I Be Required to Keep? As described at § 125.97(d), facilities are required to keep all permit applications, status, monitoring, and annual reports and rela ted supporting information and materials at least until the subsequent permit is issued. Facilities might wish to keep records for a longer period to maintain a complete regulat ory history of the f acility. For example, existing source water biological studies submitted with a facility’s permit application could contain data that has been collected in the past 10 or mo re years. When the Director*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 382 of 642 has approved a request for reduced informati on collection in the pe rmit application, the rule requires that records of submissions that are part of a previous permit application be kept until the subsequent permit is issue d. See § 125.95(e). Records supporting the BTA determination for entrainment must be kept until such time as the Director revises the determination. The Director may establish ad ditional record-keeping requirements in the permit, such as additional records documenting complian ce monitoring, data collection, or more frequent reports. Facilities must also keep records of all data used to complete the permit application and show compliance with th e requirements of § 125.94, any supplemental information developed under § 125.95, and a ny compliance monitoring data submitted under § 125.96. The Director may require that th ese records be kept for a longer period. J. What Are the Respective Federal, State, and Tribal Roles? Today’s final rule affects authorized State and Tribal NPDES permit programs. Under 40 CFR 123.62(e), any existing approved section 402 permitting program must be revised to be consistent with new program re quirements within one year from the date of this promulgation, unless the NPDES-authori zed State or Tribe must amend or enact a statute to make the required revisions. If a Stat e or Tribe must amend or enact a statute to conform to today’s final rule, the revision must be made within two years of this promulgation. States and Tribes seeking new EPA authorization to implement the NPDES program must comply with the requi rements when authorization is approved. This final regulation does not alter Stat e authority under sec tion 510 of the CWA.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 383 of 642 In addition to updating their programs to be consistent with today’s final rule, States and Tribes authorized to impl ement the NPDES program are required under NPDES State program requirements to implem ent the cooling water intake structure requirements of subpart J following promulga tion of the final regulations. The permit requirements in this final rule must be impl emented upon the first issu ance or reissuance of permits following promulgation. Duties of an authorized State or Tribe under this regulation are described throughout this secti on and include reviewing permit application materials, determining appr opriate requirements, review ing monitoring and reporting data, and assessing whether a facility is comp lying with the final rule’s requirements. EPA recognizes that some States have inve sted considerable effort in developing and implementing section 316(b) permits. This final regulation at § 125.98(b) and (g) allows the Director flexibility where ther e are ongoing permit proceedings or where a BTA determination has already been made ba sed on substantially the same information required at § 122.21(r). EPA will implement these requirements where States or Tribes are not authorized to implement the NPDES program.
K. Permits for Protection of Endang ered and Threatened Species and Designated Critical Habitat
1. Existing Facilities Are Subject to Requirements under section 9 of the Endangered Species Act The ESA imposes duties not just on Federa l agencies but also on other entities. Section 9 of the ESA specifically provides that it is unlawful for any person to “take” any*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 384 of 642 endangered species of fish or wildlife excep t under defined circumstances. The Services (National Marine Fisheries Service or U.S. Fish and Wildlife Service) may provide an exemption to the prohibition on take in one of two ways. Take may be permitted under section 10 of the ESA (16 U.S.C. § 1539) or the Services may provide an exemption for take that is incidental to ot herwise legal activity through a stat ement that is included with the Services’ biological opi nion developed during Federa l agency consultation. (16 U.S.C. 1536(o)) The incidental take stat ement specifies the terms and conditions necessary to implement reasonable and prude nt measures which minimize incidental take. Nothing in today’s rule changes the existing, independent obligations of the facilities subject to this rule under section 9 of the ESA. Unless exempted by an incidental take statement or section 10 perm it, facilities have been prohibited from taking (for example, harming or killing) endangered speci es of fish or wildlife. In order to obtain a section 10 permit, the facility would be required to develo p a Habitat Conservation Plan (HCP), which is a mandatory component of an incidental take permit application. The HCP must specify the anticipated effects of the proposed taking, how those impacts will be minimized or mitigated, the alternative actions to the taking that the applicant considered, the reasons for not utilizing t hose alternatives, and other necessary or appropriate measures that the Secretary may require.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 385 of 642 2. EPA’s NPDES permitting regulations at 40 CFR 122.49 lists Consultation Under Section 7 of the ESA Under section 7 of the Endangered Species Act , each Federal agency must insure that any action authorized, funded, or carri ed out by the agency “is not likely to jeopardize the continued existe nce of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species which is determined by the Secretary, afte r consultation as appropriate w ith affected States, to be critical. . . .” 16 U.S.C. (ESA), 16 U.S.C. 1531 et seq, as one of the other 1535(a)(2). In the case of any Federal agency action subject to the ESA that may affect listed species or critical habitat, the Federal agency must consult with the concerned offices with responsibilities under the ESA, specifical ly NMFS and/or FWS. 50 CFR 402.14(a). In July 2012, EPA began informal consultation with the NMFS about the proposed section 316(b) regulations. In Oc tober 2012, EPA began informal consultation with the FWS. EPA prepared a draft biological evaluation of the effects of this rule on threatened and endangered species and in it concluded that the rule was not likely to adversely affect listed species or designated cr itical habitat. EPA was unable to obtain the Services’ concurrence on EPA’ s “not likely to adversely a ffect” finding. In June 2013, EPA requested formal consultation with th e Services under the Endangered Species Act and with that request submitted a final biological evaluation to the Services. EPA completed consultations with the Services and has included the Services’ biological opinion and associated documents in th e record for this rulemaking.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 386 of 642 Among the organisms potentially subject to impingement and entrainment at cooling water intake structures are those that are listed as threatened and endangered. In addition to impinging or entr aining threatened and endange red species, operation of CWISs may also adversely affect their critical habitat. Toda y’s rule includes a number of provisions specifically designe d to address incidental ta ke of all federally-listed threatened and endangered species and to insure that the rule is not likely to jeopardize the continued existence of lis ted species or result in the destruction or adverse modification of critical habitat. Thes e provisions are described below. The regulatory model adopted by EPA in the Phase I rule and later in the subsequently-withdrawn Phase II rule for large existing power producing facilities provided a structure to address and mini mize adverse impacts to threatened and endangered species. EPA’s approach required that facilities subject to the 316(b) rules, at the permit application stage of the permitti ng process must, among other things, identify threatened and endangered species that might be subject to impingement and entrainment in order to ensure that the permitting author ity would have the requisite information on which to make a decision about the need for controls to protect threatened and endangered species. See 40 C.F.R. § 122.21(r)(4). The Phase I and Phase II regulations specifically authorized the permit writer (referred to as the “Director” in EPA’ s permitting regulations) to adopt measures designed to protect threatened and endangered species. Thus, for example, EPA’s Phase I regulations for cooling water intake structures at new fac ilities require th at, under one of the compliance options, an owner or operato r must select and implement impingement*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 387 of 642 and entrainment minimization measures “if there are threatened or endangered or otherwise protected Federal, State or Tribal species.” Moreover, the permit writer may require additional impingement and entrainm ent reduction measures if the permit writer determines that the facility after meeting th e required performance standard would “still contribute unacceptable stress to the protected sp ecies, critical habitat of those species or species of concern.” 40 C.F.R. 125.84(b)(4) & (5). The Phase II regulation continued the ge neral approach followed in the Phase I regulation for protection of threatened and e ndangered species. Permit applicants needed to submit the same information on threatened and endangered species required in the Phase I rule. In addition, bu ilding on the earlier information requirements, the regulation also would have required fac ilities selecting and implementing certain of the alternative BTA compliance measures to submit a Comprehensive Demonstration Study that, among other things, characterized impingement and entr ainment at the facility. Further, the rule would have required a facility to submit an Impingement Mortality and/or Entrainment Characterization Study that included taxonomic identification, characterization and documentation of current impingement mortality and entrainment of all life stages of fish, shellfish and any species pr otected under Federal, Stat e or Tribal law (including threatened or endangered species). 69 FR 41687-88, July 9, 2004. In addition, the Phase I and II rules included a require ment for the facility to include in their permit application documentation of any public participation or co nsultation with Federal or State agencies on impacts of their cooling water intake stru cture on threatened and endangered species. The regulation then would have required the permit writer to determine appropriate*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 388 of 642 permit requirements and conditions. EPA noted that its existing NPDES permitting regulations reference a number of Federal laws that might apply to theFederally-issued NPDES permits, including the Endangered Sp ecies Act. 69 FR 41643-44, July 9, 2004. Threatened and endangered species were important considerations in the proposal to today’s rule and were of particular concern to the EPA. The preamble to the proposal reflects at a number of points that, in looking at the bene fits of different regulatory options, EPA attempted to assess the benefits to threatened and endangered species. See 76 FR 22174, 22197, 22207. The proposal also noted the importance of obtaining information for the permit writer about pot ential entrainment reductions. Thus, the proposal would have required certain facili ties to develop and submit with their permit application detailed informati on on their operations as well as an engineering study of the technical feasibility and incremental costs of candidate entrainment mortality control technologies and a detailed discussion of th e magnitude of non-wate r quality benefits. EPA proposed that some facilities would need to submit an Entrainment Characterization Study that included an entrainment mortality data collection plan that would indicate, at a minimum, taxonomic identification, latent mo rtality identification, documentation of all methods, and quality assurance/quality control procedures or sampling and data analysis appropriate for a quantitative survey. Under th e proposal, EPA would also have required peer review of the entrainment mortality da ta collection plan. Peer reviewers would be selected in consultation with the Director w ho may consult with EPA and Federal, State, and Tribal fish and wildlife management agen cies with responsibility for fish and wildlife potentially affected by the c ooling water intake structure( s). Further, facilities with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 389 of 642 greater than 125 mgd AIF would complete an entrainment study. The entrainment study could include information already collected to meet the Phase II requirements at § 122.21(r)(2)-(r)(4) before those requirements were suspended. EPA and the Services have completed consultations on the rule. EPA has received the final biological opinion and associated documents from the U.S. Fish and Wildlife Service and the U.S. National Marine Fisher ies Service and has included them in the record for the rule. The Services have concl uded that the rule is not likely to jeopardize the continued existence of lis ted species or result in the destruction or adverse modification of designated critical habitat. 3. Final Rule Provisions Related to Threatened and Endangered Species As noted previously, establishing standard s for cooling water intake structures to minimize impingement and entrainment of all aquatic organisms will promote and enhance protection of T&E species. In additi on, the rule contains a number of provisions that specifically concern T&E species; these pr ovisions were develope d in light of EPA’s consultation with the Services and were establis hed by EPA to insure that this rule is not likely to jeopardize listed speci es or result in the destruc tion or adverse modification of designated critical habitat. To be clear, the ES A provisions of the rule extend to all listed T&E species, not just fish and shellfish. The treatment of T&E species in today’s rule follows directly from the Agency’s longstanding approach as well as from EP A’s proposed 2011 rule which indicated the EPA’s intention to address pr otection of T&E species. Th e rule adopts the identical approach followed in the Phase I and II rule s, while adding some refinements to that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 390 of 642 earlier model which EPA discussed in the pr oposed rule. First, it adopts the proposed requirements that insure an adequate informa tion base is submitted to the permit writer. As was the case with the Phase I and withdr awn Phase II rule, appris ing the permit writer of the presence and extent of T&E species at a facility’s intake continues to be an important element of the permit application requirements for existing facilities. While retaining the existing permit application re quirement of 40 C.F.R. § 122.21(r), EPA has included in today’s rule a pr ovision at § 125.95(f) that require s a facility in its permit application to identify all Federally-list ed threatened and endangered species and designated critical habitat that are or may be present in the action area. The action area can generally be considered the area in the vici nity of the cooling water intake structure. The evaluation is to be based on information readily available to the facility at the time of the permit application. In addition, the rule requires the largest wit hdrawing facilities to provide taxonomic identification of species in the vicinity of the intake, thus providing a mechanism for facilities to de termine more accurately their potential impact on protected species. The rule requires that the Director transmit all permit applications to the Services upon receipt. The rule provides the Servic es with 60 days to review the permit application. This 60 day review takes place pr ior to the public notice of the State or Tribe’s draft or proposed permit. EPA expects that the Services w ill respond within 60 days and provide to the Dir ector (1) any corrections to the list of Federally-listed threatened and endangered species and critical habitat included in the permit application, (2) any measures that the Services reco mmend (including monitori ng and reporting) for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 391 of 642 the protection of listed species, includi ng any measures that would minimize any incidental take of listed sp ecies, and/or avoid likely jeopa rdy to a listed species or destruction or adverse modifica tion of critical habitat, and/or (3) notify the State or Tribe that the Service(s) have no corrections to the list of species and critical habitat and/or that the Service(s) do not recommend any contro l measures. The Servi ces’ 60 day review period does not constrain the Director’s ab ility to process the applicant’s permit application; however, the Dire ctor may not propose/publish the draft permit until the 60 day review period has ended, unless the Dire ctor has received the Services’ response prior to that time. In addition, the Services will receive, pursu ant to existing regulations at 40 C.F.R. 124.10(c)(1)(iii) and (e), all perm it applications, as well as fact sheets or statements of basis (for EPA-issued permits), draft permits , and public notices for all permits. At this stage of the process, the Services will have the opportunity to revi ew the draft permit and other materials and provide any additional input or suggested control measures to address effects to listed species or critical habita t. Together, the existing and new requirements related to transmittal of permitting document s to the Services will ensure that the Services have the opportunity to provide in formation and recommendations to the permit writer relating to any facility that may affect listed species. This in formation will be part of the public record for the permitting decision and the Director would be required to consider it as a relevant factor , along with all of the other relevant factors, in deciding what conditions to establish in the permit. Further, as explained in the MOA between EPA and the Services discussed elsewhere in today’s notice, EPA will use the full extent*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 392 of 642 of its CWA authority to object to a permit where EPA finds that issuance of NPDES permits under the NPDES rules. Nothing in this final rule would au thorize the permit is likely to jeopardize the continued existence of a listed species or re sult in the destruction or adverse modification of desi gnated critical habitat. The rule’s requirements insure a full vetting of information and concerns in the permitting process that must be considered by the Director. These requirements, coupled wi th the EPA’s commitment to exercise its oversight authority, insure that today’s rule is not likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of designated critical habitat. Among the recommendations that may be ma de by the Services to the facility and the Director are measures to minimize incide ntal take. EPA expect s that any measures the Services recommend to minimize incide ntal take will be consistent with ESA regulations and guidances conc erning reasonable and prudent measures. As stated in the ESA regulations under 50 CFR Part 402.14(i) (2), “Reasonable and prudent measures, along with the terms and conditions that impl ement them, cannot alter the basic design, location, scope, duration, or timing of the action and may involve only minor changes.” The Endangered Species Handbook (FWS and NMFS, 1998) explains that: “Measures are considered reasonable and prudent when they are consistent with the proposed action's basic design (e.g., narrowing of disturbed right-of-way at known species locations), location (e.g., temporary storage of equipment or other materials), scope, duration, and timing. Reasonable and prudent measures and terms and conditions should be developed in coordination with the action ag ency and applicant, if any, to ensure that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 393 of 642 the measures are reasonable, that they cause only minor changes to the project, and that they are within the legal authority and jurisd iction of the agency or applicant to carry
out.” Installation of closed-cyc le cooling is a major design alteration of a facility involving significant design and construction activities that are not in compliance with the ESA. (the range of costs associated with closed-cycle cooling is described elsewhere in today’s notice). Because installation of closed-cycle cooling does alter the basic design of a facility and would involve more than minor changes, as described in the Services’ regulations and Handbook, EPA does notexpect that installation of closedcycle cooling would be specified as a m easure solely for purposes of minimizing incidental take. The final rule at § 125.98(j) provides that no thing in this rule authorizes the take of threatened or endangered species of fish or wildlife. However, the Services may exempt take through an incidental take statement issued pursuant to ESA section 7(o) or a permit under ESA section 10. See 16 U.S.C. 1536 (o) and 16 U.S.C. 1539. Owners or operators This Clean Water Act rule cannot authorize take and does not purport to do so (nor can NPDES pe rmits authorize take prohibited under the ESA). Accordingly, under § 125.98(b)(1), th e permit writer, including EPA, must include, in the 316(b) permit requirements, sta ndard language that states the permit does not authorize the take of existing facilities whose intakes are within the range of habitat of one or more federally Federally- listed threatened orand endangered species should . In addition, under § 125.96(g) (additional mon itoring requirements) and § 125.97(g) (additional reporting requirements),where the Director requires additional measures to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 394 of 642 protect listed species, monitoring and repor ting requirements asso ciated with those measures will be included in the permit. 4. EPA Oversight of State-issued NPDE S Permits to Protect Threatened and Endangered Species. In 2001, the EPA, FWS, and NMFS signed a Memorandum of Agreement (MOA), (66 FR 11202, Feb. 22, 2001) with the objective of enhancing coordination between the agencies and to assist the agencies in executing their respective responsibilities under the Clean Water Act and Endangered Species Act. The MOA reflects, in part, the EPA’s longstanding comm itment to overseeing the operation of state NPDES programs to ensure protection of endangered species with existing regulatory requirements. The EPA reaffirms its commit ment to ensure coordination of the EPA’s and Services’ programs and appropriate protection of listed species, and EPA will follow the procedures in the MOA in overseei ng implementation of this rule. The MOA committed the EPA to a number of specific actions that are pertinent to today’s rule. Under the MOA, EPA committed, when contacted by the Services, to coordinate with the appropriate regional office of the USServices and the State/Tribe during the permit development proc ess, in order to ensure that permits will comply with all applicable CWA requirements. One way in which coordination between EPA and the Services is facilitated is through the excha nge of information about permits. The MOA facilitates such information exchange, as do EPA’s NPDES permit regulations at 40 C.F.R. § 124.10, that preceded the MOA. These regulations require the Director to provide public notice and a comment period for draft permits, and to notify persons*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 395 of 642 identified at 40 C.F.R. § 124.10(c)(1)(iii) a nd (iv). Such persons specifically include Federal and State agencies with jurisdiction over fish, shellfish, and wildlife resource and over coastal zone management plans and thus include the U.S. Fish and Wildlife Service and the National Marine Fisheries Service (the Services) to determ ine what threatened or endangered species may be present. If owners or operators of existing facilities have a reasonable expectation that threatened or enda ngered species may be present, they must send select information in their NPDES perm it application to the appropriate regional office of the Services. Permit applications submitted to the Director must include a certification that copies of only the source water baseline biolog ical characterization section of the permit application have been sent to the Services. EPA also encourages Directors. EPA’s commitment to coordinate effectively with the Services on relevant public comments on draft permits concerning threaten ed and endangered species. includes following the procedures in se ction IX.A.6 and 7 of the MOA: Nothing in this final rule authorizes th e take of federally listed threatened and endangered species. “Take” means an act whic h kills or otherwise harms listed species, including any modifications to federally designated critical habitat that significantly impact breeding, feeding, or sheltering. Nothing in this final rule, moreover, authorizes take for monitoring purposes except under the pr ovisions of an incidental take statement or ESA section 10 permit. The Director ma y not exercise site-specific de minimis*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 396 of 642 authority to allow take. If threatened or enda ngered species may be pr esent, the Director may not grant a de minimis exemption to the requirements of this final rule. EPA has authority to object to State issu ed NPDES permits that it finds likely to have more than minor detrimental effect on fe derally-listed species or critical habitat as noted in section IX.A.6 of the 2001 “M emorandum of Agreement Between the Environmental Protection Agency, Fish a nd Wildlife Service and National Marine Fisheries Service Regarding Enhanced C oordination Under the Clean Water Act and Endangered Species Act” (66 FR 11202, Feb. 22, 2001), which reads: EPA may make a formal objection, where consistent with its CWA authority, or take other appropriate action, where EPA finds that a State or Tribal NPDES permit will likely have more than minor detrimental effect on Federally-listed species or critical habitat. For those NPDES permits with detrimental effects on Federally-listed species or critical habitat that are minor, it is the intention of the Services and EPA that the Services will work with the State or Tribe to reduce the detrimental effects stemming from the permit. For those NPDES permits that have detrimental effects on Federally-listed species or critical habitat that ar e more than minor, including circumstances where the discharge fails to ensure the protection and propagation of fish, shellfish and wildlife, and wher e the State or Tribe and the Services are unable to resolve the issues, it is the in tention of the Services and EPA that EPA would work with the State or Tribe to remove or reduce the detrimental impacts*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 397 of 642 of the permit, including, in appropriate cases, by objecting to and Federalizing the permit where consistent w ith EPA's CWA authority. EPA will use the full extent of its CWA authority to object to a State or Tribal permit where EPA finds (taking into acc ount all available information, including any analysis conducted by the Services) thata State or Tribal permit is likely to jeopardize the continued existe nce of any listed species or result in the destruction or adverse modification of critical habitat. EPA may review or waive review of dr aft State or Tribal NPDES permits (40 CFR 123.24(d)). EPA will work with the Services through the local/regional coordinating teams to help determine which categories of permits should be reviewed for endangered species concerns. If EPA finds that a draft permit has a reasonable potential to have more than a minor detrimental effect on listed species or critical habitat, and review of a draft permit has been waived, EPA will withdraw this waiver during th e public comment period (see 40 CFR 123.24(e)(1)). In addition,The grounds for EPA’s exer cise of its discretionary authority to object to State or Tribal permits are described in accordance with the NPDES permitting regulations at 40 CFR 122.62(a)(2) concerningC.F.R. § 123.44. These include that the proposed permit modification based on availability of newfails to comply, or to ensure compliance with, any applicable requirement of this part, for example, that a permit application did not contain information , sufficient to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 398 of 642 demonstrate that the permit will ensure co mpliance with applicable requirements. See 40 C.F.R. § 123.44(c)(1).
If

EPA considers a newly listed threatened or endangered species to constitute new information if the speciesobjects to a NPDES permit under the MOA, EPA will follow the permit objection procedures outlined in 40 CFR 123.44 and coordinate with the Services in seeking to have the State or Tribe revise its permit. A State or Tribe may be present near thenot issue a permit over an outstanding EPA objection. If EPA assumes permit issuing authority for a NPDES permit, EPA will consult with the Servi ce prior to issuance of the permit (as a Federal action) as appropriat e under section 7 of the ESA.

While the MOA was adopted by the agencies in the context of NPDES permits for discharges of pollutants, it ap plies equally to NPDES permits that contain conditions for cooling water intake structure. Thus, the Director may reopen a NPDES permit if a newly listed structures. Moreover, s ection 316(b) of the CWA accords EPA broad authority to protect waters of the United States from adverse environmental impacts associated with cooling water intake struct ures, including adverse effects to Federallylisted species and designated cr itical habitat. In impleme nting this provision, EPA is authorized to consider costs and benefits of different approaches to minimizing these impacts. The importance of listed species, a nd accordingly the benefits associated with preventing their extinction, animated Congre ss’s enactment of the Endangered Species Act in 1973. In the case of aquatic organisms that are listed as e ndangered or threatened,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 399 of 642 and designated critical habitat, EPA has the au thority, and will exercise the full extent of its authority, to object to a permit proposed by a State where EPA finds (taking into account all available information, and giving, as appropriate, substant ial weight to the views of the Services) that a State or Tribal permit is likely to jeopardize the continued existence of such species or result in the destruction or adverse modification of such critical habitat. If the State permit is not modified to address EPA’s objections, EPA will issue the permit in consultation with the Se rvices. EPA’s commitment to use the full extent of its CWA authority to object to permits that are likely to jeopardize listed species or result in the destruction or adverse modification of critical habitat is a safeguard for the protection of listed species and critical habitat. Additionally, where the Service communicates in writing to EPA its conclusi on that a proposed Stat e permit is likely to jeopardize the continued existence of a liste d species, EPA will, upon request, provide the Service a written response. EPA’s commitm ent to use the full extent of its CWA authority, along with the other pr ovisions of the rule requiring the EPA, the Services, and State Directors to fully consider effects to threatened orand endangered species may be present near a cooling water intake structur eand critical habitat a nd include appropriate protections in NPDES permits, insures that the rule is not likely to jeopardize the continued existence of listed species or result in the destru ction or adverse modification of designated critical habitat

. EPA notes that the existing NPDES re gulations at 40 CFR 124.10 require the Director to provide public notice and a comm ent period for draft permits. This same paragraph also requires the Director to notify the persons identified at 40 CFR*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 400 of 642 124.10(c)(1)(iii) and (iv). These include Federal and State agen cies with jurisdiction over fish, shellfish, and wildlife resource and over coastal zone management plans; this includes the U.S. Fish and Wildlife Service and the National Marine Fisheries Service.
L. Permits for Existing Facilities Are Subject to Requirements under Other Federal Statutes EPA’s NPDES permitting regulations at § 122.49 list Federal laws that might apply to the issuance of NPDES permits under the NPDES rules. These include the Wild and Scenic Rivers Act, 16 U.S. C. 1273 et seq.; the National Historic Preservation Act of 1966, 16 U.S.C. 470 et seq.; the Coastal Zone Management Act, 16 U.S.C. 1451 et seq.; and the National Environmental Policy Act, 42 U.S.C. 4321 et seq. For a brief description of each of these laws, see § 122.49. The provisions of the Magnuson-Stevens Fishery Conservation and Management Act, 16 U.S.C. 1801 et seq., relating to essential fish habitat might also be relevant. Nothing in this final rule would authorize activities that are not in compliance with these or other ap plicable Federal laws (e.g., Marine Mammal Protection Act,EPA’s permit application requirements ensure that FWS and NMFS will have—and other Federal agencies as well, s hould have—a broader information base from which to make informed decisions. Note also that, in the case of EPA-issued permits, EPA’s NPDES permitting regulations specificall y require following the requirements of specific Federal laws that may apply to the issuance of NPDES permits. 16 U.S.C. 1361 et seq., and Migratory Bird Trea ty Act, 16 U.S.C. 703 et seq.).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 401 of 642 IX. Cost Development and Economic Impact Analysis This section summarizes EPA’s analysis of the social cost and economic impact for three regulatory options. BesidesIn addition to today’s rule, referred to as the Final Rule, EPA analyzed two other options similar to those options at proposal , which are referred to here (see section VI.D Other Options Considered for continuity as “Proposal Option x.”Today’s Final Regul ation for more context). The regulatory options can be described as follows :-:

 Final Rule: Impingement Flexible impingement mortality performance
standard for existing units based on modified traveling screens with fish

returns for all facilities with flow DIF greater than 2 mgd, closed-cycle cooling or its equivalent for new units (except for repowered units that

are high energy efficiency units), for impingement and entrainment, and a national BTA standard that requires a site

‐ specific determination of
entrainment BTA for all other existing units at existing facilities;

 Proposal Option 2: Intake flow commensurate with closed-cycle cooling for facilities that have a design in take flow of greater than 125 mgd, flexible impingement mortality limitations based on modified traveling

screens with fish returns for all facilities with flow DIF greater than 2 mgd, and closed-cycle cooling or its equivalent for new units; and

 Proposal Option 4: Impingement Flexible impingement mortality limitations based on modified traveling screens for all facilities with*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 402 of 642 flow DIF greater than 50 mgd, closed-cycle cooling or its equivalent for new units, and a site-specific determination of entrainment BTA for all
other facilities and of forimpingement mortality controls for at facilities with flow less than or equal to 50 mgd. The first part of this section provide s an overall summary of the costs of the regulatory options to regula ted facilities and Federal and State governments. This discussion is followed by a review of the method for developing compliance cost estimates. The third part provides an estimate of the total social co sts of the regulatory options. The final part reviews the econo mic impact of the regulatory options. A. Overview of Costs to Regulated Facilities and Federal and State Governments
ForIn estimating the total cost and economic impact of the regulatory options, EPA estimated costs for the following com ponents: capital costs and other one-time costs; installation downtime costs; annua l operation and maintenance costs; and recordkeeping, monitoring, entrainment-related studies, and reporting costs. All of these costs are included in the economic im pact analysis for the final rule. The cost estimates reflect the incremental costs attributed only to this final rule. For example, facilities already having closed-cycle recirculating systems as defined at § 125.92 will meet the impingement mortality and entrainment sta ndards of today’s rule and, therefore, wouldwill not incur costs to retrof it new technologies. These fac ilities, including those in New York and California, wouldwill still incur permitting costs. EPA has established that*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 403 of 642 existing closed-cycle coolingrecirculating systems maywill comply with the impingement BTA requirements. For the economic analysesanalysis , EPA distinguished between the two industry groups regulated by the standards fo r existing facilities as follows:

 Electric Power Producers (electric gene rators)—facilities owned by investorowned utilities, municipalities, States, Federal authorities, cooperatives, and nonutilities, whose primary business is electric power generation or related electric power services.

 Manufacturing and Other Industries (man ufacturers)—facilitie s in the paper, aluminum, steel, chemicals, petroleum, food and kindred products (primary manufacturing industries), and other i ndustries. In addition to engaging in production activities, some of these facilities also genera te electricity for their own use and occasionally produce excess power for sale. For a more detailed discussion of costs to complyingregulated facilities and costs to Federal, State, and local governments, s ee Chapter 8 of the TDD and Chapter 3 of the
EA. Electric generators incurring costs incl ude facilities owned by private firms, governments, and electric cooperatives. Manufac turers incurring costs include facilities owned by private firms only. The administra tive costs to Federal, State, and local governments include the costs of rule implementation—e.g., permits, monitoring, and working with facilities subject to th e final rule to achieve compliance.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 404 of 642 In the economic analysesanalysis , EPA accounted for these costs on an asincurred basis. They are usedreported on a pre-tax or after-tax basis, depending on the specific component of the analysis. These cost s also underlie the analysis of the social costs of the regulatory options. B. Development of Compliance Costs This section describes the data and methods used to estimate compliance costs of the options considered for today’s final rule. Costs were developed for technology controls to address impingement mortality separately from technology controls for entrainment because the requirements of the va rious rule options considered may lead to different technologies being used by each facil ity to comply. The options considered may impose different compliance timelines for impingement mortality and entrainment control technologies, alt hough decision making has been synchronized to avoid investments in impingement BTA controls th at could later be rendered obsolete by the BTA requirements for entrainment. Different methodologies were used and each is briefly described below. More detailed information on these methodologies and costs of other technologies and regulat ory approaches are available in Chapter 8 of the TDD. 1. Combined Facility-Specific and Model-Facility Approach EPA estimated national level costs for regulated facilities under the final rule and other regulatory options. In general, facility-s pecific data can be used to determine the requirements that apply to a f acility and whether that faci lity already meets the final rule’s requirements. This approach require s facility-specific technical data for the approximately 1,065 facilities that EPA estimates will be subject to the final rule. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 405 of 642 change in the number of facilities subject to the final rule compared to the number estimated at proposal is attributable to changes in how EPA accounted for baseline closures. See Appendix H of the EA for more details. An alternative approach is to develop a series of model facil ities that exhibit the typical ch aracteristics of the regulated facilities and calculate costs for each mode l facility; EPA would then determine how many of each model facility would be needed to accurately represent the full universe of regulated facilities. The approach used in this effort invol ved calculating compliance technology costs for 338 individual facilities for which EPA had detailed technical data from its questionnaires regarding the intake desi gn and technology. Specifically, these are the facilities that completed the detailed tec hnical questionnaire. Wh ere facilities reported data for separate cooling wa ter intake structures, EPA de rived compliance technology costs for each intake, and summed these intake costs to obtain total costs for each facility. EPA used the actual facility data to construct model facilities . Each model facility’s costs were then multiplied by a specific weighting fact or, derived from a statistical analysis of the industry questionnaire, to obtain industr y-wide costs. The we ighting factors are similar to the ones derived during the deve lopment of the 2004 Phase II and 2006 Phase III rules. 2. Updates to the Survey Data For the 2004 Phase II rule analysis, EPA de veloped facility-specific cost estimates for all facilities and published those co sts in an appendix (69 FR 41669, July 9, 2004). Since the initial implementation of the 2004 Phase II rule, EPA identified several*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 406 of 642 concerns with using only the facility-specific costing approach, and th e use of those costs in Appendix A. Since 2004 EPA has collected data from industry and other groups as described in sectionSection III of the proposed rule (76 FR 22183, April 20, 2011). These data generally reflect changes to actual inta ke flow, design intake flow, intake velocity, technology in place, and operational status. EPA developed a new master database including this new data to supplement the da ta from the detailed t echnical questionnaire. Although it has been more than 10 years sin ce the detailed techni cal questionnaire was initially collected, EPA has unde rtaken more than 50 site visits and reviewed available literature. In addition, EPA co mpared its data with that collected by Edison Electric Institute, Electric Power Research Institu te, and the Energy Information Administration. On the basis of that review, EPA concluded that the master database is representative and reasonably reflects costs for all facilities. 111 The following section describes how EPA used this new database to estimate compliance costs. 3. Tools for Developing Compliance Costs During development of the 2004 Phase II rule, EPA began developing a spreadsheet-based tool that would provide faci lities and permit authorities with a simple and transparent method for cal culating facility-sp ecific compliance costs. EPA refined the tool in developing the Phase III regulati ons. EPA has since made further refinements to the cost tool, which was used to calcu late the compliance costs for impingement

111 EPA notes that, while it has not collected updated technical information for every facility, it has updated financial data, as discusse d later in this section.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 407 of 642 mortality for today’s final rule. The cost t ool employs a decision tree (for a graphical presentation of the decision tree, see Chapte r 8 of the TDD) to determine a compliance response for each model facility. The d ecision tree assigns a technology costing “module” for the retrofit to a given technology. Impingement cost estimates are derived through a series of computations that apply f acility-specific data (s uch as DIF, width of intake screens, and such) to the selected technology module. Cost tool outputs include capital costs, incremental ope ration and maintenance costs, and installation downtime (in weeks). To calculate the compliance costs of re trofitting to closed-cycle cooling for controlling entrainment, EPA used a second to ol based on a cost-estimating spreadsheet using a modified version of a similar tool developed by the Electric Power Research Institute (EPRI). EPRI’s first draft methodol ogy presented three levels of capital cost according to the relative difficulty of the retr ofit project (easy, aver age, and difficult). For electric generators, EPA used costs for the average level of difficulty because it was developed across a broad spectrum of facilities and is the most appropriate for estimating national level costs rather th an lower or upper bounds. For manufacturers, EPA used the difficult level of retrofit costs. This reflects the more complex water systems and technical challenges to retrofitting closed-cycle cooling at multiple locations within a manufacturing facility. In site visits, EP A found the largest manufacturing facilities had multiple intakes, distributed the water to multiple producti on processes, have already significantly increased water reuse as a result of water audits, and generally operate a complicated water distribution network at the entire facility, and w ould therefore require*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 408 of 642 multiple retrofits to convert the facility to be commensurate with closed-cycle recirculating system. 112 Accordingly, EPA determined that the difficult level of retrofit costs is more representative for purposes of estimating national level costs. EPA’s tool includes additional modifications to EPRI’s methodology, such as increased compliance costs for approximately 25 percent of facilities to reflect the additional expense of noise control or plume 113 abatement, and using only the coo ling water flow rate for non-contact cooling water flow 114 for purposes of estimating costs for closed-cycle cooling. EPA has included the spreadsheet tools in the docket for today’s final rule to assist both facilities and permit authorities in estimating compliance costs (see DCNs 10-665512-6650 and 12-6651 for the cost tool, as well as and DCN 10-6930 for EPRI’s retrofit analysis ). 4. Which Technologies Form the Basi s for Compliance Cost Estimates? EPA identified two broad classes of c ontrol technologies that may be used singularly or in combination to comply with the final rule. Thes e classes of control technologies are (1) technol ogies that address impinge ment mortality, and (2) technologies that address entrainment. For further details, see Section VI.

112 A refinery, for example, may have dozens of heat exchange processes throughout the plantfacility , including a mix of wet and dry non-contact cooling equipment. 113 The EPRI tool includes drift abatement technologies in its cost assumptions, so no additional costs were included for drift eliminators. 114 As described in the TDD, EPA used only non-contact cooling water flows in determining the proper size for wet cooling towers. Cooling towers are not widely used for contact co oling or process water, so these flows were excluded. For electric generators, the vast majority of flow is non-contact cooling, but manufacturers are more varied in their water usage.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 409 of 642 For the impingement mortality requireme nts, EPA analyzed data from a wide variety of technologies and facilitie s, and concluded that modified ( Ristroph ( or equivalent) 3/8” mesh traveling screens with fish-friendly fish handling and returns are the most appropriate basis for determining compliance costs. 115 As discussed in Section VI of this preamble, a facility may also comply with impingement mortality requirements by meeting a maximum intakelow velocity limitcompliance alternative , operating a closed-cycle recirculating system as defined at § 125.92 ,(c), or employing an existing offshore velocity cap as defined at § 125.92 .(v). On the basis of facility-specific data, EPA made a preliminary assessment of which model facilities would not currently meet impingement mortality requirements through an y of these pre-approved technologies, and assigned technology costs on the basis of modifi ed traveling screens with a fish handling and return system if the existing intake used traveling screens. If the intake does not currently use traveling screen s, EPA assigned costs for inst alling technologies that would comply with the low velocity standardcompliance alternative (larger intakes, wedgewire screens, or variable speed pumps) base d on site-specific conditions. These assigned technologies will meet the BTA standard (see § 125.94(b)). Although EPA no longer requires installation of barrier nets or equiva lent technologies to pr otect shellfish in all tidal waters, EPA included the cost of barri er net technology at a pproximately 10 percent

115 Note that this does not preclude the use of other technologies; EPA simply used the available performance data in deriving the performance requirements. EPA’s research has shown that other technologies may also be capable of meeting the fina l rule requirements; however, these technologies are not available at all facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 410 of 642 of the intakes as a cost component for the “s ystems” approach to compliance with the IM performance standards. EPA also analyzed the costs of those options associated with entrainment requirements based on wet cooling systems. In some cases, costs reflect installation of multiple technologies, as impingement morta lity and entrainment control requirements were applied separate ly to each facility. EPA also evaluated ot her technologies for reducing entrainment, such as seasonal ope ration of cooling towers, partial towers, variable speed pumps, and fine-mesh screens. The costs of the final rule include but are not limited to permit applications; characterization of the source water, intake structures and any technologies in pl ace; studies of impingement and entrainment; and recordkeeping, monitoring, and re porting. The costs also include costs of technologies for complying with the BTA for IM; the cost of additional technologies that may be required to meet the site-specific BTA for entrai nment are not included, nor are costs for additional measures that may be required for protection of listed threatened and endangered species. Section VI further describes the pe rformance of these technologies. A detailed discussion of how the costs were developed is in Chapter 8 of the TDD. 5. How is Installation Downtime Assessed? Installation downtime is the length of time that a facility might need to shut down for installing a compliance technology. Downtime estimates primarily assume that the facility would need to comp letely shut down operations for some portion of the installation period to retrofit an intake, such as re locating an intake, connecting wet cooling systems into the facility, or rein forcing condenser housings. EPA estimated*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 411 of 642 downtime as incremental outages, taking into account the periodic out ages all facilities incur as part of preventative maintenance or routinely scheduled outages. For example, nuclear facilities have refueling outages approximately every 18 months lasting approximately 40 days. 116 The entrainment control implementation periods under Proposal Option 2, 10 years for fossil fuel plantsfacilities and 15 years for nuclear plantsfacilities , would provide facilities with an oppor tunity to schedule the retrofit when other major upgrades are being done, ther eby significantly reducing downtime. For most facilities subject to im pingement mortality, EPA assigned no incremental downtime. Facilities that are replacin g or rehabilitating existing traveling screens typically do so one intake bay at a time without a ffecting the overall operations. 117 EPA has also found that facilities that need to scrub screens do so during other routinely schedu led outages. For some compliance technologies, however, such as relocating an intake or expanding an existing in take to lower the intake velocity, several weeks of downtime may be incurred because these are more invasive tasks. See TDD Exhibit 8-4 for EPA’s net construction downtime for the various IM compliance technologies. EPA reviewed historical retrofit data and site visits conducted since 2004 and has largely retained its assumptions for downtim e from the Phase II and Phase III rules for facilities retrofitting to closed-cycle cooling. On average, EPA assumes the net

116 Nuclear Energy Institute re ported average length of outage from 2003 to 2009. 117 EPA’s data shows that facilities ha ve an average of 4 to 5 bays.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 412 of 642 installation downtime for retrofitting to closed-cycle cooling retrofit for non-nuclear electric generators is 4 weeks. This total downtime allows for the tie-in of the closedcycle system to the existing cooling water system. The refueling outage downtime, the safety-sensitive nature of nuclear facility retrofits, and other data in EPA’s record supports 28 weeks as the net construction downt ime for nuclear facili ties. EPA converted downtime for manufacturing f acilities that use cooling water for power and steam generation into the incremental cost for pur chasing electricity during the outage. For individual process units other than power ge neration units at a manufacturing facility, on average the downtime was assumed to be zero. In EPA’s extens ive experience with manufacturers, EPA’s record reflects that ma nufacturers are generally able to shut down individual intakes for specific process lines, use inventory approaches such as temporary increases of intermediate products, and de velop other workarounds without interrupting the production of the entire f acility. For further discussion of how EPA accounted for installation downtime in estimating national costs, see below. 6. How is the Energy Penalty Assessed? The term energy penalty in relation to a conversion to closed-cycle cooling has a number of different interpretations. The first is the extra power require d to operate fans at a mechanical draft cooling tower and additional pumping requirements (sometimes referred to as auxiliary power consumptionenergy requirements or parasitic loads). The second is the lost power output because of th e reduction in steam turbine efficiency from an increase in cooling water temperature re lative to once-through cooling (often referred to as the turbine efficiency penalty or turb ine backpressure penalty ). EPA is clarifying*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 413 of 642 that it views the former as incremental O&M costs, and the latter is EPA’s interpretation of the energy penalty. Energy penalty costs ap ply only to facilities retrofitting to closedcycle cooling . without replacing the condenser. Facilities installing a new impingement mortality technology will not generally face an energy penalty and will generally see little or no measureable change in auxili ary power consumption. EPA’s national-level costs include both these costs. The auxili ary power consumption was included as a separate component in the operation and ma intenance costs and was assessed for all facilities. The turbine efficiency penalty was typically expressed as a percentage of power output. EPA estimates the turbine efficiency energy penalty for nuclear and non-nuclear power generation would be 2.5 and 1.5 percent, respectively (see Chapter 8 of the TDD). For most manufacturers generating their own electricity, EPA assumed the same energy penalty for turbine efficiency loss as estim ated for non-nuclear power facilities (i.e., 1.5 percent). 7. How Did EPA Assess Facility-Level Costs for the National and Regional Economic Impacts Analysis? As part of the economic impact analys is, EPA assessed the impact of the final rule’s requirements on electric generators in the context of national and regional electricity markets. For this analysis, EP A used the Integrated Planning Model (IPM ® ), a comprehensive electricity market optimizati on model that assesses such impacts within the context of regional and nati onal electricity markets. EPA has used IPM to analyze the impacts of various regulatory actions affecti ng the electric power sector over the last decade, particularly Clean Air Act regulations.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 414 of 642 Because IPM requires facility-specific co sts for each analyzed facility, yet compliance costs were developed as weight ed sums of model facility costs, EPA developed a waymethod to distribute the aggregate cost s to facilities that were not themselves model facilities. For these facilities , EPA converted facility-level costs developed for model facilities to a cost per mgd DIF and then averaged these values to derive cost equations using DIF as the independent vari able. These cost equations provide average costs that can be applied to any facility by simply scaling to that facility’s DIF. For details on the IPM analysis, see the EA, Chapter 76 . For details on facility cost development, see the TDD, Chapter 8. 8. How Did EPA Assess Costs for New Units? Power generation and manufacturing units that are a new unit as defined at § 125.92 (u) must meet an entrainment reduction performance standard based on closedcycle cooling or an equivale nt reduction in entrainment fo r the cooling water component of the intake flow based on the DIF. This se ction briefly describes the data and methods used to estimate compliance costs for new units at existing electric generators and manufacturers. Chapter 8 of the TDD has a complete description of the methodology. a. New Units at Existing Electric Generators Compliance costs for new units at existing electric generators are estimated using a similar methodology to that used for estima ting compliance costs for existing facilities. As described in ChapterChapters 6 and 8 of the TDD, however, there are a number of differences in costs between a closed-cycle cooling retrofit at an existing facility compared to installing closed-cycle cooling at a new unit. In general, these differences*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 415 of 642 result in lower costs for the installation of a closed-cycle recirculating system at a new unit (as compared to a retrofit scenario), due to improved efficiency of the turbine, the elimination of construction down time, greater ease of integra ting the closed-cycle system into the design and construction of the new un it, offsetting costs of certain system and construction components, and greate r overall system optimization. EPA could not determine precisely which facilities will construct new units. Instead, EPA used an approach to estimat e what portion of the new capacity (i.e., additional megawatts capacity to be construc ted each year) would be subject to the final rule. Using national projections of increased generating capacity, 118 EPA categorized the new capacity into fourthree groups for 316(b) compliance pu rposes: 1) subject to the Phase I rule, 119 2 ) potentially subject to t oday’s final rule, but projected to be excluded from the entrainment requirements because they meet the definition of high energy efficiency, 3 ) subject to today’s final rule, but proj ected to install a cooling system that complies with the rule regardle ss of the rule requirements, 120 and 43 ) subject to today’s

118 Capacity increases include considerations for fuel type and whether the capacity increase would be realized as additional capacity or as part of a re powering project. Capacity not subject to Phase I was apportioned into stand-alone and repowered categories.. See Chapter 8 of the TDD for details. 119 New capacity that is part of a new facility (as de fined by the Phase I rule) is subject to separate requirements not addressed by today’s rule. Today’s requirements for new units , however, are based on the Phase I approach and also require flow reduction commensurate w ith a closed-cycle recirculating cooling system. 120 Data in the record show a marked increase in the us e of closed-cycle cooling in facilities constructed in recent years and for those projected to be constructed in the near future. These data indicate that in the 1990s (prior to the Phase I rule), 83 percent of new cooling systems installed were closed-cycle cooling systems and that the current trend wa s approximately 97 percent. Based on thisthese data and the understanding that not all repowering projects will involve new cooling systems EPA assumed that 75 % percent to 90 % percent of new units will be designed with a closed-cycle recirculating cooling system*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 416 of 642 rule and projected to incur complian ce costs. Exhibit IX-1 presents the annualestimated total new capacity ofand the estimated capacity for new stand-alone and repowered units.
Exhibit IX-1. Annual capacity addition s in newly constructed generating units and repowered units by cost category

Exhibit IX

‐ 1

Fuel typeType Total including phaseIncluding Phase I Existing facilities onlyFacility New Units Only

New capacityCapacit y Repower ed existing Total StandaloneAlone Repower ed Total

MW MW MW MW MW MW Fossil Fuel 295 364 659 80 373 453

Combined Cycle 3,264 2,065 5,32 9 147 2898 3,044

Total 3,559 2,430 5,98 9 227 3,271 3,497

Costs for closed-cycle cooling are assigned to a portion of new stand-alone units, as
shown the generating capaciti es in Exhibit IX-3 only

. Exhibit IX-3. Annual and 24-year tota l capacity at existing facilitie s requiring costs for closed-cycle

Exhibit IX ‐ 3

Fuel typeType Annual onlyOnly 24-year total onlyTotal OnlyStandaloneAlone Repowered Tota l StandaloneAlone Repowere d Total

MW MW MW MW MW MW

Fossil Fuel 8 93 10 1 191 2240 243 1 Combined Cycle 15 0 15 353 0 353

regardless of the requirements of today’s rule. See DCN 12- XXX6672 . As a result, this category of new capacity was not assigned any compliance costs. Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 417 of 642 Total 23 93 11 6 544 2240 278 4

EPA then estimated the total costs for the fourththird group (i.e., those units that would incur compliance costs) to comply with requirements for new units. EPA used certain assumptions regarding cooling system design to modify cost equations used for estimating closed-cycle retrofit costs at exis ting units and then applied the cost equations to the portion of projected new unit generati ng capacities that woul d be subject to the

new unitsunit provisions of today’s rule . These costs include capital 121 and O&M costs, as well as a reduction in net generating capaci ty due to auxiliary power consumption to operate the closed-cycle recirculating system . Due to the complex nature of constructing a new unit, there is no increase in the length of the construc tion project as a result of employing a closed-cycle system; similarly, th ere is no downtime, as the unit has not yet begun operating. See Chapter 8 of th e TDD for more information. b. New Units at Existing Manufacturers

121 The record indicates that the total estimated capital co st for installing a closed-cycle recirculating system at a new unit to comply with today’s rule ranges from a negative value (as compared to the cost for installing a once-through system) to a positive value that could approach the cost of an existing facility retrofit. Said differently, if one assumes that the ne w unit would have constructed a new intake structure, EPA’s record shows that the capital costs for the new unit once-through system woul d be greater than if the new unit installs a closed-cycle recirculating system. (See DCN 10-6650.) Alternatively, if the new unit did not require modification of the existing cooling system infrastructure, then the capital costs for installing a closed-cycle recirculating system would be similar to an existing facility retrofit minus some tie-in costs since the condenser is being replaced . While EPA envisions that the actua l costs will vary (i.e., some will be in the negative portion of the range and others will be in the positive), EPA is also unable to project what cooling water intake arrangements a new unit w ill use. Consequently, for all new units, EPA selected a capital cost equal to the midpoint between the tower only and the easy retrofit costs. As a result, EPA assumed that the capital costs for these units was $154 per gpm in 2009 dollars which converts to $30,800 to $60,060 per MW capacity depending on fuel type. For a more detailed discussion, see TDD Chapter 8.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 418 of 642 On the basis of site visits to manufact uring facilities, EPA has observed that manufacturers are increasingl y taking advantage of wa ter conservation and reuse measures as a means of cost-cutting. EPA also notes that manufactur ers are subject to a wide variety of ELGs and that, in the course of complying with requirements for those ELGs, a facility may also reduce its intake flow. (See Chapter 4 of the TDD.) A new unit provides the opportunity to employ such measur es to the fullest extent in designing the new unit. The availability of water conser vation and reuse opport unities, coupled with operational flexibility at plantsfacilities with multiple industrial processes, leads EPA to conclude that facilities inst alling new units at existing manuf acturers will comply with the new unitsunit provisions through ach ieving the 90 percent reduction required at § 125.94(e)(2). Thus, EPA concluded that the new unit provisions would result in no additional compliance costs for achieving flow commensurate with closed-cycle cooling at new units. 122
To the extent that manufacturers are not ab le to incorporate water reuse measures as a means of complying with the new un it provision, EPA’s estimate of new unit costs for manufacturers may be an underestimate. Manufacturers generally withdraw less water than electric generators (including manufactur ers who generate thei r own electricity). Thus EPA has concluded that any unde restimation would be insignificant.

122 EPA also notes that some manufacturers may also be able to increase reuse to a degree where the facility no longer meets the applicability thresholds of today’s rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 419 of 642 C. Social Costs EPA assessed the costs to society resulting from the final rule and other options considered in development of this rule. The findings presented in this section assume that facilities with impoundments will qualify as havi ng closed-cycle recirculating systems in the baseline. 123 As a result, EPA assigned no compliance technology costs to these facilities; however, these facilities remain subject to today’s rule and are assigned administrative costs. To the extent that some of these facilities do not qualify as having closed-cycle recirculating systems in the base line, the costs reported in this section may be underestimates. The social cost of regulatory acti ons includes costs to electric generators and manufacturers to comply with the final rule , and costs to States and federalthe Federal government to administer the ru le. These costs ar e the opportunity costs to society of employing scarce resources to prevent the environmental damage that would occur without today’s rule. EPA estimat ed total social cost s for existing and new units at existing facilities. In estimating social costs, EPA assumed that the final rule and other options considered in development of this rule will not affect the aggregate quantity of electricity or other affected goods and services sold to c onsumers. Thus, the social cost of regulatory requirements includes no loss in consumer and producer surplus from reduced sales of electricity or other goods and services produ ced by regulated facilities. The Agency

123 In other words, EPA assumed facilities indicating use of an impoundment in response to their technical survey have lawfully created such impoundments for the purposes of cooling water.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 420 of 642 calculated the social cost of the fina l rule and the other options considered , using two discount rates: 3 percent and 7 percent. For existing facilities, EPA assumedassumes that all facilities subject to the final rule will begin bearing costs associated with today’s rule beginning as soon as 2014, and likely complete investments associated with today’s rule by 2030, depending on the technology-installation schedules for the final rule and other regulatory options considered. 124 EPA performed the social cost analys is over a 51-year period to reflect (1) the last year in which individual facilitie s are expected to achieve compliance (2030) under the final rule or any of the options c onsidered, (2) the life of the longest-lived compliance technology installed at any facility (30 years), and (3) a period of five years after the last year of comp liance technology operation during wh ich benefits continue to accrue. Under this framework, the last year for which EPA has calculated projected costs is 2059, with benefits continuing beyond 2059, though on a diminishing basis, through
2064. 125

124 EPA conducted the cost and economic impa ct analyses on a calendar-year basis ; for the economic impact. For these analyses, EPA treatedused calendar year 2013 as the promulgation year of today’s rule and 2014 as the first post-pro mulgation analysis year. This slight difference from the actual promulgation year of 2014 results from the fact that EPA complete d its cost and economic imp act analyses for the final rule and alternative options before EPA decided to delay promulgation from 2013 to 2014. Because the rule is being promulgated during the first half of 2014, EPA concluded that it would be reasonable to continue using 2013 as the assumed promulgation year for the regulatory analysis. EPA expects the differences in the estimated costs and benefits of the rule due to this slight imprecision to be minimal. 125 For this analysis, EPA assumed that the la st year of technology installation for all complyingregulated facilities under any of the regulatory options—i.e., 2030—is also the first year of steady-state compliance with regulatory requirements.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 421 of 642 To estimate social costs for existing f acilities, EPA developed a year-explicit schedule of compliance outlays over the 46-year period from 2014 to 2059 according to cost-incurrence assumptions (for details on cost-incurrence assumptions, see EA, Chapter 3). EPA then adjusted these costs for predicted real change (i.e., adjust ed for inflation) to the year of their incurrence and discount ed all costs to the beginning of 2013, the final rule’s promulgation year . used for the analysis. Because the analysis period extends beyond the useful life of some compliance equipment, the social cost analysis accounts for re-installation of impingement mortality compliance technologies after the end of their initial useful life periods . However, for the regulatory op tion that requires a specific entrainment control technology (e.g., wet cooling systems)—Proposal Option 2—EPA does not expect regulated facilities to comple tely rebuild these systems (components such as piping and the concrete basin can be reused). EPA accounted for other technology replacement costs (such as pumps and fill material) as part of ongoing operations and maintenance expenses. For new units at existing electric gene rators, EPA calculated an average annual amount of new capacity to be c onstructed during the 46-year so cial cost analysis period, beginning in 2014 and using EIA projections of electri city demand growth, and based new unit costs on that average.. While EPA does not expect the annual construction of new units to be constant, predicting the y ear-to-year fluctuati ons would be resource intensive. On average, EPA assumes that its estimate of new unit costs is reasonable. EPA accounted for compliance costs for these uni ts on an as-incurred basis, as done for existing facilities. Similar to compliance costs for facilities subject to the final rule, EPA*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 422 of 642 analyzed costs incurred by State and Fede ral governments for administering the regulation on a year-explicit basis over the 46-year soci al cost analysis period. Exhibit IX-4 presents so cial costs for existing units at existing facilities under the final rule and other options considered, calcu lated using 3 percent and 7 percent discount rates. At the 3 percent discount rate, EPA estimates total annualized social costs of $ 283.3272 million for the existing unit provision of today’s rule, $ 261.7252 million for Proposal Option 4, and $3, 999.7643 million for Proposal Option 2. At the 7 percent discount rate, these costs are $ 296.9295 million for today’s rule, $272 .8 million for Proposal Option 4, and $3, 893.0583 million for Proposal Option 2. 126 See the EA (Chapter 7) for an explanation of why the a nnualized costs at the 3 percent discount rate are lower than the annualized co sts at the 7 percent discount rate for the final rule and Proposal Option 4, while the inverse is the case for Proposal Option 2 (annualized costs at the 3 percent discount ra te are higher than at th e 7 percent discount rate). The largest component of social cost is the cost of regulatory compliance incurred by regulated

126 Because EPA was unable to identify those facilities for which entrainment cont rol technology would be established as BTA standards on a site-specific ba sis, the Agency did not analyze technology costs associated with these site-specifi c requirements. Consequently, the co st and economic analyses conducted in support of today’s rule assume that under the ex isting unit provision of the final rule and Proposal Option 4, Electric Generators and Manufacturers insta ll IM technology only. Thes e analyses also assume that under Proposal Option 2, Electric Generators with DIF exceedin g 125 mgd install only cooling towers and all other Electric Generators install only IM technologies. Under Proposal Option 2, a small number of Manufacturers are assigned both IM and entrainment control technologies because of engineering issues associated with maintaining separation of contact and non-contact cooling water in some manufacturing operations. Although EPA did not estimate technology costs for facilities for which entrainment technology is established as BTA on a site-specific basis, EPA did include the costs for data collection and studies that facilities will need to perform in order to provide information to Directors to make these site-specific determinations. EPA included these costs in the administrative costs that are estimated for the final rule and other options considered.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 423 of 642 facilities (as opposed to administrativ e costs estimated for States and federalthe Federal government). These costs include (1) one-t ime technology and othe r initial costs of complying with the rule, (2) one-time costs of installation downtime, (3) annual fixed and variable operating and maintenance costs, including auxiliary energy requirement, (4) value of energy penalty from operation of compliance technology, and (5) permitting costs (initial and follow-up start-up costs, in itial permit costs, a nnually recurring costs associated with monitoring, and non- annually recurring permitting costs). As shown in Exhibit IX-4, complianceCompliance costs estimated for electric generators account for the largerlargest share of total compliance-related social cost and direct compliance cost under al l three options. On a per-facility basis and at the 3 percent discount rate, the annualized pre-tax compliance costs for the electric generators segment under today’s final rule are $0.4 million, $0.4 million under Proposal Option 4, and $6 .9 million under Proposal Option 2. 127 For manufacturers, the average cost per regulated facility at the 3 percent discount rate is $0.1 million under the final rule and Proposal Option 4, and $0. 54 million under Proposal Option 2. 128 As shown in Exhibit IX-4, EPA’s analysis found a similar profile of per facility costs using the 7 percent discount rate (see EA Chapter 87 for additional detail). EPA’s estimate of Federal and State

127 Calculated usingby dividing direct compliance costs for each type of facility by the total of 544 electric generators covered bysubject to today’s rule on the basis of facility count-based weights (see EA Appendix H). 128 Calculated using the total of 521 manufacturers covered bysubject to today’s rule on the basis of technical weights (see EA Appendix H).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 424 of 642 government costs for administering this rule is small in relation to the estimated direct cost of regulatory compliance. EPA estimates $1 .0 million in annual administrative costs to States and Federal government for the final rule, using both the 3 and 7 percent , . discount rates. These cost values are the same for Proposal Option 4. EPA estimates $0.7
million in annual administrative costs to States and the Federal government for Proposal Option 2, regardless of the discount rate used.

Exhibit IX-4. Total annualize d social costs –existing units at existing facilities (in millions, 2011 dollars) a Proposal Option 4 Final Rule Proposal Option 2 Using 3 percent discount rate Direct Compliance Costs Electric Generators $ 208.7202.9 $ 209.6203.7 $3, 755.6413.3 Manufacturers $ 52.047.8 $ 7267 .7 $ 243.4229.2 Total Direct Compliance Cost $ 260250 .7 $ 282.3271.4 $3, 999.0642.5 State and Federal Administrative Costs $1.0 $1.0 $0.7 Total Social Costs $ 261.7251.8 $ 283.3272.4 $3, 999.7643.2 Using 7 percent discount rate Direct Compliance Cost: Electric Generators $ 216.4219.2 $ 217.3220.0 $3, 638.9339.3 Manufacturers $ 55.451.9 $ 78.674.2 $ 253.4243.0 Total Direct Compliance Cost $271. 81 $ 295.9294.3 $3, 892582 .3 State and Federal Administrative Costs $1.0 $1.0 $0.7 Total Social Costs $272. 81 $ 296.9295.3 $3, 893583 .0

a Cost estimates excl ude costs associated with baseline closure facilities.
EPA also estimated the cost for installing closed-cycle cooling system technologyrecirculating systems at new units at existing electr ic generators, to reflect the costs of today’s rule. As shown in E xhibit IX-5, EPA estimated that the new unitsunit provision of the final rule will resu lt in an annualized cost of $ 14.12.5 million and $ 122 .0*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 425 of 642 million using 3 percent and 7 percent discount rates, respectively, including compliance costs to facilities and administrative costs to States and federalFederal government. The Agency estimated that at a 3 percent di scount rate, the total social cost of the final rule, including the existing and new unitsunit provisions, will be $ 297.4275 million. At a 7 percent discount rate, this cost is $ 308.9297 million.

Exhibit IX-5. Annualized total social co st of the final rule – existing and new units at existing facilities (in millions, 2011 dollars) a,b 3% Discount Rate 7% Discount Rate New Units $ 14.12.5 $ 122 .0 Existing Units $ 283.3272.4 $ 296.9295.3 Existing and New Units $ 297.4274.9 $ 308.9297.3

a Cost estimates excl ude costs associated with baseline closure facilities.

b Values may not add due to rounding.

D. Economic ImpactImpacts EPA used several analytic approaches to assess the economic impact of today’s rule and the other options considered, on el ectric generators a nd manufacturers. EPA conducted separate analyses for elect ric generators and manufacturers . Though undertaken with differences in methodology, th e analyses for both regulated facility segments involve (1) a cost-to-revenue analysis , and (2) a business value test based on an after-tax cash flow analysis. using different methodologies for each regulated facilities segment. The following sections summarize the methodologies EPA used to conduct the economic impact analyses and the findings of these analyses. EPA conducted the economic impact analyses discussed in this section for existing facilities; the Agency*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 426 of 642 used compliance cost estimates from the EPA engineering analysis (see sectionTDD Section X.B). 1. Electric Generators For the electric generators segment, EPA assessed the economic impact of the existing unit provision of the final rule and other options it considered in three ways: (1) the financial burden associated with a part icular regulatory opti on on facilities and entities that own them, (2) how potential changes in the price of electricity would affect electricity consumers, in general, and re sidential households, in particular, and (3) broader economic impacts on the electri city market, taking into account the interconnectedness of regional a nd national electricity markets. In preparing the first two sets of analyses, EPA developed and used sa mple weights to extrapolate impacts assessed initially at the level of a sample of facilities , to the full population of facilities subject to the final rule. For information on how EPA de veloped and used sample weights, see the EA, Appendix H. In addition, EPA assessed the impact of th e new unit provision of the final rule on decisions of existing facilities to construct stand-alone new un its that would be subject to the new unit provision. EPA made this assessm ent in two ways: (1) on the basis of comparison, on a per MW basis, of compliance costs for new units to the overall cost of building and operating generating units and (2 ) as is the case with the existing unit provision, in the context of regi onal and national electricity ma rkets, taking into account their interconnectedness.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 427 of 642 a. Cost-to-Revenue Analysis for Regulated Facilities and Their Parent Entities – Existing Unit Provision of the Final Rule EPA assessed the cost to regulated faciliti es and their parent entities on the basis of a cost-to-revenue analysis. For each analysis level (facility and parent entity), the Agency assumed, for analytic convenience and as a worst-case scenario, that none of the compliance costs would be passed on to cons umers through electricity rate increases and, instead, would be absorbed by regulated facilities and their parent entities. 129 EPA developed this analysis for 544 electric generators. 130
ai . Cost-to-Revenue Analysis for Regulated Facilities To provide insight into the potential significance of the compliance costs to regulated facilities, EPA calcu lated the ratio of annualized after-tax compliance costs to baseline annual facility-level revenues. In the cost-to-revenue comparisons, EPA used cost-to-revenue thresholds of 1 and 3 per cent to categorize facilities according the potential economic impact of the rule. EPA assessesconcludes that facilities incurring costs below 1 percent of revenue will not face significant economic impacts, while

129 As discussed in EA Chapter 2A: Industry Profiles, the majority of regulated electric generators operate in States with regulated electricity markets. EPA estimat es that facilities located in these States may be able to recover compliance cost-based increases in their production costs through incr eased electricity prices. This depends on the business operation model of th e facility owner(s), the ownership and operating structure of the facility itself, and the role of market mechanisms used to sell el ectricity. In contrast, in States where electric power generation has been deregu lated, cost recovery is less certain. While facilities operating within deregulated electricity markets may be able to recover some of their additional production costs through increased revenue, EPA cannot determine the extent of cost recovery ability for each facility. 130 EPA calculated this number as a weighted estimate using facility count-based weights. This number excludes facilities estimatedassumed either to have already retired their steam operations or expected to do so in the future.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 428 of 642 facilities with costs of at least 1 percent but less than 3 percent of revenue have a chance of facing economic impacts, withand facilities incurring costs of at least 3 percent of revenue have a higher probability of signifi cant economic impacts. For a more detailed discussion of the methodology EPA used for th e facility-level cost -to-revenue analysis, see EA Chapter 4. Exhibit IX-6 presents a summary of the facility-level cost-to-revenue analysis results for the final rule and other options considered. EPA estimates that overall, under the final rule, 8486 percent of regulated facilities w ill incur compliance costs of less than 1 percent of revenue. Under Proposal Option 4, 8587 percent of regulat ed facilities would also incur costs of less than 1 percent of revenue. EPA estim ates that Proposal Option 2 would result in 6242 percent of facilities incurring cost s exceeding 1 percent of revenue, and 4843 percent incurring costs exc eeding 3 percent of revenue.
Exhibit IX-6. Facility-level cost-to-revenue analysis results for the final rule and options considered a

Option Number of facilities with cost-to-revenue ratio < 1% ≥ 1% and < 3% ≥ 3% # % # % # % Proposal Option 4 46147 5 84.787. 4 % 4435 8.16.5 % 3731 6.85.7 %

Final Rule 45647 0 83.886. 5 % 4840 8.87.4 % 3731 6.85.7 % Proposal Option 2 20522 8 37.741. 9 % 7779 14. 25 % 2602 35 47.843. 2 %

a Facility counts exclude baseline closures.

b EIA reports no revenue for 1 facility (2 on a weighted basis). Therefore, EPA conducted this analysis for 321339 facilities (542 on a weighted basis). For more information on facility samp le weights see EA Appendix H.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 429 of 642 bii . Cost-to-Revenue Analysis fo r Regulated Parent Entities EPA also assessed the economic impact us ing the cost-to-revenue metric at the level of the parent entity. This analysis, wh ich focuses on domestic parent entities with the largest ownership share in the facility, pr ovides insight on the impact of compliance requirements on those entities that own more than one regulated f acility. The analysis helps to answer the question of wh ether owning multiple facilities that needare required to comply with today’s rule causes financial st ress at the entity level. For each identified parent entity, EPA aggregated facility-level , annualized , after-tax compliance costs to the level of the parent entity a nd compared these entity-level costs to entity-level revenue. Similarly to the facility-level analysis, EPA used cost-to-revenue thresholds of 1 and 3 percent to categorize faci lities according the potential economic impact of the rule. EPA used two weighting appro aches for this analysis: (1) using facility-level weights, but without entity-leve l weights and (2) using entity-level weights, but without facility-level weights. These approaches, which are desc ribed in Appendix H of the EA, provide a range of estimates for the number of enti ties incurring compliance costs and the costs incurred by any entity that ow ns a regulated facility. (For a more detailed discussion of the methodology used for the entity-level cost -to-revenue analysis, see EA Chapter 4). Exhibit IX-7 presents results for the en tity-level analysis for the two weighting schemesapproaches . EPA estimates that between 116123 and 159 entities own regulated facilities. Further, the Agency estimates that the majoritybetween 91 and 94 percent of parent entities will incur a nnualized costs of less than 1 percent of revenues under the final rule (between 91 and 94 percent).. This finding also holds under the two other*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 430 of 642 options EPA considered, with between 91 a nd 94 percent of entitie s incurring costs of less than 1 percent of revenue under Proposal Option 4 and between 6570 and 7578 percent under Proposal Option 2.

Exhibit IX-7. Entity-level cost-to-revenue analysis resultsresults b

Parent entity type Total number of entities Number of entities with cost-to-revenue ratio of < 1% ≥ 1% and < 3% ≥ 3% Unknown a # % # % # % # % Using Facility-Level Weights Proposal Option 4 116123 105112 90.591.1 % 3 2. 64 % 10 0. 90 % 78 6. 05 % Final Rule 116123 105112 90.591.1 % 3 2. 64 % 10 0. 90 % 78 6. 05 % Proposal Option 2 116123 7586 64.769.9 % 1817 15.513.8 % 1612 139 .8% 78 6. 05 % Using Entity-Level Weights Proposal Option 4 159 149150 93.794.2 % 20 1.30.0 % 0 0.0% 89 5. 08 %

Final Rule 159 149150 93.794.2 % 20 1.30.0 % 0 0.0% 89 5. 08 %

Proposal Option 2 159 119124 74.878.1 % 2218 13.811.6 % 97 5.74.4 % 89 5. 08 %

a EPA was unable to determine revenues for 78 parent entities ( 89 weighted).

b This analysis assumes no cost pass-through to electricity consumers.

2b . Potential Electricity Price Effects – Existing Unit Provision of the Final Rule As an additional measure of economic impact, EPA conducted two assessments of the potential price effects on electricity of today’s rule : (1) the annual increase in electricity costs per MWh (megawatt hour) of total electricity sales and (2) the potential annual increase in household electricity cost s. For analytic conve nience and as a worstcase scenario, the first analysis assumesthese assessments assume that all compliance costs will be passed through on a pre-tax basi s to consumers as increased electricity prices. This full cost pass-t hrough assumption represents a “worst-case” impact scenario*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 431 of 642 from the perspective of electri city consumers. Facilities th at are merchant providers can only pass along costs only to the degree that they are competitive with other generators in the dispatch process. 131 This assumption is the opposite of EPA’s assumption in the facility- and entity-level analyses discussed above—that facilities will pass none of the compliance costs through to consum ers in electricity rate increases. If facilities are able to pass through all costs, the impacts in the previous subs ection would not occur. The two conditions (no cost pass-through and full cost pass-through) could not occur at the same time. Thus, the results of the electricity pri ce-effects analyses disc ussed in this section, and of the facility- and entity-level analyses discussed in Section IX.D. ba .1, should not be combined . EPA conducted this analysis for 544 electric generators

. ai . Compliance Cost per Unit of Electricity Sales EPA assessed the potential increase in electricity rates by NERC region based on the annual cost of the regulatory options per un it of electricity sold. The Agency used two data inputs: (1) total pre- tax compliance cost by NERC region, and (2) estimated total electricity sales in the year 2020, to gauge the full effects of the rule. To calculate the total estimated annual cost in each NERC region, the Agency summed sample-weighted, pre-tax annualized complianc e costs over regulated fac ilities by region. EPA then calculated the approximate average price imp act per unit of electri city consumption by

131 As discussed earlier in Section X.D.b.1, even thou gh individual regulated facilities may not be able to recover all of their compliance costs through increased revenues, the market -level effect may still be that consumers will see higher overall electricity prices beca use of changes in the cost structure of electricity supply and resulting changes in market-clearing prices in deregulated electricity markets.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 432 of 642 dividing total compliance costs by the reporte d total MWh of sales in each NERC region. (Details of this analysis are presented in the EA, Chapter 4.) As reported in Exhibit IX-8, under the existing unitsunit provision of the final rule, annualized compliance costs (in cen ts per kWh sales) range from nearly zero ¢$0.00 in the WECC region to $ 0. 041 ¢040 in the HICC region. EPA reached the same findingfindings for Proposal Option 4. Under Propos al Option 2, costs range from nearly zero ¢$0.00 in the WECC region to $ 0. 349 ¢351 in the HICC region. On average, across the United States, the final rule and Proposal Option 4 result in a cost of $ 0. 011¢009 per kWh, while Proposal Option 2 results in a higher cost of $ 0. 172¢155 per kWh.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 433 of 642 Exhibit IX-8. Compliance cost per unit of electricity sales in 2020 by regulatory option and NERC region (2011 ¢/ KWh sales) a b NERC Region c,d Proposal Option 4 Final Rule Proposal Option 2 ASCC 0.000 0.000 0.000 FRCC 0. 015014 0. 015014 0. 176171 HICC 0. 041040 0. 041040 0. 349351 MRO 0. 013010 0. 013010 0. 194174 NPCC 0.008 0.008 0.126 RFC 0. 013011 0. 013011 0. 208200 SERC 0. 014013 0. 014013 0. 225219 SPP 0. 018009 0. 018009 0. 202078 TRE 0. 014008 0. 014008 0. 269206 WECC 0.000 0.000 0.000 United States 0. 011009 0. 011009 0. 172155

a This analysis assumes full pass-through of all compliance costs to electricity consumers.

b Cost values exclude baseline closures.

c ASCC – Alaska Systems Coordinating Council; FRCC – Florida Reliability Coordinating Council; HICC – Hawaii Coordinating Council; MRO – Midwest Reliability Organization; NPCC – Northeast Power Coordinating Council; RFC – ReliabilityFirst Corporation; SERC – Sout heastern Electric Reliabili ty Council; SPP – Southwes t Power Pool; TRE - Texas Reliability Entity, and WECC – Western Energy Coordinating Council.

d No explicitly analyzed facilities are in the ASCC region. For more information on explicitly and implicitly analyzed regulated facilities, see EA Appendix H.

bii . Cost to Households As an additional measure of the potential el ectricity price effects associated with the final rule, EPA estimated the potential annual increase in electricity costs per household and by NERC region. EPA used tota l annualized pre-tax compliance cost per MWh of sales, as estimated for the electricity rate impact analysis discussed above and the quantity of residential el ectricity sales per househol d as reported in the 2011 EIA database. To calculate the potential annual cost impact per household, EPA multiplied the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 434 of 642 average cost per kWh by the average kWh per household estimated for each NERC region. (Chapter 4 of the EA presen ts details of this analysis.) As presented in Exhibi t IX-9, under the existing unitsunit provision of the final rule, the average annual cost per reside ntial household varies across NERC regions, ranging from $0.01 in WECC to $2. 8582 in HICC. EPA reached the same findingfindings for Proposal Option 4. Under Proposal Option 2, the average annual cost per residential household al so varies across NERC regi ons, ranging from $0.01 in WECC to $ 39.9731.72 in TRESERC . EPA estimated that on average, for a typical U.S. household, the final rule will resultsresult in aan annual cost of $1. 2403 in higher electricity rates per household. EPA estimates th at this cost would be $1. 2403 per household under Proposal Option 4 and $ 19.1117.23 per household under Proposal Option 2.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 435 of 642 Exhibit IX-9. Average annual cost bu rden per residential household in 2020 for the final rule and options considered, and by NERC region (2011 dollars) a b NERC region c,d Proposal Option 4 Fina l Rule Proposal Option 2 ASCC $0.00 $0.00 $0.00 FRCC $1. 9791 $1. 9791 $23. 8515 HICC $2. 8582 $2. 8582 $24. 4561 MRO $ 1.350.99 $1. 3802 $ 20.2618.10 NPCC $0. 6261 $0.62 $9. 5352 RFC $1. 3210 $1. 3210 $ 21.5020.64 SERC $ 2.091.96 $ 2.091.96 $ 32.9731.72 SPP $ 2.511.30 $ 2.511.30 $ 27.5810.71 TRE $ 2.021.15 $ 2.021.15 $ 39.9730.59 WECC $0.01 $0.01 $0.01 United States $1. 2403 $1. 2403 $ 19.1117.23

a The rate impact analysis assumes full pass-through of all compliance costs to electricity consumers.

b

. Cost estimates exclude baseline closures.

c ASCC – Alaska Systems Coordinating Council; FRCC – Florida Reliability Coordinating Council; HICC – Hawaii Coordinating Council; MRO – Midwest Reliability Organization; NPCC – Northeast Power Coordinating Council; RFC – ReliabilityFirst Corporation; SERC – Southeastern Electric Reliability Council; SPP – Southwest Power Pool; TRE - Texas Reliability Entity, and WECC – Western Energy Coor dinating Council.

d No explicitly analyzed facilities are in the ASCC region. For more information on explicitly and implicitly analyzed regulated facilities, see EA Appendix H.
As noted above, this analysis assume s that facilities will pass through to consumers all compliance costs through increase d electricity rates. However, facilities and owningownerentities might not be able to recover all these costs through rate increases, thereby reducing the impact of t oday’s rule on electricity consumers. At the same time, EPA recognizes that electric ge nerators that operate as regulated public utilities will generally rec over environmental compliance co sts through rate increases to

consumers. cc. Barrier-to-Development Analysis – New Unit Provision of the Final Rule*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 436 of 642 EPA assessed the impact of the new unit pr ovision of the final rule on decisions of existing facilities to cons truct stand-alone new units that would be subject to the new unit provision. As discussed ear lier in this preamble, under th is provision, electric power generating units that meet the definition of a new unit will be required to achieve intake flow commensurate with closed-cycle coo ling. The question of potential impact of this provision on the construction of new stand-al one units is important because new standalone units will generally operate with higher energy efficiency and lower environmental impact than older electric generating capacity, which the new units would tend to displace as a source of electric power generati on. As such, EPA sought to ensure that the new unit provision would not impede c onstruction of stand-alone new units. For this analysis, EPA compared the compliance costs for new units to the overall cost of building and operating generating units, on a per MW basis. The purpose of this analysis is to determine whether the require d addition of a closed-cycle recirculating system (CCRS) as part of a new unit would substantially increase the cost for the new stand-alone unit, and adversely affect the decision to constr uct the new stand-alone unit. This analysis showed that given the low co st of CCRS in relation to the cost of new capacity, the CCRS requirement will not pose a barrier to development of new standalone units. EPA also assessed the costs associated w ith the new unit provision of the final rule as part of its electricity market anal ysis, as discussed in the following section (Section IX.D). This analysis tests the impact of the new unit requirements on electricity markets accounting for the expected number and timing of new unit installations, and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 437 of 642 provides additional insight on whether the cost s of complying with the new unit provision of the final rule would affect future capaci ty additions. This analysis found no material effect of the final rule’s new unit provisi on on the number and type of new units that would be constructed. This finding also s upports EPA’s conclusion that the new unit provision will not be a barrier to development of new capacity.

d . Impacts in the Context of Electricity Markets – Existing and New Unit Provisions of the Final Rule
In analyzing the 2011the analyses for the previous 316(b) regulations, including the proposed existing facilities rule (proposed rule),rule, EPA used the Integrated Planning Model (IPM®), 132 a comprehensive electricity market optimization model that assumes perfectly competitive wholesale electricity markets , to assess the proposed rule’s impactseconomic impact of regulatory options within the context of regional and national electricity markets. 133 To assess facility and market-level effects of the final rule, EPA used an updated version of this same anal ytic system, the Integrated Planning Model Version 4.10 MATS (IPM V4.10_MATS) platform. Use of a comprehensive, market analysis system is important in assessing the potential impact of the final rule because of the interdepende nce of electricity generating

132 Developed by ICF, Inc. 133 The IPM analysis, involves cash flow and present va lue concepts that are similar to the after-tax cash flow/business value analysis that EPA conducted for Manufacturers.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 438 of 642 units in supplying power to the electric tr ansmission grid. Increases in electricity production costs and potential reduct ions in electricity output at affectedregulated facilities – whether due to the temporary shutdown of existing electric generating units during technology installation and/or the energy production pena lties that can result from closed-cycle cooling – can have a range of broader market impacts that extend beyond the effect on regulated facilities and their di rect customers. In addition, the impact of compliance requirements on directly affectedregulated facilities may be seen differently when the analysis considers the impact on th ose facilities in the context of the broader electricity market instead of looking at the impact on a stand-alone, single-facility basis. For the analysis of the proposed rule , EPA used the IPM version 3.02 EISA platform (IPM V3.02). Since then, the EPA O ffice of Air and Radiation and ICF have updated the IPM platform in several ways; th ese include accounting for recently passed Clean Air Act regulations and changes in the universe of electricity power facilities and units. These updates are incorporated in the IPM version 4.10 MATS platform. In addition, since publicati on of the proposed rule, EPA conducted IPM analysis using the IPM V4.10 platform (summer 2011), which is a more current platform compared to the IPM V3.02 EISA platform us ed for the proposed rule and includes the Proposed Transport Rule and the Proposed Toxics Rule. Although EPA performed more recent analyses using the IPM V4.10 platform, the regulatory options considered in this analysis do not correspond as we ll to those of today’s rule as the analysis of Market Model Analysis Option 1 (Proposal Option 1) that EPA performed for the proposed rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 439 of 642 As a result, EPA concluded that it could not rely alone on the findings from the IPM V4.10 platform analyses for determinations for the final rule. Both the findings from the IPM analys is undertaken for proposal and the more recent IPM V4.10 platform analysis suggest very modest impacts from regulatory requirements that are similar to those of today’s rule. Given the findings of low impact from the IPM analysis performed at proposal and the similar findings from the summer 2011 analysis using IPM V4.10 platform, EPA assessed whether another IPM analysis, usi ng the IPM V4.10 MATS platform, i.e., the most current IPM platform at the time of an alysis, was warranted to evaluate the impacts of the final rule in the context of regional and national electricity markets or results for Proposal Option 1 were sufficien t to evaluate these impacts. In this assessment, EPA accounted for the time and resources required to conduct an IPM run. Key considerations in this assessment are as follows:

 First, EPA reviewed the impacts of Proposal Option 1 as estimated in the previous IPM analysis done using the IPM V3.02 EISA platform. This analysis found that Proposal Option 1 would have very little effect on the overall electricity market, in general, and the group of regulated facilities, in particular, at the national level and the NERC-region level.

 Second, given the finding of very limited impact of the proposed rule, EPA then asked whether new analyses for the final rule using the updated IPM V4.10 MATS platform would be expected to s how materially differe nt – specifically, higher – impacts than estimated for the proposed rule. EPA assessed that impacts*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 440 of 642 could differ for primarily two reasons – (1) differences in the requirements and cost of the final rule compared to Pro posal Option 1 and (2) differences in the IPM analytic platform – and focused its question on these considerations. EPA first compared the costs and operational im pacts of the final rule with those of Proposal Option 1. This comparison found that the final rule’s costs and impacts are likely to be substantially lower th an those estimated for the proposed rule. Second, EPA considered whether the change s in the IPM platfo rm would affect materially the findings from the previ ous analysis. In this assessment, EPA determined that any changes due to th e updated platform are not likely to be substantial and the direction of their effect is indeterminate. Based on this review, EPA concluded that a new analysis of the final rule using the updated IPM platform would very likely not find materially different impacts; indeed, a new analysis would most likely find smaller impacts that those estimated for the proposed rule. From this review, EPA concluded that new IPM analyses using the IPM V4.10 MATS platform for the final rule would yiel d no insights that woul d alter EPA’s decision on the final rule. As a result, given the time and resource requirements of conducting IPM runs, EPA decided not to undertake additiona l IPM analyses usi ng the IPM V4.10 MATS platform for the final rule. In the following discussion, EPA presents its findings from the IPM analysis undertaken for Proposal Option 1. EPA notes that those findings are likely to overstate the impact of the final rule – given, in partic ular, the final rule’s e xpected lower cost and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 441 of 642 operational impacts, and increased flexibility in terms of compliance schedule, compared to Proposal Option 1. For a deta iled discussion of this review, see EA Chapter 7. For a detailed discussion of the IPM analysis conducted for the proposed rule, see the Economic Analysis for the Economic and Bene fits Analysis for Proposed Section 316(b) Existing Facilities Rule report (EPA 821-R-11-003) proposed rule EBA. The Agency conducted two sets of analysis for the proposed rule:

 Steady-state impact: EPA looked at output from the analysis run-year 2028, which is the first year when all regul ated facilities would have achieved compliance under the three re gulatory options consider ed in development of the proposed existing facilities rule, to assess the regulator y effect during the steady-state period of pos t-compliance operations. 134 The Agency conducted this analysis for the group of regulated facilities and the electric power sector as a whole, including all electric power facilities supplying to the electric power grid.

 Downtime impact: EPA also looked at the results reported for the 2015 IPM run-year to assess the impact of technology inst allation downtime. 135 The Agency conducted this analysis for the electric power sector as a whole.

134 For the proposed rule analyses, the first year of full compliance was 2018 for Proposal Option 1 and 2028 for Proposal Option 2. To facilitate comparison of market-level impacts across options, the proposed rule analysis focused on 2028 as the steady-state comparison year. 135 For the Proposal Option 1 analysis, EPA estimated that regulated facilities would install impingement mortality control technologies, and experience downtime, during a 5-year window of 2013 through 2017. Results for the 2015 IPM run y ear are indicative of annual effects during those years.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 442 of 642 Both the steady-state and downtime impact analyses showed that Proposal Option 1 would have very small effects on the overa ll electricity market, in general, and the group of regulated facilities, in particular, at the national level and at the NERC-region level. Specifically, as reported in Exhibit IX -11, in looking at regulated facilities only, the analyses showed a very small impact on cap acity and electricity generation with total available capacity and electricity generati on falling by only 0.2 percent and 0.1 percent, respectively. Total electricity production cost s increased by 0.3 perc ent of the baseline value for the electric power sector as a whol e and for the regulated facilities – again, a modest amount – with no cost components experiencing large changes. The changes in other impact metrics were also very small. As reported in Exhibit IX-10, the downtim e-impact analysis showed that the estimated downtime effects of Proposal Opti on 1 would also be relatively minor. Total costs of electricity producti on increased by only 0.4 percent, with variable production costs per MWh increasing by 0.1 percent, whil e nearly no change in total revenue. EPA also found minimal impacts regionally in this analysis. As detailed in the proposed rule EBA, EPA estimated that none of the NE RC regions would experience substantial changes in the impact metr ics under Proposal Option 1. As shown in Exhibit IX-11, overall, EPA’s market-level analyses for the proposed rule found that Proposal Option 1 would haveThe IPM V4.10_MATS platform provides outputs for the NERC regions that lie within the continental United States. This IPM platform does not analyze electric power ope rations in Alaska and Hawaii because these operations are not connected to the contin ental U.S. power grid. The IPM V4.10_MATS*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 443 of 642 platform is based on an inventory of U.S. utility- and non-utility -owned boilers and generators that provide power to the integrat ed electric transmission grid, as recorded in the EIA 860 (2006) and EIA 767 (2005) databases. 136 IPM does not include electric power facilities that do not provide power to the U.S. power grid (e.g., some generating units at industrial facilities). Th e IPM V4.10_MATS universe consists of 14,920 generating units at 4,910 existing electric power facilities, including 520 of the 544 regulated electric power facilitie s subject to the final rule. 137 This IPM V4.10_MATS platform embeds a baseline energy demand forecast from the Department of Energy’s An nual Energy Outlook 2010 (AEO2010), with adjustments by EPA to account for the effect of certain voluntary energy efficiency programs. This platform also incorporates in its analytic baseline the expected compliance response to existing regulatory re quirements for the following promulgated air regulations affecting the power sector: the final Mercur y and Air Toxics Standards (MATS) rule; the final Cross-State Air Pollution Rule (CSAPR); 138 regulatory SO2

136 In some instances, facility information has been updated to reflect known material changes in a facility’s generating capacity since 2006. 137 Facilities excluded from the IPM analysis include th ree facilities in Hawaii and one facility in Alaska (i.e., areas that are outside the geographic scope of th e model), four on-site facilities that are not connected to the integrated electric transmission grid, four fac ilities excluded from the IPM baseline as the result of custom adjustments made by ICF, and 12 facilities that did not respond to the 316(b) survey. 138 EPA’s Cross-State Air Pollution Ru le (CSAPR) was promulgated to re place EPA’s Clean Air Interstate Rule (CAIR), which had been remanded to EPA in 2008. However, on December 30, 2011, the U.S. Court of Appeals for the D.C. Circuit stay ed CSAPR pending judici al review and left CAIR in place. On August 21, 2012 the Court issued an opinion vacating CSAPR and again leaving CAIR in place pending development of a valid replacement. On March 29, 2013, the United States filed a petition asking the Supreme Court to review the D.C. Circuit’s opinion. Nevertheless, as explained above, CAIR remains in effect at this time. In light of the continuing un certainty on CAIR and CSAPR, EPA determined it would*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 444 of 642 emission rates arising from State Implementatio n Plans (SIP); Title IV of the Clean Air Act Amendments; NOx SIP Call trading program; Clean Air Act Reasonable Available Control Technology requirements and Title IV unit specific rate limits for NOx; the Regional Greenhouse Gas Initiative; Renewa ble Portfolio Standards; New Source Review Settlements; and several state-level regulations affecting emissions of SO2, NOx, and mercury that are already in place or expected to come into force by 2017. In contrast to the screening-level anal yses described earlier, which are static analyses and do not account for interdependen ce of electric generating units in supplying power to the electric transmission gri d, IPM accounts for potential changes in the generation profile of individua l electric power facilities and consequent changes in market-level generation costs, as a result of the final rule. The model is dynamic in that the analysis covers a multiple-decade period with information and decisions in any specific period depending on the analysis in formation and optimization results for the entire analysis period. The model is also fo rward-looking in that it uses forecasts of future conditions to make decisions for the pr esent. Finally, in contrast to the screeninglevel analyses in which EPA assumed either no pass through of comp liance costs (facility and entity cost-to-revenue analyses discu ssed in Section IX.D.a.1) or full cost passthrough (analysis of potential electricity pr ice effects, Section IX.D.b.1), IPM assesses

not be appropriate or possible at this time to adjust emission projections on the basis of speculative alternative emission reduction requirements in 2020 . EPA expects that the d ecision vacating CSAPR and leaving CAIR in place has minimal effect on the results of the analysis conducted in support of the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 445 of 642 price and revenue effects from increased costs in competitive wholesale electricity markets, where some recovery of compliance costs through increased electricity prices is possible but not guaranteed. In performing analyses based on the IPM V4.10_MATS platform, EPA used as its baseline a projection of electricity markets a nd facility operations w ithout the final rule requirements (baseline case). As discussed above, this baseline accounts for compliance with the recently promulgated Federal air rule s. EPA then overlaid this baseline with the estimated compliance costs and other operating effects – downtime for installation of IM technologies at existing units a nd auxiliary energy requirement to operate cooling towers at new units – for regulated f acilities under the policy case. As discussed in Appendix P of the EA report, the IPM V4.10_MATS platform models the electric power market over the 43-year period from 2012 to 2054. Within this total analysis period, EPA looked at shorte r IPM analysis periods (run-year windows) 139
to assess the effect of the final rule on national and regional electricity markets. Specifically, to assess the impact of the final rule during the period when regulated facilities temporarily suspend their operation to install compliance technologies – the short-term effects analysis or the downtime ef fects analysis – EPA us ed results reported

139 Due to the highly data- and calculation-intensive computational procedures required for the IPM dynamic optimization algorithm, IPM is run only for a limited number of years. Run years are selected based on analytical requirements and the necessity to maintain a balanced choice of run years throughout the modeled time horizon. Each run year represents adjacent years in addition to the run year itself.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 446 of 642 for the 2020 IPM run year, which repres ent an 8-year window of 2017 through 2024. 140 The incurrence of downtime may lead to highe r electricity generati on costs overall, as generating units at regulated facilities are taken out of service to complete technology installation and other generating units, pres umably with higher production costs, are dispatched to meet electricity demand. Becau se of the potential resulting increase in electricity generation costs, it is importan t to examine market-level effects during the period in which downtime would occur. To assess the longer term effect of the fi nal rule on electricity markets during the period after compliance technology is installed at all regulated facilities – the steady-state post-compliance period – EPA analyzed resu lts reported for the IPM 2030 run year, which represents a 10-year window of 2025 through 2034. 141 Effects that may occur during this steady-state period include increased electricity production costs at regulated facilities and potential permanent losses in generating capacity from early retirement (closure) of generating units . Both effects may lead to higher overall electricity generation costs through not only the increased production cost in regulated facilities, but

140 As discussed earlier in this document, for the cost and economic impact analyses, EPA assumed that electric generators will install IM technologies during the 5-year win dow of 2018 thr ough 2022. Because this technology-installation window falls within the time period captured by the 2020 run year (i.e., 2017 through 2024), EPA judges that 2020 is an appropriat e year to capture the eff ects of technology-installation downtime. 141 EPA expects this steady-state period to begin in the last year of the technology-installation window, i.e., 2022, and continue into the future. The 2022 analysis year is captured in the IPM 2020 run year, as opposed to the 2030 run year. However, because all analysis years represented by the 2030 run year (i.e., 2025- 2034) fall outside the technology-installation window of 2018 through 2022, EPA judges that 2030 is an appropriate year to capture longer term, steady-state ef fects of the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 447 of 642 also through dispatch of highe r production cost units to offs et capacity losses, reflecting the general upward shif t in production costs. 142 EPA measured the impacts of the fina l rule as the difference between key economic and operational impact metrics betw een the baseline case and the policy case. All analysis results presented below are repr esentative of modeled market conditions in the years 2017-2034. While costs are in 2011 dolla rs, they are reflective of costs in the modeled years and are not discounted to th e start of EPA’s analysis period of 2013. 143 In contrast to the earlier statement that the cost and economic impact analysis findings presented in this preamble may be underestim ates because EPA assumed that no facilities with impoundments will inst all compliance technology, th e market-based analysis presented in this section refl ects the opposite assumption. Name ly, despite the final rule’s treatment of impoundments, for purposes of th is analysis, none of the facilities with impoundments are treated as havi ng closed-cycle cooling in th e baseline. As a result, to the extent that some of these facilities ma y qualify as having closed-cycle recirculating

142 In seeking to minimize the cost of meeting electri city demand, IPM will tend to shift production away from regulated facilities that incur compliance costs, and will shift production to either non-regulated facilities, which incur no compliance costs, or to re gulated facilities that incur relatively lower compliance costs. Any of these changes – whethe r a simple increase in production costs for previously dispatched units or changes in the profile of generating unit dispatch – mean increased total costs for electricity generation, compared to the pre-regulation baseline. 143 In contrast, the social cost estimated in Section IX .C reflects the discounted value of compliance costs over the entire 51-year analysis period, as of 2013. Additionally, screening-level analyses presented in earlier sections are static analyses and do not accoun t for interdependence of electric generating units in supplying power to the electric tran smission grid. In contrast, IPM accounts for potential changes in the generation profile of steam electric and other units and consequent changes in market-level generation costs, as the electric power market responds to highe r generation costs for steam electric units due to the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 448 of 642 systems in the baseline, and thus would not need to install compliance technology, the costs and economic impacts reported in this section may be overestimated.

i. Analysis Results for the Year 2030 – To Reflect Steady State, Post-Compliance Operations For the steady-state analysis (2030), EPA c onsidered impact metrics of interest at three levels of aggregation: (1) impact on national and regi onal electricity markets, (2) impact on the group of 520 regulated facili ties modeled in IPM, and (3) impact on individual 520 regul ated facilities. Impact on National and Regi onal Electricity Markets For the assessment of market-level impacts, EPA considered six output metrics: (1) incremental capacity retirements (closure s); (2) changes in capaci ty retirements as a percent of total baseline cap acity (3) changes in new capaci ty additions; (4) changes in variable production costs per MWh, calculated as the sum of total fuel and variable O&M costs divided by net generation; (5) changes in total genera tion costs (fuel, variable O&M, fixed O&M, and capital); and (6) ch anges in wholesale electricity prices. As shown in Exhibit IX-10, the final ru le has small effects on the electricity market, on both the national and regional sub-ma rket basis, in 2030. At the national level, the analysis shows a total net increase in re tired capacity of approximately 1 GW, or less than 0.1 percent of the total baseline capacity in 2030 (capacity retirements are discussed in greater detail in the next section, Impact on Regulated Facilities as a Group). This 1 GW of net capacity loss reflects a combinati on of closures and avoided closures of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 449 of 642 generating units. “Avoided closure” means a ge nerating unit that was projected to close in the baseline case but remains open in the po licy case because of changes in the relative operating economics of generating capacity. In some instances an avoided closure can result in an avoided full facility closure. Overall, the final rule will lead to early retirement of approximately 4 GW of gene rating capacity and approximately 3 GW of avoided closure of capacity otherwise projec ted to retire by 2030, resulting in a net closure of approximately 1 GW of genera ting capacity. With onl y one exception, these retirements involve older, less efficient genera ting units with very lo w capacity utilization

rates. Five of the eight analyzed NERC regions record modest in creases in retired capacity, with the largest increase, 0.8 percen t of baseline retired capacity, projected to occur in TRE. One NERC region – SPP – avoi ds capacity closures, where 1.5 percent of capacity otherwise projected to retire in the baseline, becomes a more economically viable source of electricity in the policy cas e due to changes in the relative economics of electricity production across the full market, and thus avoids closure. 144 Consequently, the final rule is not expected to have a ma terial ongoing effect on capacity availability and supply reliability at either th e national or the NERC region level. The 1 GW of retired capacity is repla ced by new, more efficient, and less polluting capacity. Because the new capacity is more efficient and less costly to run than

144 Avoided closures may occur among facilities that incur no compliance costs under the final rule or for which compliance costs are low relative to the costs estimated for other regulated facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 450 of 642 the retired capacity, it will r un at a higher capacity utiliza tion rate than the retired capacity; less new capacity is required to meet electricity demand than the retired capacity that it replaces. As shown in Exhi bit IX-11, under the fina l rule, new capacity additions increase by 1 GW at the national leve l; this increase repr esents 0.5 percent of new baseline capacity and 0.1 percent of total baseline capacity (see E xhibit IX-10). This increase in new capacity is mostly compri sed of combined cycle capacity followed by other non-steam capacity, with coal steam capac ity additions remaining zero in both the baseline case and the policy case. Consequently, this analysis shows that the final rule is not likely to impede construction of new combined cycle and coal steam generating units. 145 As reported in Exhibit IX-10, overall, the final rule has only a slight impact on electricity prices. EPA estimated thatFor three out of eight NERC regions, electricity prices would increasedecline slightly – by no more than $0.05 per MWh ( 0.1 percent during either) in TRE. Electricity prices increase in the steady-state impact period orremaining five NERC regions, with the downtime impact period. EPA assessed theselargest increase, $0.29 per MWh ( 0.4 percent), occurring in NPCC. These very

145 As described earlier in this preamble, under the new unit provision of the final rule, new units as defined at 125.92 include, stand- alone fossil fuel and combin ed cycle units. As described in Chapter 6 of the EA, the IPM analysis accounts only for compliance costs a ssociated with new units. Further, EPA assigned these costs only to coal steam and combined cycle capacity.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 451 of 642 small estimated changes in electricity prices asare essentially within the analytic “noise” of the IPMelectricity market modeling system. 146

Exhibit IX-10. Impact of final rule a on national markets At the national level, total generation co sts increase by 0.3 percent of the baseline value – again, a very modest amount. Across regions, no NERC region records an increase in total costs exceeding 0.5 percent. The change in variable production costs ($/MWh) – a specific measure of the effect of the final rule on short-run electricity generation costs – is nearly zero with no NERC region recording a consequential change.

Exhibit IX-10. Impact of the Final Rule on Na tional and Regional Markets, at the Year 2030

NERC Region a Total Baseline Capacity

(GW) Economic Measures (all dollar values in $2011) Net Changes in Early Retirements Electric Power Sector Changes in Variable Costs Regulated Facilities Changes in Total Costs

Value % Change Value

GW % of Total Baseline Capacity Policy $2011/MWh Difference % of Baseline Mill 2011$ % of Baseline

Impact During Steady-State Impact Period: 2028 FRCC Total Capacity (MW) 1,147,571 68 1,147,556 0 - 160.30% -$ 0. 0%03 479,054-0.10% 478,003$51 -1,0510.30%
Existing -597 -0.1% New Additions 581 0.1% Early Retirements – Full and Partial (MW) 601 0.1% 32,757 33,814 1,056 Number of Fully-Retired Regulated Facilities NA NA 39 45 6

Generation (GWh)MRO 4,894,596 76 4,894,626 0 29 0.00% $ 0. 0%01 2,750,4420.10% 2,746,772$62 - 3,6700.40% Revenue ($Millions) $325,391 $325,573 $182 0.1% $164,270 $164,103 -$167

146 IPM provided estimates of electricity prices effects for each NERC region. Inserted Inserted Split Cell s

Inserted

Split Cell s Inserted Inserted Split Cell s Deleted C

Inserted

Inserted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 452 of 642 Costs ($Millions) $194,107 $194,622 $516 0.3% $88,969 $89,251 $282 NPCC Variable Production Cost ($/MWh) $22.27 73 $22.27 0 0.50% $0.00 0. 000 % $ 19.1028 $19.080.20%

Impact DuringDowntimeImpact Period: 2015 (2013- 2017)RFC 237 0 0.10% $0.01 0.00% $157 0.30%

SERC Generation (GWh) 4,319,717274 4,319,5850 - 1310.10% $ 0. 0%02 0.10% $182 0.30% Revenue ($Millions) $219,872 $219,899 $27 0.0% Costs ($Millions) $148,964 $149,535 $571 0.4% Variable Production Cost ($/MWh)SPP $22.2659 $22.28- 1 $0.01 0.- 1 .50 % $0.02 0.10% $31 0.30%

TRE 98 1 0.80% -$0.01 0.00% $48 0.30% WECC 220 0 0.00% $0.00 0.00% $9 0.00%
Total 1,106 1 0.10% $0.00 0.00% $568 0.30%

a The Proposal Option 1 is similar to the final ru le, and thus, the IPM analysis done for that option IPM analysis for the final rule. a FRCC (Florida Reliability Coordinating Council), MRO (Midwest Reliability Organization), NPCC (N o Council), RFC (ReliabilityFirst Corporatio n), SERC (Southeastern Electricity Reliabili ty Council), SPP (Southwest Power Pool), TRE (Texas Relia b Electricity Coordinating Council)

Exhibit IX-11. Impact of Final Rule on electricity prices a,b Inserted

Inserted Inserted Inserted Inserted Inserted Inserted Inserted Inserted Deleted C Inserted Inserted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 453 of 642 NER

C Regio

n c Exhibit IX-11. Steady-State Impact: 2028 Impact of the Final Rule on New Capacity (GW), at the Year 2030 Downtime Impact: 2015

Capacity Type Bas eline Valu

e % Change Final Rule Value % Change

Base line Value Policy Difference % Cha nge Ba sel ine P oli cy Dif fer

en
ce

Coal Stea

m FR CC $6 5.6

6 $6 5. 65 - $ 0

. 0 1 0

. 0 % $68.95 $69.03

$ 0 .08 0.1%NA

Combined Cycle 7 5 76 1 0.8%

MROCombustion Turbine $ 5 3

. 8 8 6 $53.886 $ 0 .00 0

. 0 % $3 8. 92 $ 3 8. 9 4 $0 .0 3 0. 1 %

Hydro 0 0 0 NA Nuclear 0 0 0 NA O/G Steam 0 0 0 NA

NPCCOther Non-Steam a $ 7 6

. 9 7 $77.0625 $ 0 .09 0

. 1 % $6 7. 05 $ 6 7. 0 4 - $0 .0 1 0. 0 % Deleted C Deleted C

Merged C Merged C

Split Cell s Deleted C

Split Cell s Split Cell s Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 454 of 642 NER

C Regio

n c Exhibit IX-11. Steady-State Impact: 2028 Impact of the Final Rule on New Capacity (GW), at the Year 2030 Downtime Impact: 2015

Capacity Type Bas eline Valu

e % Change Final Rule Value % Change

Base line Value Policy Difference % Cha nge Ba sel ine P oli cy Dif fer

en
ce 2 5

RFCOther Steam b $ 5 4

. 9 9 9 $55.029 $ 0

. 0 3 0. 1 % $4 0. 51 $ 4 0. 5 1 $0 .0 0 0.0%

Total SERC $ 5 6

. 6 3 1 1 4 $ 5 6

. 6 2 1 1 5 -$0.01 0. 0 % $4 7.1

2 $ 4 7. 1 6 $0 .0 4

0. 1 % 0.5%

SPP $51.45 $5 1.4

5 - $0.01 0.0% $47.66 $47.70 $0.03 0.1%

TRE $61.62 $6 1.6

1 - $0.01 0.0% $60.35 $60.31 -$0.05 -0.1% Deleted C Deleted C

Merged C Merged C Split Cell s Deleted C

Split Cell s Split Cell s Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C

Deleted C Deleted C Deleted C Deleted C Deleted C Inserted*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 455 of 642 NER

C Regio

n c Exhibit IX-11. Steady-State Impact: 2028 Impact of the Final Rule on New Capacity (GW), at the Year 2030 Downtime Impact: 2015

Capacity Type Bas eline Valu

e % Change Final Rule Value % Change

Base line Value Policy Difference % Cha nge Ba sel ine P oli cy Dif fer

en
ce
WEC C $57.93 $5 7. 91 - $0.02 0.0% $54.34 $54.34 $0.00 0.0%

a The Proposal Option 1 IPM is similar to the final rule, and thus, the IPM analysis done for that option serves as a proxy for IPM analysis for the final rule. b IPM does not model two NERC regions: Alaska Systems Coordinating Council (ASCC) and Hawaii Coordinating Council (HICC).

c FRCC – Florida Reliability Coordinating Council; MRO – Midwest Reliability Organization; a Other non-steam capacity includes wind, solar, pumped storage, and fuel cell.

b Other steam capacity in cludes biomass, geo thermal, municipal solid waste, fossil waste, land fill gas, tires, and nonfossil waste. NPCC – Northeast Power Coordinating Council; RFC – ReliabilityFirst Corporation; SERC – Southeastern Electric Reliability Council; SPP – Southwest Power Pool; TRE - Texas Reliability Entity, and WECC – Western Energy Coordinating Council.

3Impact on Regulated F acilities as a Group EPA used the same IPM V4.10_MATS analysis results for 2030 as those used to assess market-level impacts desc ribed above; however, this an alysis considers the effect of the final rule only on regulat ed facilities modeled in IPM (i.e., 520 facilities). For this analysis, EPA considered four output metric s: (1) incremental cap acity closures; (2) Deleted C Deleted C

Merged C Merged C

Split Cell s Deleted C

Split Cell s Split Cell s Deleted C Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 456 of 642 changes in capacity closures as a percent of total baseline capacity; (3) changes in total generation; and (4) changes in va riable production costs per MWh. As shown in Exhibit IX-12, for the group of regulated facilities, the impact of the final rule is overall slightly greater than th at observed over all gene rating units in the IPM universe (i.e., market-level analysis discussed in the preceding section). This difference is due to the fact that in the electricity market as a whole, impacts on regulated facilities, which become less competitive compared to fa cilities that do not incur compliance costs, are offset by changes in capacity and ener gy production at the other electric power facilities. Nevertheless, the im pact on the group of regulated f acilities remains small. For instance, while there is essentially no change in total available capacity for the overall electricity market at the nationa l level, for the group of regulat ed facilities, total available capacity falls by only 0.4 percen t (2 GW). At the regional level, five NERC regions incur loss in total capacity, with th e largest percentage loss of 2.8 percent and the largest absolute loss of 0.9 GW occurring in the NPCC region. The 2 GW of capacity loss at regulated facilities reflects a combination of closures and avoided closures of generating units in the univ erse of regulated facilities. Some unit closures result in full facility closur es (i.e., all generating units at a facility close), while others result in only partial facility closures (i.e., some, but not all, generating units at a facility close). For avoi ded closures, a generating unit projected to close in the baseline case but remains ope n under the policy case, in some instances resulting in an avoided full f acility closure. Overall, 22 generating units close (4 GW) and 12 generating units avoid closure (2 GW) in the policy case, re sulting in net closure of 10*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 457 of 642 generating units (approximately 2 GW) in El ectricity Market Analysis - Final Rule analysis. The 22 generating unit cl osures reflect retirement of nine units at six full-closure facilities (2 GW) and retirement of 13 units at six partial-closure faci lities (2 GW). With only one exception, these retirements involve older, less efficient generating units with very low capacity utilization rates. At the national level, for the group of regulated facilities, total generation at regulated facilities declines by less than 2 GWh or approximately 0.1 percent of baseline generation in these facilities. The MRO and SERC regions record sl ight increases in generation essentially amounting to zero per cent of baseline generation at regulated facilities in these regions, with the remaini ng five NERC regions recording a reduction in electricity generation of no mo re than 0.4 percent in FRCC. Over all regulated facilities, there is esse ntially no change in variable production costs ($/MWh) at the national level, while at the NERC region level, the change does not exceed 0.2 percent for any of the regions. These findings of very small effects confirm EPA’s assessment that the assessed capacity closures among regulated facilities are of little economic consequence at both the national and regional levels.

Exhibit IX-12. Impact of Electricity Market Analys is Options on the Group of Regulated Facilities, at the Year 2030

NERC Region a Baseline Capacity

(MW) Net Change in Early Retirements / Closures Change in Generation Change in Variable Production Cost Capacity

(MW) % of Baseline GWh % of Baseline $2011/MWh % of Baseline FRCC 30,794 203 0.7% -527 -0.4% -$0.08 -0.2% MRO 31,747 0 0.0% 30 0.0% $0.01 0.1%*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 458 of 642 Exhibit IX-12. Impact of Electricity Market Analys is Options on the Group of Regulated Facilities, at the Year 2030

NERC Region a Baseline Capacity

(MW) Net Change in Early Retirements / Closures Change in Generation Change in Variable Production Cost Capacity

(MW) % of Baseline GWh % of Baseline $2011/MWh % of Baseline NPCC 30,977 855 2.8% -25 0.0% $0.00 0.0% RFC 126,905 223 0.2% -619 -0.1% $0.00 0.0% SERC 142,840 476 0.3% 3 0.0% $0.02 0.1% SPP 24,487 -530 -2.2% -411 -0.3% $0.01 0.0% TRE 38,378 808 2.1% -163 -0.1% -$0.02 -0.1% WECC 34,788 0 0.0% -8 0.0% $0.00 0.0% Total 460,917 2,035 0.4% -1,721 -0.1% $0.00 0.0%

a FRCC (Florida Reliability Coordinati ng Council), MRO (Midwest Reliabilit y Organization), NPCC (Northeast Power Coordination Coun cil), RFC (ReliabilityFirst Corporation), SERC (Southeastern Elec tricity Reliability Council), SPP (Southwest Power Pool), TRE (Texas Re liability Entity), and WECC (Western Electricity Coordinating Council)
Impact on Individual Regulated Facilities Results for the group of 520 regulated facilities as a whole may mask shifts in economic performance among individual facili ties incurring compliance costs under the final rule. To assess potential facility-leve l effects, EPA analyzed facility-specific changes between the baseline case and the final rule for the following metrics: (1) capacity utilization (defined as annual gene ration (in MWh) divided by [capacity (MW) times 8,760 hours]) (2) electricity generation, an d (3) variable production costs per MWh. Exhibit XI-13 presents the estimated number of regulated facilities with specific degrees of change in operations and financia l performance. Under the final rule, this analysis shows that most facilities experience only slight effects – i. e., no change or less*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 459 of 642 than a 1 percent reduction or 1 percent increase. Only six facilities are estimated to incur a reduction in capacity utilization and 13 facili ties a reduction in gene ration of at least 1 percent, with only five facilities estimate d to incur an increase in variable production costs per MWh of at least 1 percent. These f acilities represent approximately 1 percent of 520 regulated facilities analyzed in IPM.

Exhibit IX-13. Impact of the El ectricity Market Analysis - Final Rule on Individual Regulated Facilities at the Year 2030 (Number of Regu lated Facilities With Indicated Effect)

Economic Measures Reduction No Change Increase N/A b,c

 3%  1and <3% <1% <1%  1and <3%  3% Change in Capacity Utilization a 1 5 45 340 35 2 0 92 Change in Generation 9 4 37 345 29 2 2 92 Change in Variable Production Costs/MWh 2 1 70 86 242 4 1 114

a The change in capacity utilization is the difference between the capacity utilization percentages in the baseline and policy cases. For all other measures, the change is expressed as the percentage change between the baseline and post-compliance values.

b Facilities with status changes in either the baseli ne case or the policy case were excluded from these calculations. Specif ically, there are 17 full baseline facility closur es, 59 partial baseline fa cility closures, four avoided partial facility clos ures, six partial policy faci lity closures, and six partia l policy facility closures.

c The change in variable prod uction cost per MWh could not be develope d for 22 facilities with zero generation in either the baseline case or the policy case.
ii. Analysis Results for 2020 – To Capt ure the Effect of Technology-Installation Downtime This section presents market-level resu lts for the final rule for the 2020 IPM run year, which represents 2017 through 2024. As discussed above, this IPM run year captures the period when regulated faciliti es are expected to install compliance technologies under the final rule. Of partic ular importance as a potential impact, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 460 of 642 additional downtime from installation of co mpliance technologies could manifest as increased electricity production costs resu lting from the dispatch of higher-productioncost generating units during the period when units are taken offline to install compliance technologies. Because these effects are of mo st concern in terms of potential impact on national and regional electricity markets, this section presents results only for the overall electricity market and does not present results for the subs et of regulated facilities. As shown in Exhibit IX- 14, the estimated effects of technology-installation downtime under the final rule are small. At the national level, total production costs increase by 0.4 percent. At th e regional level, these cost s increase in all NERC regions, with MRO and SPP recording the la rgest increase of 0.6 percent. At the national level, variable production costs ($/MWh) increase by approximately 0.2 percent. While the effect on variable production costs varies across NERC regions, this effect is small overall, with the largest incr ease of less than 0.4 percent occurring in FRCC. While electricity prices increa se in all NERC regions, the magnitude of that increase is generally sm all, ranging from $0.15 per MWh (0.3 percent) in MRO and WECC to $0.56 per MWh (0.9 percent) in FRCC.

Exhibit IX-14. Short-Term Effect of Technology Installation Downtime on National Electricity Market Under the Final Rule – 2020

NERC Region a Change in Generation Change in Variable Production Cost Change in Total Costs Change in Electricity Price 2011$/ MWh % of Baseline 2011$/ MWh % of Baseline Million 2011$ % of Baseline 2011$/ MWh % of Baseline FRCC -108 0.0% $0.13 0.4% $51 0.5% $0.56 0.9% MRO 52 0.0% $0.03 0.2% $64 0.6% $0.15 0.3% NPCC -88 0.0% $0.05 0.2% $31 0.3% $0.18 0.3%*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 461 of 642 Exhibit IX-14. Short-Term Effect of Technology Installation Downtime on National Electricity Market Under the Final Rule – 2020

NERC Region a Change in Generation Change in Variable Production Cost Change in Total Costs Change in Electricity Price 2011$/ MWh % of Baseline 2011$/ MWh % of Baseline Million 2011$ % of Baseline 2011$/ MWh % of Baseline RFC 447 0.0% $0.03 0.1% $164 0.4% $0.19 0.4% SERC -369 0.0% $0.04 0.1% $185 0.4% $0.27 0.6% SPP -53 0.0% $0.08 0.3% $56 0.6% $0.18 0.4% TRE 0 0.0% $0.08 0.3% $64 0.5% $0.21 0.4% WECC 33 0.0% $0.04 0.2% $39 0.1% $0.15 0.3% Total -88 0.0% $0.05 0.2% $652 0.4% N/A

a FRCC (Florida Reliability Coordi nating Council), MRO (Midwest Reliability Organization), NPCC (Northeast Power Coordinati on Council), RFC (Reliabilit yFirst Corporation), SERC (Southeastern Electricity Reliability Council), SPP (Southwest Power Pool), TRE (T exas Reliability Entity ), and WECC (Western Electricity Coordinating Council)
EPA recognizes any capacity outa ges estimated to occur in conjunction with installation of compliance technologies at existing un its will require outage coordination by the system operator or other planning authority. Where possible, these outages would be scheduled in concurrence with normal scheduled maintenance outages. Permit authorities are provided flexibility to tailor compliance timelines. This flexibility will ensure that any adverse impact on local electric re liability as a result of this rule will be avoided. Facilities would r eceive workable construction schedules from permit writers that will allow schedule outages for installation without ad versely affecting electric supply reliability.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 462 of 642 2 . Manufacturers This section presents EPA’s estimated economic impacts on manufacturers for the final rule and the other options EPA consid ered. These analyses assess the impact of regulatory requirements on the financial performa nce of regulated facilities (facility-level analysis) and the entities that own them (entity-level analysis). Similarly to the electric generators analysis, for the manufacturers fa cility-level and entity-level analyses, the Agency assumed that facilities would pass none of their compliance costs forward to customers as price increases, i.e., all comp liance costs will be absorbed by regulated facilities and their parent ent ities. For details on the cost-p ass-through (CPT) analysis for information on this assumption, see the EA , Appendix K. EPA developed and used sample weights to extrapolate impacts assess ed initially at the level of a sample of facilities to the full population of regulated facilities. For information on the development and use of sample weights, see EA Appendix H. a. Facility-Level Impact Analysis for Manufacturers EPA conducted two separate facility-level analyses for manufacturers: (1) a standalonestand-alone cost-to-revenue screener analysis and (2) a facility closure and financial stress short of closure test. For th e cost-to revenue screener test, shown in Exhibit IX- 1215 , EPA divided the after-ta x, annualized compliance cost by facility-level revenue. Under the final rule, EPA found that of 569500 Primary Manufacturing Industry facilities, 556496 incur costs less than one percent of revenue, 13four incur costs between one and three percent, and none incur co sts greater than 3 percent. For the 10nine Other Industries facilities, EPA estimated that nineeight facilities would incur costs less than*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 463 of 642 one percent and one would in cur costs between one and three percent of revenue. For Proposal Option 4, all Primary Manuf acturing Industry facilities ( 569500 facilities) and Other Industry facilities ( 10nine facilities) incur costs less than one percent of revenue. Under Proposal Option 2, 556491 Primary Manufacturing Industr y facilities incur costs less than one percent and 13nine facilities incur costs betw een one and three percent, while nineseven Other Industry facilities incu r costs less than one percent and, one facility incurs costs between one and three percent , and one facility in curs costs greater than three percent

.
Exhibit IX- 1215 . Facility-level after-tax annual compliance costs as a percentage of cost-torevenue analysis results

Option Number of facilities with a cost-to-revenue ratio of a

<1% ≥ 1

and <3% ≥ 3%

Primary manufacturing industries

Proposal Option 4 569500 0 0

Final Rule 562496 74 0

Proposal Option 2 556491 139 0

Other industries

Proposal Option 4 109 0 0

Final Rule 98 1 0

Proposal Option 2 87 1 1*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 464 of 642 a. EPA conducted this analysis for 579 facilities in the Primary Manufacturing Industries and 10 facilities in the Other Industries. Note, these facility counts and analysis exclude facilities identified as baseline closures in the severe impact analysis, which is described below.
For the second analysis, EPA assessed how compliance costs would likely affect financial performance and condition of approximately 500the 509 manufacturers 147 using two measures: (1) facility closures (severe im pacts) and associated losses in revenue and employment, and (2) financial stress s hort of closure (moderate impacts). For the analysis of severe impacts, EP A identified a facility as a regulatory closure if it would have operated under base line conditions but would not be financially viable under the new re gulatory requirements and the costs of the final rule leading to that finding exceeded a threshold of 0.1 per cent of revenue. Specifically, the Agency examined the facility’s going-concern va lue before and after meeting regulatory requirements. EPA used a discounted cash flow framework in which after-tax cash flow is discounted at an estimated cost of capital to calculate the going concern value of the facility. 148 In conjunction with the discounted cas h flow analysis, EPA tested whether annualized costs exceeded 0.1 percent of re venue by dividing the after-tax, annualized total compliance cost by facility -level revenue. If this anal ysis found that the facility’s

147 This is a sample-weighted estimate of the number of Manufacturersmanufacturers , calculated using economic weights. This number excludes 70 facilities esti mated to be at substantial risk of financial failure regardless of any additional financial burden that might result from the final rule or other options considered in development of this rule. For details see EA Appendix H. 148 This after-tax cash flow analysis conducted for Manufacturersmanufacturers is similar in concept to the cash flow analysis conducted for Generatorselectric generators through the IPM analysis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 465 of 642 business value would become negative as a result of estimated compliance costs and the annualized cost of compliance exceeded 0.1 pe rcent of revenue, EPA classified the facility as a regulatory closure. For facilities estimated not to close under the severe-impact test, EPA conducted a moderate-impact test to assess whether any would experience fina ncial stress short of closure as the result of regulatory requirements . (e.g., higher costs of capital borrowing). EPA used two financial performance measures to test for occurrence of financial stress: (1) interest coverage ratio and (2) pre-tax return on assets. The Agency compared these measures before and after compliance with regulatory requirements against industryspecific performance thresholds for the two financial measures. For a facility, ifIf both

measures for a facility exceeded the threshold in the ba seline, and at least one measure fell below the threshold in the post-complian ce case, EPA counted this as a moderate impact based on the rule. Exhibit IX- 1316 presents the results from the severe-impact and moderate-impact analyses. EPA estimated that no facilities would be aat risk of closure as a result of the final rule and that 12 facilities wouldcould experience financial stress , short of closure. For Proposal Option 4, EPA also estimated no closures, while moderate impacts are significantly lower, estimated at two facili ties. Under Proposal Option 2, EPA estimated that one facility would be at risk of closure, while the financial stressmoderate impact finding is the same as for the final rule: 12 facilities. Again, this analysis is conducted assuming that all the costs are borne by th e facility and cannot be passed along, an assumption that is highly unlikely to be true, as many of these facili ties are in industries*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 466 of 642 where there is some market power and barriers to entry. Thus, these tests present worst case scenario results.

Exhibit IX- 1316 . Facility impacts and compliance costs for manufacturersmanufacturers d
Proposed Option 4 Final Rule Proposed Option 2

c 2 c Primary manufacturing industries a Number of Facilities Operating in Baseline 500 500 500 Number of Closures (Severe Impacts) 0 0 1 Percentage of Facilities Closing 0% 0% 0% Number of Facilities with Moderate Impacts 2 12 12 Percentage of Facilities with Moderate Impacts 1% 3% 3% Other industries b Number of Facilities Operating in Baseline 9 9 9 Number of Closures (Severe Impacts) 0 0 0 Percentage of Facilities Closing 0% 0% 0% Number of Facilities with Moderate Impacts 0 0 0 Percentage of Facilities with Moderate Impacts 0% 0% 0%

a Primary Manufacturing Industries includ e facilities in the Alumin um, Chemicals and Allied Pr oducts, Food and Kindred Products, Paper and Allied Products, Petr oleum Refining, and Steel industries.

b Other Industries include cooling water-dependent facilities in industries whose principal operations lie in businesses other than the electric power industry or the Primary Manufacturing Industries.

c

. Under Proposal Option 2, the percenta ge of facilities closing is 0.3 percent.

d The analysis assumes no cost pass through.

b. Entity-Level Impact Analysis EPA also examined the impact of regul atory requirements on entities that own complyingregulated manufacturers facilities. An entity that owns multiple facilities could be adversely affected because of the cumula tive burden of regulatory requirements the facilities face. For this analysis, a parent en tity is the domestic parent entity with the largest ownership share in a complyingregulated facility. For each identified parent*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 467 of 642 entity, EPA aggregated facility-level , annualized , after-tax compliance costs to the level of the parent entity and compared these entity-level costs to entity-level revenue. Similarly to electric generators, EPA used co st-to-revenue thresholds of 1 and 3 percent as thresholds for categoriz ing levels of impacts. EPA considered two cases, based on two sets of entity-level weights (see the EA, Appendix H for details on developm ent of entity-level weights).. These cases, which are described in the EA, Appendix H, provide a ra nge of estimates for the number of entities incurring compliance costs and the co sts incurred by any entity owning a complyingregulated facility. EPA conducted this analys is for 509 facilities in the primary manufacturing industries and 12 facilities in other industries. 149 For information on the methodology used for the entity-level cost-to-revenue analysis, see the EA, Chapter 5. Exhibit IX- 1417 presents the results from the entity-level analysis for these two cases. EPA estimated that betw een 120 and 337 entities own 521 complyingregulated facilities. Under the final rule, the majoritybetween 90 and 95 percent of all entities are estimated to incur compliance costs of less than 1 percent of revenue (between 90 and 95 percent of all entities).. This is true also for Proposal Option 2. Under Proposal Option 4,

even more entities are also expected to incur compliance co sts of less than 1 percent of revenue (between 94 and 96 pe rcent of all entities).

149 This is a sample-weighted estimate of the number of manufacturer facilities, calculated using technical weights. This number excludes 67 facilities estimated to be at substantial risk of closure regardless of any additional financial burden that might result from the regulatory options under consideration.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 468 of 642 Exhibit IX- 1417 . Entity-level after-tax annual compliance costs as a percentage of cost-to- revenue analysis results

Option Not analyzed due to lack of revenue

information Number of entities with a cost-to-revenue ratio of

< 1% ≥ 1 % and < 3% ≥ 3%

# % # % # % # % Primary Manufacturing Industries
Case 1: Lower bound estimate of number of entities that own complyingregulated facilities; upper bou nd estimate of total compliance costs that an entity may incur b

Proposal Option 4 5 4% 113 94% 2 2% 0 0%

Final Rule 5 4% 108 90% 6 5% 1 1%

Proposal Option 2 5 4% 108 90% 6 5% 1 1%

Case 2: Upper bound estimate of number of entities that own complyingregulated facilities; lower bou nd estimate of total compliance costs that an entity may incur c

Proposal Option 4 12 4% 324 96% 1 0% a 0 0%

Final Rule 12 4% 319 95% 6 2% 0 0%

Proposal Option 2 12 4% 319 95% 6 2% 0 0%
a. The percentage of entities with impacts greater than or equal to 1 percent and less than 3 percent is less than 0.5 percent b. The total number of entities under Case 1 is 120. c. The total number of entities under Case 2 is 337.

E. Employment Effects To consider employment effects at the na tional level, EPA looked at the potential effects of the final rule and other options considered in de velopment of this rule. This analysis considers the employment effects of meeting compliance requirements in the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 469 of 642 directly regulated industry sectors. EPA relied on a study conducted by Morgenstern, Pizer, and Shih that explores the theore tical and empirical re lationships between employment and compliance cost s of environmental regulation. 150 Morgenstern et al. identified and accounted for three factors affec ting employment in a re gulated industry in response to a regulation. First, complying with environmental re gulations increases production costs, which raises market pri ces. Higher prices reduce consumption (and production), which, in turn, reduce demand for labor in the regulated industry (demand effect). Second, as the basis for costs to produce the same output increase, plants add some combination of more capita l and labor to comply with the regulation. For example, pollution abatement activities require additiona l labor services to produce the same level of output (cost effect). Third, post-regulati on production technologies might be more or less labor intensive (i.e., more/less labor is required per dollar of output) (factor-shift effect). The demand effect factor is un ambiguously negative, the cost effect is unambiguously positive, and the factor-shift effect could be positive or negative. The overall employment impact of any given regulation, therefore, is theoretically indeterminate. Morgenstern et al. estimated a m odel based on data for four highly polluting/regulated industries—pul p and paper, plastic materi al, petroleum, and steel—to

150 For details on this study see Morgenstern, Richar d D. & Pizer, William A. & Shih, Jhih-Shyang, 2002. "Jobs Versus the Environment: An Industry-Level Perspective," Journal of Environmental Economics and Management, Elsevier, vol. 43(3), pages 412-436, May.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 470 of 642 examine regulations’ effect on employment. Th is model generates a net change in the number of jobs per each additional $1 milli on in annual pollution-abatement spending (in 1987 dollars) for each of the four analyzed indu stries and as an av erage across all four industries. The Morgenstern et al. study result s do not cover all the industries subject to today’s final rule. Morgenster n et al. did not estimate co efficients for the electric generating industry, and did estimate coe fficients for three of the six primary manufacturing industries: the paper and al lied products, petroleum refining, and steel sectors. For the industries not covered, EPA would only be ab le to use the average total effect coefficient of 1.55 jobs per $1 million ($1987). For the specific industries covered, EPA would be able to use the industry-s pecific coefficients (-1.13, 2.17, and 0.53 jobs per $1 million [$1987], respectively, for paper and allied products, petroleum refining, and steel sectors) to directly assess employ ment effects in these sectors. If EPA had applied these coefficients to the sector-speci fic compliance costs of today’s rule, the job effects in some industries would be positive, while in others the job effects would be statistically insignificant or ne gative. Given the uncertainty associated with applying the results for a limited set of industries that did not include the el ectric power generation sector, EPA has decided not to use the Mo rganstern, Pizer and Shih results in a quantitative analysis. EPA has therefore determ ined that the employment effects of this rule are not likely to be very substantial. To study employment effects of this rule, EPA considered the pot ential effects of the final rule, focusing on the impacts of mee ting compliance requirements in the directly regulated industry sectors: the Electric Power Industry, and selected Primary*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 471 of 642 Manufacturing Industries, in cluding Aluminum, Chemicals and Allied Products, Food and Kindred Products, Paper and Allied Products, Petroleum Refining, and Steel Manufacturing. When the economy is at full employment, an environmental regulation is unlikely to have much impact on net overall U.S. em ployment; instead, labor would primarily be shifted from one sector to another. These shifts in employment impose an opportunity cost on society, approximated by the wages of the employees, as regulation diverts workers from other activities in the econom y. In this situation, any effects on net employment are likely to be transitory as workers change jobs (e.g., some workers may need to be retrained or requi re time to search for new jobs, while shortages in some sectors or regions could bid up wages to attract workers). On the other hand, if a regulation come s into effect during a period of high unemployment, a change in labor demand due to regulation may affect net overall U.S. employment because the labor market is not in equilibrium. Schmalansee and Stavins 151 point out that net positive em ployment effects are possible in the near term when the economy is at less than full employment due to the potential hiring of idle labor resources by the regulated sector to meet new require ments (e.g., to install new equipment) and new economic activity in sectors related to the regulated sector. In th e longer run, the net

151 Schmalansee, Richard, and Robert N. Stavins. “A Guide to Economic and Policy Analysis of EPA’s Transport Rule.” White paper commissioned by Exelon Corporation, March 2011 (Docket EPA-HQOAR-2011-0135-0054)

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 472 of 642 effect on employment is more difficult to pr edict and will depend on the way in which the related industries res pond to the regulatory requirements. As Schmalansee and Stavins note, the magnitude of the effect on employme nt could vary over time, region, and sector, and positive effects on employment in some regions or sectors could be offset by negative effects in other regions or sectors. For this reason, they urge caution in reporting partial employment effects because it can “p aint an inaccurate picture of net employment impacts if not placed in the broader economic context.” In that spirit, unlike the analysis for th e proposed rule, for the final rule EPA is not estimating quantitative employment impact s and instead, includi ng only a qualitative discussion. The methods used at proposal we re not sufficiently robust, largely because they relied on an input-output analysis th at assumed fixed produc tion relationships and used historical data to estimate the labor and other inputs required for compliance with the rule. Since publication of the proposed rule, EPA has concluded that input-output analysis is inappropriate for assessing employ ment impacts of national-level regulations. Input-output models are static, do not include prices, and assume the supply of all inputs is inexhaustible. They do not model a wide variety of adjustments that are expected to occur over time, such as changes in production processes, technology or trade patterns. 152 After reviewing the public comments EPA receive d on the proposed rule, the Agency concludes that the commenters have not identified any specific improvements to the

152 For a discussion of input-output models see Chapter 8 of the EPA Handbook on the Benefits, Costs, and Impacts of Land Cleanup and Reuse (2011).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 473 of 642 employment analysis of the proposed rule. Thus, today’s final rule EA includes a qualitative discussion highlighting the variety of potential adjustments in the labor market that may follow the rulemaking.

To elaborate on the difficulty of de riving high quality estimates of how environmental regulations will impact net employment, the task requires consideration of labor demand in both the regulated and environm ental protection sector s, as well as labor supply more generally. Economic theory predicts that the net effect of an environmental regulation on labor demand in regulated sectors could be positive or negative; the direction of the outcome depends on the magn itude of output and substitution effects, explained further in the EA. Peer-reviewed econometric studies that use a structural approach, applicable to overall net effects in the regulated sectors, indicate that such effects, whether positive or negative, have b een small and have not affected employment in the national economy in a significant way (Berman and Bui 2001, Morgenstern, Pizer and Shih 2002). Effects on labor demand in the environmental protection sector seem likely to be positive. In aggregate, the environmental protec tion sector is likel y to experience a temporary increase in jobs cr eated as more compliance tec hnology systems are designed, manufactured, and installed attr ibutable to the final rule. In addition, because of regional variation in consumption patte rns and the presence of regulat ed facilities and supporting industries, short- and long-run employment effects likely will vary across the United States. It is possible that positive net employme nt effects will occur in the near term due*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 474 of 642 to the hiring of idle labor resources by th e regulated sectors to plan for and meet new technology control requirements rather than diverting workers from other productive employment. However, it is also possible that in the long run, as the economy returns to full employment, any changes in employment in the regulated sectors due to the final rule will be offset by employment changes in other sectors. These dynamics compound the uncertainty in estimating employment effects for a substantial number of years into the future. Even if regulated facilities are able to reduce the impact of regulatory requirements by changing their production pr ocesses in the post-rule environment, production costs may still be higher compared to those before the rule. As a result, regulated facilities may seek to increase th eir product prices in response to the higher production costs. For example, attempts by el ectric generators to recover increases in electricity generation costs, however small, are li kely to result in high er electricity rates. The impact of this increase will vary by region, customer group (e.g., industrial, commercial, transportation, and residen tial), and by industry, depending on the electricity-use intensity. 153 Further, the extent to which el ectric generators are able to pass their costs to consumers through higher electricity ra tes, will vary by region. Specifically, electric generators operating in regions wher e electricity prices remain regulated under

153 See the EA Chapter 6: Electricity Market Analysis for assessment of the impacts of increased production costs on wholesal e electricity prices and Chapter 4: Economic Impact Analysis – Electric Generators for analyses of the impacts on retail rates by customer group.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 475 of 642 the traditional cost-of-service rate regul ation framework may be able to recover compliance cost-based increases in increased rates. 154 However, cost recovery is less certain for electric generators operating in States where electric power generation has been deregulated, and will depend on the competitive circumstances of specifically affected facilities. Overall, the long-run changes in empl oyment will likely depend on how the electric power industry, primar y manufacturing industries, and other industries adjust in response to the new regulato ry requirements, and on the upstream and downstream effects of those adjustments on the rest of th e economy, as well as the overall state of the economy and labor markets. The long-run employ ment effects in the directly affected sectors will depend on a number of economic factors. These factors include changes in labor requirements to operate the infrastruc ture in general and compliance technology in particular at regulated facil ities, the potential to change production processes to become less dependent on cooling wate r, availability of alternative technologies to meet compliance requirements, and changes in demand for the outputs of the directly affected sectors. Because these and ma ny other interrelated factors include data and methodology limitations, it is difficult to fully assess th e employment impacts of the final rule.

154 However, even for electric generators operating unde r traditional rate regulation, the recovery of cost increases through increased rates is not certain, and w ill depend on additional factors such as the facility ownership structure and operating model, approval of public utility commissions, and the importance and role of market mechanisms in dispatching production of electricity across generating units. See Chapter 2A of the EA for additional discussion.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 476 of 642 However, based on the available evidence from several peer-reviewed econometric studies mentioned above that are applicable to net effects in the regulated s ectors and that closed-cycle recirculating systems was rej ected as national BTA for entrainment, EPA expects that employment impacts of today’ s rule are not likely to be substantial. X. Benefits Analysis A. Introduction This section presents EPA’s estimates of the national environmental benefits of the final existing facilities rule and other options considered by EPA. This section describes how EPA calculated values fo r those benefits it could monetize. EPA did not rely on the results of its stat ed preference survey in estima ting the benefits of today’s rule. It also presents descriptive information for those benefits for which EPA could not develop a monetary value. The benefits EP A assessed occur because of reductions in impingement and entrainment at cooling wa ter intake structures affected by the rulemaking and changes in greenhouse gas emi ssions at regulated f acilities. Impingement occurs where fish and other aquatic life are trapped on equipment as they enter the cooling water intake structure. Entrainmen t occurs where aquatic organisms, including eggs and larvae, are drawn into the cooli ng system, passed through the heat exchanger, and discharged back into the source water bodywaterbody . Impingement and entrainment kill or injure large numbers of aquatic organisms across all life stages. On the basis of entrainment data presented in facility studies, EPA assumes a mortality rate of 100 percent for entrained indivi duals. Mortality is then reduced on the basis of the efficiency of technology in place in reducing mortality rates, or by reducing levels of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 477 of 642 impingement and entrainment. 155 By reducing impingement mortality and entrainment, the final existing facilities rule is likely to increase the numbe r of fish, shellfish, and other aquatic organisms in affected water bodies re sulting in healthier aquatic environments. In turn, this healthier aquatic environment directly improves welfare for individuals using the affected aquatic resources, generating use be nefits such as increases in the value of recreational and commercial fisheries or in creases in property values. Reductions in impingement mortality and entrainment also improve welfare for individuals without use of the affected resources, generating nonuse benefits, su ch as improved ecosystem function and resource bequest values. Secti on D provides an overview of the types and sources of benefits EPA anticipated, how EPA estimated these benefits are estimated , and the level of benefits that the final rule a nd other options EPA considered for the rule would achieve. EPA derived national benefit estim ates for the final rule and other options considered options from a series of regional st udies representing a range of water bodywaterbody types and aquatic resources. Secti on B provides detail on the regional study design. Section C describes the impingeme nt and entrainment effects and Section D presents the national benefits estimates. The methodologies used to estimate bene fits are largely built on those used to estimate benefits for the remanded Phase II and Phase III and the proposed existing

155 See the discussion in Section III on entrainment mortality data and assumptions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 478 of 642 facilities rules. In addition to updating these analyses, EPA more fully investigated the effects of impingement mortalit y and entrainment on T&E species, incorporated benefits from greenhouse gas reductions, and improved its estimation of nonuse benefits. The Benefits Analysis document for the final existing facilities rule (referred to as the BA) provides detailed descriptions of the new methodologies EPA used to analyze the benefits of regulatory options, and provi des references to (i) Part A of the 2004 Regional Benefits Analysis for the Final Section 316(b) Phase II Rule, and (ii) Part A of the 2006 Regional Benefits Analysis Document for the Final Section 316(b) Phase II I Existing Facilities Rule for analyses using similar methodologies. The BA provides EPA’s benefit estimate s for the final rule and considered options. EPA relied on information collected in the 2000 Sectionsection 316(b) Industry Surveysindustry surveys (the Industry Screener Ques tionnaire (SQ) and the Detailed Industry Questionnaire (DQ)) on cooling water systems and intake structures already in place to estimate the number of regulated faci lities under regulatory options considered for the final existing facilities rule. For the analysis of complyingregulated electric generators, EPA used information from 656 complyingregulated electric generating facilities that responded to the Sectionsection 316(b) Surveysindustry surveys on cooling water systems and intake structures already in place. Because the DQs were sent to a sample of the manufacturing industries that use cooling water, the respondents were assigned sample weights designed to represen t other facilities in other manufacturing industries that were not c overed in the survey. All complyingregulated facilities have a DIF of at least 2 mgd. EPA estimated regional benefits from the sample of facilities for*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 479 of 642 which EPA has sufficient DQ information to estimate the environmental impacts of regulatory options. The environmental impact s from the set of explicitly analyzed facilities were then extrapolated to the unive rse of facilities in a region using statistical weights developed for this analysis. National benefits are estimated as the sum of the regional benefits. As described above at Section IX, the fi ndings presented in th is section assume that all facilities with im poundments will qualify as having closed-cycle recirculating systems in the baseline. For purposes of th is analysis, EPA did not estimate IM&E reductions for these facilities under the final rule and other options considered; however, these facilities remain subject to today’s rule and are assi gned administrative costs. To the extent that some of these facilities do not qualify as having closed-cycle cycle recirculating systems in the baseline, the mone tized benefits reported in this section may be underestimated. EPA notes that the vast majo rity of these facilities occur in the Inland benefits region. Any underestimation in mone tized benefits due to the treatment of facilities with impoundments is likely to be minor because commercial fishing benefits and nonuse benefits are not esti mated for the Inland region. B. Regional Study Design EPA evaluated the benefits of t oday’s rule in seven study regions. 156 Regions were defined on the basis of ecological similari ties within regions (e.g., freshwater versus

156 Benefits associated with changes in greenhouse gas emissions were estimated for the nation as as whole.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 480 of 642 marine, similar communities of aquatic species), and on characteristics of commercial and recreational fishing activities. The seven study regions are: California, 157 North Atlantic, Mid Atlantic, South Atlantic, Gulf of Mexico, Great Lakes, and Inland. The five coastal regions EPA identified (California, No rth Atlantic, Mid-Atla ntic, South Atlantic, and Gulf of Mexico) correspond to those of the National Oceanic and Atmospheric Administration’s National Marine Fisheries Service. The Great Lakes region includes Lake Ontario, Lake Erie, Lake Huron (incl uding Lake St. Clair), Lake Michigan, Lake Superior, and the connecting channels (Saint Mary’s River, Saint Clair River, Detroit River, Niagara River, and Saint Lawrence Rive r to the Canadian border) as defined in 33 U.S.C. 1268, Sec. 118(a)(3)(b). The Inland regi on includes all remain ing facilities that withdraw water from freshwater lakes, rivers, and reservoirs (, including inland facilities in coastal states ).. Notably, of the 435 facilities that are on freshwater streams or rivers, 30 percent (132) have average actual intake fl ow that is greater than 5 percent of the mean annual flow of the source waters, whic h is a significant amount of the source water flow. During periods of low river flow, or during periods of higher than average withdrawals of cooling water, the proportiona te withdrawal of s ource waters could be much higher. Thus, the potential for adverse environmental impacts could increase dramatically during these periods. The number and total operational intake flow of all 316(b) facilities by study region ar e presented in Exhibit X-1.

157 The California region includes facilities in State of California and four facilities in Hawaii. No coastal facilities are in Oregon, and one facility in Wash ington is classified as a baseline closure.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 481 of 642 Exhibit X-1. Number of surveyed facilities and total mean operational flow ),, by region,

Region Number of Surveyed Facilities a Flow (billions of gallons per day) Non-Recirculating Facilities b Recirculating Facilities Total Flow

California c 21 10.65 0.00 10.65 Great Lakes 50 16.24 0.24 16.47 Inland d 566 121.82107.56 3.8018.06 125.62 Mid-Atlantic 46 24.69 0.07 24.76 Gulf of Mexico 22 10. 1814 0. 0005 10.18 North Atlantic 21 5.93 0.00 5.93 South Atlantic 12 5.91 0.05 5.96 All Regions 738 195.42181.12 4.1618.46 199.58

a This table presents unweighte d facility counts and flow for surveyed facilities (e xcluding baseline closures). The regional study design for the benefits analysis uses weights based on flow rather than facility counts. EPA did not developeddevelop weighted facility counts by benefits region. The “All Regions” total of 738 surveyed facilities includes 532 electric generating facilities and 206 manufacturing fac ilities, excluding baseline closures. The total (weighted) estimated universe of facilities, excluding baseline closures, is 1,065 facilities.

bb Recirculating facilities are facilities with closed-cycle co oling or impound ments that qualify as closed-cycle cooling. Non-recirculating facilities includesinclude facilities with CWIS cl assified as once-through , combination, or “other.” Recirculating facilities are fac ilities with closed- cycle cooling..

c The California region includes four fa cilities in Hawaii. There ar e no coastal facilities in Oregon and the one coastal facility in Washington is classified as a baseline closure.

d A facility in Texas has intakes in both the Inland and Gulf of Mexico regions. It is included in the Inland region in the table to prevent the double counting of facilities.
EPA obtained estimates of regional impi ngement mortality and entrainment by extrapolating impingement morta lity and entrainment observed at 9798 facilities with impingement and entrainment studies (model f acilities) to all regulat ed facilities in the same region. EPA used regional estimates to more accurately estimate impacts by accounting for differences in ecosystems, aquatic species, and characteristics of commercial and recreational fishing activit ies across regions. Extrapolation was conducted on the basis of AIF reported for the period 1996–1998 by fac ilities in response*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 482 of 642 to EPA’s Section 316(b) Detailed Questionn aire and Short Technical Questionnaire. Chapter 3 of the BA provides details of the ex trapolation procedure. Because the goal of the analysis was to provide estimates of impingement mortality and entrainment at regional and national scales, EPA recognizes that these averages may not reflect the substantial variability at individual facilities. In sp ite of this variability, EPA determined that this extrapolation is a reasonable basi s for developing estimates of regional- and national-level benefits for the purposes of the final existing facilities rule. C. Physical Impacts of Imping ement Mortality and Entrainment EPA based the benefits analysis on facility-provided impingement mortality and entrainment monitoring data. Facility data c onsist of records of impinged and entrained organisms sampled at intake structures and in clude organisms of all ages and life stages. Sampling protocols were not standardized across facilities. Facility protocols differed in sampling methods and equipment used, the number of samples taken, sampling duration, and the unit of time and volume of intake fl ow used to express impingement mortality and entrainment. To standardize estimates across facilities, EPA converted sampling counts into annual impingement mortality a nd entrainment. Using standard fishery modeling techniques, 158 EPA constructed models that combined facility-derived

158 Ricker, W.E. 1975. Computation and interpretation of biological statistics of fish populations. Fisheries Research Board of Canada, Bulletin 191; Hilborn, R. and C.J. Walters. 1992. Quantitative Fisheries Stock Assessment, Choice, Dynamics and Uncertainty. Chapman and Hall, London and New York; Quinn, T.J., II. and R.B. Deriso. 1999. Quantitative Fish Dynamics . Oxford University Pre ss, Oxford and New York; Dixon, D.A. 1999. Catalog of Assessment Methods fo r Evaluating the Effects of Power Plant Operations on Aquatic Communities. Electric Power Research In stitute (EPRI) Final Repo rt. Report number TR112013.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 483 of 642 impingement mortality and entrainment counts w ith life history data from the scientific literature to derive annual estimates of the following:

 Individuals – the number of individual organisms impinged and entrained by facility intakes. Under this metric, eggs , larvae, juvenile, and adult organisms are counted as equiva lent individuals.

 A1Es (age-one equivalent losses)—the number of individual organisms of different ages impinged and entrained by facility intakes, standardized to equivalent numbers of 1-year-old fish. A conversion rate between all life history stages and age 1 is calculated using speci es-specific survival tables based on life history schedule and age-specific mortality rates. An individual younger than age 1 is a fraction of an age-one equivalent; an individual ol der than age 1 represents more than one age-one equivalent. EP A finds it appropriate to use the A1E measure because information in the r ecord indicates that an overwhelming majority of eggs, larvae a nd juveniles do not survive into adulthood and the A1E calculations adjust for differences in survivorship based on species and agespecific mortality rates. EPA recognizes that using A1Es simplifies a complex ecological situation, because some of the smaller fish would provide an ecological benefit to other species as food even if they would not survive to adulthood. Recognizing this as one nonmonetized benefit in the analysis, using an A1E approach is the most reasonable approach available because to date, there is insufficient data to account for the extent to which organisms that do not survive*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 484 of 642 to adulthood provide a benefit to ot her organisms which can be reliably monetized.

 Forgone fishery yield—pounds of commerc ial fish harvest and numbers of recreational fish and shellfish that ar e not harvested because of impingement mortality and entrainment. EPA used the Thompson-Bell equilibrium yield model 159 to convert impingement mortality and entrainment to forgone fishery yield, assuming that (1) impingement mo rtality and entrainment reduces the future yield of harvested adults, and (2) reductions in impingement mortality and entrainment rates will lead to an increase in harvested biomass. The general procedure involves multiplying age-specific harvest rates by age-specific weights to calculate an age-sp ecific expected yield.

 Biomass production forgone—biomass that would have been produced had individuals not been impinged or entrained, 160 calculated for all species from species- and age-specific growth rates and survival probabilities . It refers to the mass of impinged and entrained organisms that would have served as valuable components of aquatic food webs, particularly as an important food supply to other aquatic species.

159 Ricker, W.E. 1975. Computation and interpretation of biological statistics of fish populations. Fisheries Research Board of Canada, Bulletin 191. 160 Rago, P.J. 1984. Production forgone: An alternativ e method for assessing the consequences of fish entrainment and impingement losses at power plants and other water intakes. Ecological Modeling, 24(1- 2): 79-111.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 485 of 642 Estimates of forgone fishery yield include direct and indirect losses of impinged and entrained species that are harvested. Indi rect losses represent the yield of harvested species lost because of reductions in prey availability according to a simple trophic transfer model (i.e., forage species). 161 Chapter 3 of the BA contains detailed methodology for these analyses. Studies from individual facilities may underestimate or overestimate impingement mortality and entrainment rates at those facil ities. For example, facility studies typically focus on a subset of fish species affected by impingement mortality and entrainment, resulting in other species bei ng ignored. The number of indi viduals lost to impingement mortality and entrainment is then underest imated. Estimating the magnitude of this underestimate is not possible because of the lo w number of replicate studies. Moreover, studies often do not count early life stages of organisms that are more difficult to identify. In addition, many of the impingement morta lity and entrainment studies used by the Agency were conducted more than 30 years ago, prior to the improvement of aquatic conditions that have resulted from im plementation of the CWA as well as stateState and local laws and efforts. In locations where water quality was degraded at the time of impingement mortality and entrainment sa mpling relative to current conditions, the abundance and diversity of fish populations mi ght have been depressed, resulting in low impingement mortality and entrainment estimates. Therefore, use of these data may

161 Indirect losses account for about 10 percent of commercial and re creational harvest reductions at baseline.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 486 of 642 underestimate the magnitude of current im pingement mortality and entrainment. Alternatively, studies could have been conducted in locations where local fish populations are now lower than they were wh en the study occurred. Such a shift in fish populations might have occurred because of na tural variability in populations, because of other anthropogenic effects (i.e., over-harve sting), or because of competition from invasive species. In such cases, the use of these data may overestimate the magnitude of current impingement mortality and entrainment. EPA’s use of linear methods for projecti ng losses to fish and shellfish in the water bodywaterbody may also overstate or understate im pacts. Nevertheless, the data from facility studies are the best means to es timate the relative magnitude of impingement mortality and entrainment nationwide. Exhibit X-2 presents EPA’s es timates of baseline annual impingement mortality and entrainmen t, and reductions in annual impingement mortality and entrainment estimated to occu r under the final rule and other options considered. Impingement mortality and entrai nment reductions under the final rule are less than the reductions under Proposal Opti on 2 and greater than reductions under Proposal Option 4. Unlike the analysis of Proposal Option 2, EPA did not model the entrainment reductions forfrom cooling tower installation under the final rule and Proposal Option 4 because these would be base d on site-specific determinations of BTA, which are not possible to predict with information EPA has today. EPA estimated a small amount of entrainment losses under the fina l rule and Proposal Option 4 due to the assumed installation of variable speed pumps at some facilities to achieve compliance via the low velocity compliance alternative.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 487 of 642 Exhibit X-2. Baseline annual IM&E and annual reductions in IM&E for existing units at all facilities subject to the final rule

Loss mode a Reduction in annual IM&E by regulatory option b,c Baseline Annual IM&E Proposal Option 4 Final Rule – Existing Units Proposal Option 2
Individuals (millions) IM 378.8419.9 394.1441.3 458.2511.9 486.3568.6 E 423.2399.8 17221,693 .9 339,261.2335,447.6 497, 152.9316.3 IM&E 802.0819.7 2117.02,135.2 339,719335,959 .4 497, 639.2884.8 Age-One Equiva lents (millions) IM 550.0612.8 571.6647.5 662.6748.2 700.6824.2 E 1. 54 4. 65 889. 73 1, 089.9106.7 IM&E 551.5614.2 576.3652.0 1, 552.3637.5 1, 790.5931.0 Forgone Fishery Yi eld (million lbs) IM 10.812.6 1113 .3 13.115.4 14.216.9 E 0. 10 0.1 35. 57 52. 09 IM&E 10.812.6 1113 .4 48.651.1 66.269.8 Production Forgo ne (million lbs) IM 112.8129.7 117.2136.5 135157 .2 143.1174.8 E 0. 65 2. 54 345.6337.0 447.2451.8 IM&E 113.4130.3 119.7138.9 480.8494.2 590.3626.6

a IM = impingement mortality; E = entrainment; IM&E = impingement mortality and entrainment

b IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Op tion 2 = intake flow commensurate with closedcycle cooling for facilities th at have a DIF of greater th an 125 mgd and impi ngement mortality lim itations based on modified traveling screens for all fac ilities with flow gr eater than 2 mgd.

c The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E reductions associated with the new unitsunit provision of the final rule are presented in Exhibit X-4. Exhibit X-3 presents EPA’s estimates of annual impingement mortality and entrainment for final rule and other consid ered options by category of fish species. Estimates of annual forgone fishery yield incl ude both direct losses of harvested species and indirect losses from reductions in prey fish species. Organisms convert (on average) only about 10 % percent of the mass of food they cons ume into additional tissue mass.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 488 of 642 Thus, although essential to maintain ecosyst em function, the vast majority of biomass moving through food webs does not reach hi gher trophic levels associated with commercial and recreational species and harvest. Instead, the biomass of prey species is metabolized and used for predator locamationlocomotion , reproduction, and tissue repair. Accordingly, the portion of impingement mortality and entrainment that are counted within the forgone harvest metric ) represent only a small pe rcentage of all organisms experiencing impingement mortality and entrai nment at cooling water intake structures. Neither forage species nor the unlanded por tion of recreational and commercial species were assigned direct use values in this an alysis, although losses in forage species did contribute to the overall losses in recreatio nal and commercial species as noted above. Because the majority of annual impingeme nt mortality and entrainment include unharvested recreational and commercial fish and forage fish, considering nonuse values in the final rule benefits analysis is part icularly important. If nonuse values were not considered at all, only two to three percen t of fish losses would be represented in monetized benefits.

Exhibit X-3. Distribution of annual baseline IM&E and reductions in IM&E by species category, for individual organisms and Age-1 equivalents , at existing units for the final rule and options considered

IM&E Metric a Reduction in IM&E by regulatory option b,c
Baseline IM&E Proposal Option 4 Final Rule – Existing Units Proposal Option 2 Individuals (millions) All Species 802.0819.7 2, 117.0135.2 339,719335,959 .4 497, 639.2884.8*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 489 of 642 Forage Species 591.5607.9 1, 441.5423.6 229,399.5224,3 23.1 327,836.5325,0 69.1 Commercial & Recreational Species 210.5211.8 705711 .5 110,319.9111,636 .3 169,802.7172,81 5.8
Commercial & Recreational Harvest (millions of fish) 14.316.1 15.017.1 42.044.7 50.454.0

Lost Individuals with Direct Use Value (%) 1. 7897 % 0. 7180 % 0.01% 0.01%

Age-One Equiva lents (millions) All Species 551.5614.2 576.3652.0 1, 552.3637.5 1, 790.5931.0
Forage Species 467.9528.2 487560 .8 1, 177.8258.7 1, 334.6459.7 Commercial & Recreational Species 83.685.9 88.491.2 374.5378.8 380.7471.3
Commercial & Recreational Harvest (millions of fish) 14.316.1 15.017.1 42.044.7 50.454.0

A1E Losses with Direct Use Value (%) 2. 5963 % 2. 6062 % 2. 7173 % 2. 8180 %

a IM&E = impingement and entrainment; A1E= age-one equivalent;

b IM&E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling screens for all facilities with flow greater than 2 mgd; Pr oposal Option 2 = intake flow commensurate with closed-cycle cooling for facilit ies that have a DIF of greate r than 125 mgd and impingement mortality limitations based on modified traveling screens for all fac ilities with flow gr eater than 2 mgd.

c The totals presented here do not include IM&E reductions associated with new units. Estimated IM&E reductions associated with the new unitsunit provision of the final rule are presented in Exhibit X-4.
In addition to the final rule and other options anal yzed for existing units (Proposal Option 4 and Proposal Option 2), EPA analyzed requirements for new units at existing facilities. EPA’s new unit provision in the final rule for new units establishestablishes entrainment requirements for all new st and-alone units at existing facilities and where the turbine and condenser are newly built or replaced, except in th e case of high energy efficiency units . EPA could not directly apply the extrapolation methodology used for existing units because facility-specific information was not available for new units.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 490 of 642 Instead, EPA estimated impingement mortality and entrainment reductions on the basis of impingement mortality and entrainment reductions per million gallons per day from the analysis of existing units. The estimated reduction in impingement mortality and entrainment for the new unitsunit requirement is summarized in Exhibit X-4.

Exhibit X-4. Baseline annual IM&E and annualAnnual reductions in IM&E by species category for the final rule for new units
IM&E metric a Reduction in IM&E b Individuals (millions) All Species 8,420.9867.2 Forage Species 5,547.3566.1 Commercial and Recreational Species 2,873.7301.1 Commercial and Recreational Harvest (millions of fish) 0. 61 Lost Individuals with Direct Use Value (%) 0.01% Age-One Equiva lents (millions) All Species 21.82.3 Forage Species 15.41.7 Commercial and Recreational Species 6.40.7 Commercial and Recreational Harvest (millions of fish) 0. 61 A1E Losses with Direct Use Value (%) 2. 8687 %

a A1E= age-one equivalent; IM&E = impingement mortality and entrainment

b Impingement mortality and entrainment reductions increase throughout the compliance period. The values presented here reflect the peak reductions achieved in 2059, the final year of the compliance period. IM&E Effects: entrainment requirements for all stand-alone or units where the turbine and condenser are newly built or replaced (note: these number will dr op as the high energy e fficiency units are pulle d out from the rule)..
D. National Benefits of the Fi nal Rule and Options Considered 1. Overview Economic benefits of the final rule and other options considered for regulated facilities can be categorized broadly into use and nonuse bene fits of goods and services. Use values include benefits that pertain to th e human use (direct or indirect) of affected fishery resources. Use values reflect the value of all current direct a nd indirect uses of a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 491 of 642 good or service. Direct use benefits can be further categorized according to whether affected goods and services are traded in the market (i.e. commercially captured fish are traded, recreational catch is not). Likewise, indirect use benefits can be linked to direct goods and services. For example, reductions in impingement mortality and entrainment of forage fish will enhance the biomass of species targeted for commercial (market) and recreational (nonmarket) uses. It c ould also affect property values. Nonuse benefits are those benefits that are indepe ndent of any current or anticipated human use of a re source. Nonuse benefits reflec t human values associated with existence and bequest mo tives. In other words, these values reflect the value the public places on something simply as a result of its existence . or natural functioning. EPA estimated the economic benefits from nati onal regulatory options using a range of valuation methods. Commercial fishery bene fits were valued using market data. Recreational angling benefits were valued us ing a benefits transf er approach based on revealed and stated preference data. To es timate indirect use benefits from reduced impingement mortality and entrainment of forage species, EPA used a simple trophic transfer model. This model translated cha nges in impingement mortality and entrainment of forage fish into changes in the harves t of commercial and r ecreational species. All benefits for fish saved under today’s final rule are estima tes on the basis of projected numbers of age-one equivale nt fish, converted to harv estable age equivalents on a species-by-species basis for those commercial species analyzed. EPA calculated the monetary value of use benefits of the final rule and other options considered for existing facilities usi ng two discount rate values: 3 and 7 percent.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 492 of 642 All dollar values presented are in 2011 dollars . Because avoided fish deaths occur mainly in fish that are younger than harvestable ag e (eggs, larvae, and juveniles), the main benefits from avoided impingement mortal ity and entrainment would be realized typically 3 to 4 years after their avoided deat h. A detailed description of the approaches used to address this is in Appendix C of the BA. Neither forage species nor the unlanded portion of recreational and commercial species were assigned direct use values in this analysis. Their potential value to the public is derived from several alternative sources: their indirect use as both food and breeding population for those fish that are harvested; and other non-usenonuse value. These includeThe nonuse value includes individuals’ WTP (willingness to pay) for the protection of fish based on a sense of a ltruism, stewardship, bequest, or vicarious consumption; and their support of ecosystem stability and function. To estimate a subset of nonuse benefits from reducing impingement mortality and entrainment of forage species and landed and unlanded commercial and recr eational species, EPA conducted a benefits transfer using a non market valuation study of a quatic ecosystem improvements. This effort generated partial estimates of nonuse values for resource changes for one species expected to result in the North Atlantic and Mid-At lantic benefits regions from the final rule and considered options. EPA was un able to use benefits transfer to estimate reliable nonuse valuations for changes expect ed to result in other study regions.a species that represents less than one percen t of adverse environmental impacts. EPA developed and fielded an original stated preference survey to estimate total WTP for improvements to fishery resources affected by impingement mortality and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 493 of 642 entrainment from regulated 316(b) facilities (75 FR 42438, July 21, 2010). Preliminary results of the stated preference survey were de scribed in a Notice of Data Availability (77 FR 34927, June 12, 2012). EPA presents preliminary benefits estimates based on the stated preference survey in the BA document to demonstrate progress on this effort. In the absence of final survey results, EPA es timated partial nonuse benefits for the final rule using the benefits tran sfer approach from proposal. EPA updated the proposal results to incorporate additional stock assessment data for winter flounder, the species used as the basis for the analysis. Due to the ch allenges associated with estimating nonuse benefits, some nonuse benefits ar e described only qualitatively. 2. Timing of Benefits Discounting refers to the economic conversion of future benefits and costs to their present values, accounting for the fact that in dividuals value future outcomes less than comparable near-term outcomes. Discounting en ables a valid comparison of benefits and costs that occur across different periods. EPA used discounting to account for differences in the timing across benefits a nd costs under the final rule and optionoptions considered. EPA estimated the expected benefits of the fi nal rule once the rule takes full effect, then used discounting to account for delays in the realization of benefits . Two different delays affect the timing of benefits under th e final rule and options considered. First, facilities will begin to incur cost s prior to technology installation. Facilities will face regulatory requirements once the ru le is effective, but it will take time for requirements to be developed and for the re quired technology to be installed. Analyzed facilities are assigned a technology instal lation year which considers facility*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 494 of 642 characteristics and technology being installe d. EPA assumed that facilities installing impingement technology tend to complete t echnology installation s ooner than facilities installing closed-cycle cooling . (for other options considered). The assignment of technology installation years is speculative on EPA’s part, because EPA does not have sufficient data on hand to project the schedules that Directors will set for facilities. See Chapter 3 of the Economic AnalysisEA document for the final existing facilities rule (referred to as the EA) for details on EPA’s development of technology installation years. EPA effectively discounts benefits to a greater extent than costs to account for the lag between the incurrence of costs and the realization of benefits. Second, an additional time lag will result between technology implementation and use values via increased fishery yields. This lag occurs because several years could pass between the time an organism is spared from impingement mortality or entrainment and the time of its potential harves t. For example, a larval fish spared from entrainment (in effect, at age 0) could be caught by a recreatio nal angler at age 3, meaning that a 3-year time lag arises between the incurred technology cost and the realizat ion of the estimated recreational benefit. Likewise, if a 1-year-old fish is spared from impingement and is then harvested by a commercial waterman at age 2, there is a 1-year la g between the incurred cost and the subsequent commercial fishery be nefit. To account for this growth period, EPA applied discounting by species groups in each regional study. Note that nonuse values (depending on how they are measured) do not necessarily need to be discounted similarly.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 495 of 642 3. Recreational Fishing Valuation a. Recreational Fishery Methods To estimate recreational benefits of the final options, EPA developed a benefits transfer approach on the basis of a meta-analy sis of recreational fish ing valuation studies designed to measure the various factors that determine WTP for catching an additional fish per trip. Regional benefits are summarized as follows (for details, see Chapter 7 of the BA):
1. Estimate the annual forgone catch of recreational fish (number of fish) attributable to impingement mortality and entrainment under current conditions.
2. Estimate the marginal value per fish usi ng a benefit transfer function based on a meta-analysis of recreational fishing studies.
3. Multiply the forgone catch by the marginal value per fish to estimate the total annual value of the forgone catch.
4. Estimate the annual value of reductions in the forgone catch attributable to the regulatory analysis options. 5. Discount the time path of benefits at 3 and 7 percent to reflect the time lag between impingement mortality and en trainment reductions and increased harvests. b. Estimated Benefits to Recreational Anglers Decreasing impingement mortality and entr ainment increases the number of fish available to be caught by recr eational anglers, thereby increas ing angler welfare. Exhibit X-5 shows the estimated benefits resulting from reduced impingement mortality and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 496 of 642 entrainment under today’s final existing fac ilities rule and other options that EPA considered. The total annua lized recreational fishing benefits for all regions at existing units of existing facilities for the final rule (impingement mortality and entrainment combined) are $ 12.818 million using a 3 percent discount rate and $ 9.814 million using a 7 percent discount rate. Annual recreational fish ing benefits for other options considered range from $ 12.217 to $ 37.343 million using a 3 percent discount rate and $ 9.413 million to $ 26.430 million using a 7 percent discount rate.

Exhibit X-5. Annual recrea tional fishing benefits from eliminat ing or reducing IM&E at existing facilitiesunits at existing facilities for the final rule and other options considered

Regulatory option a Increased harvest 3% discount rate 7% discount rate (million fish) (million 2011$) (million 2011$)
Proposal Option 4 5.36.1 12.217.1 9.412.6
Final Rule – Existing Units 56 .5 12.818.2 9.813.5

Proposal Option 2 19.420.5 37.343.0 26.429.5

Baseline 23.425.3 68.678.8 6572 .0

a IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater th an 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling sc reens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow co mmensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.
4. Commercial Fishing Valuation Reductions in impingement mortality and entrainment at cooling water intake structures are expected to benefit the co mmercial fishing industry. By reducing the number of fish killed, the num ber of fish available for harvest is expected to increase.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 497 of 642 The next section summarizes the methods EPA used to estimate benefits to the commercial fishing sector. The section afte r that presents the estimated value of commercial fishing benefits. a. Commercial Fishi ng Valuation Methods The total loss to the economy from impingement mortality and entrainment impacts on commercially harvested fish species is determined by the sum of changes in both producer and consumer surplus. EPA a ssumed a linear relationship between stock and harvest, such that if 10 percent of th e current commercially targeted stock were harvested, 10 percent of the commercially targ eted fish lost to impingement mortality and entrainment would have been harvested abse nt impingement mortal ity and entrainment. The percentage of fish harvested is based on data of historical fishing mortality rates. Producer surplus provides an estimate of the economic damages to commercial fishers, but welfare changes can also be expect ed to accrue to final consumers of fish and to commercial consumers (including processors , wholesalers, retaile rs, and middlemen) if the projected increase in harvest is accompan ied by a change in price. The analysis of market impacts involves the following steps (for details, see Ch apter 6 of the BA):
1. Assessing the net welfare changes for fish consumers due to changes in fish harvest and the corresponding change in fish price.
2. Assessing net welfare changes for fish ha rvesters due to the change in total revenue, which could be positive or negative.
3. Calculating the increase in net social be nefits when the fish harvest changes by combining the welfare changes for consumers and harvesters.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 498 of 642 For a more detailed description of th e methodology for commercial fishing, see Chapter 6 of the BA. b. Commercial Fishi ng Valuation Results Exhibit X-6 presents the estimated annual commercial fishing benefits attributable to the proposed options. The results reporte d include the total reduction in losses in pounds of fish, and the value of this reduc tion discounted at 3 and 7 percent. Total estimated annualized commercial fishing benefits for the United States for the final rule are $0.9 million using a 3 percent discount rate and $0.7 million using a 7 percent discount rate. Annual commercial fishing bene fits for other options considered range from $0. 89 million to $ 4.03.9 million using a 3 percent discount rate and $0. 67 million to $2. 87 million using a 7 percent discount rate. EPA estimated the expected price changes from eliminating baseline levels of impi ngement mortality and entrainment and found them to be small, ranging from 0.2 to 2.5 percent.
Exhibit X-6. Annual commercial fishing benefits from eliminating or reducing IM&E at existing unitunits at regulatedexisting facilities for the final rule and other options considered

Regulatory option a Increased harvest 3% discount rate 7% discount rate (million fishlbs ) (million 2011$) (million 2011$)
Proposal Option 4 9.05.3 0. 89 0. 67
Final Rule – Existing Units 9. 5 .7 0.9 0.7

Proposal Option 2 22.614.0 4.03.9 2. 87

Baseline 27.017.3 8.0 7. 62

a IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater th an 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling sc reens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow co mmensurate with closed-cycle cooling for facilities that have a DIF of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 499 of 642 greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

5. Nonuse Benefits Aquatic organisms with no direct use benef its account for the majority of cooling water intake structure losse s (Exhibit X-3). Although many peopleindividuals may not use a particular waterbody waters for recreation or fishing, peopleindividuals nevertheless may value improvements in that waterbody. To quantitatively assess the ecological gains from the final rule and other options considered, EPA took two approaches – a benefits transfer approach a nd a stated preference surveyboth of the only two approaches available for quantifying nonuse benefits – a benefits transfer approach and a stated preference survey. It is not necessary to use a stated preference survey approach to calculate benef its; however, important nonuse be nefits can be missed by not using a stated preference survey approach. So EPA took both approaches, but relied on only the benefits transfer approach for the be nefits analysis supporti ng the final rule. The benefits transfer approach relies on the ex istence of previously published studies with values that can be transferred; in instances where nonuse is potentially significant, as is the case here, previously published studies would only include nonuse value if they adopted a stated preference approach

. EPA used a benefit transfer approach to partially monetize nonuse benefits associated with reductions in impingement mortality and entrainment of fish, shellfish, and other aquatic organisms under the categorical regulatory options for the North*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 500 of 642 Atlantic and Mid-Atlantic be nefits regions. EPA applied es timated values from a study conducted in Rhode Island; these estimates are likely to be more representative of nonuse values held by individuals resi ding in the Northeast United St ates and less accurate in other regions. EPA was unable to identify co mparable studies conduc ted in other regions that could be used to estimate nonuse values. Chapter 8 of the BA provides further detail on this analysis. The preferred techniques used to estimatingestimate total resource values (including both use and nonuse values), in general, are to use benefits transfer or to conduct a stated preference survey. There are many studies in the environmental economics literature that quantif y benefits or WTP associated with various types of water quality and aquatic habitat cha nges. However, none of these studies allows the isolation of non-market WTP associated with quantifie d reductions in impingement mortality and entrainment for forage fish or unlanded por tion of commercial and recreational species.

a. Non-UseNonuse Benefits Transfer EPA identified a recent stated preference su rvey of Rhode Island residents that is closely related to the 316(b) policy context. The study results have been published in multiple scientific journals a nd books including Johnston et al. 162 and Zhao et al. 163 Both

162 Johnston, R.J. E.T. Schultz, E.T., K. Segerson, E.Y. Besedin, and M. Ramachandran. 2012. Enhancing the content validity of stated preference valuation: Th e structure and function of ecological indicators. Land Economics, 1: 102-120. 163 Zhao, M., Johnson, R. J. and Schultz, E. T. 2013. What to Value and How? Ec ological Indicator Choices in Stated Preference Valuation. Environmental Resource Economics. Published online, February 8, 2013.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 501 of 642 the Rhode Island study and the present context address polic y changes that increase the number of forage fish in aquatic habitat with unknown effects on ove rall fish populations. The Rhode Island study was developed orig inally as a case study addressing Rhode Island residents’ preferences for the restorati on of migratory fish passage over dams in Rhode Island’s Pawtuxet and Wood-Pawcatuck watersheds. It estimates nonuse values by asking respondents to consider changes in ecological indica tors reflecting quantity of habitat, abundance of wild life, ecological condition, and abundance of migratory fish species. Within this study, estimated valu es were based on the relative change in abundance of fish species most affected by restoration. EstimatedEstimating benefit functions from the Rhode Island choice experiment
survey 164 allows one to distinguish benefits a ssociated with resource uses from those associated primarily with nonuse motives. Within the benefit transfer application, WTP is quantified for increases in non-harvested fish alone on the basis of the implicit price for migratory fish changes. This transfer holds constant all effects related to identifiable human uses constant (e.g., effects on catchable fis h, public access, and observable wildlife). The remaining welfare effect—derive d purely from effects on forage fish with

164 Johnston, R.J. E.T. Schultz, E.T., K. Segerson, E.Y. Besedin, and M. Ramachandran. 2012. Enhancing the content validity of stated preference valuation: Th e structure and function of ecological indicators. Land Economics, 1: 102-120; Zhao, M., Johnson, R. J. and Schultz, E. T. 2013. What to Value and How? Ecological Indicator Choices in Stated Preference Valuation. Environmental Resource Economics. Published online, February 8, 2013.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 502 of 642 little or no direct human use—may therefor e be most accurately characterized as a nonuse benefit realized by households. The estimation of nonuse values involved the following steps:
1. Use a model published by Zhao et al. 165 to estimate household WTP per percent increase in the number of fish in a given watershed. The household WTP values reflect a survey variantversion that characterizes e ffects on the number of migratory fish passing upstream.
2. Calculate the relative change in abundance for the fish species most affected by the regulation. The structure of the tran sfer study dictates that WTP should be evaluated based on the single species that would experi ence the greatest relative increase in abundance from restoration and that WTP estimates from multiple species impacted by IM&E should not be treated as strictly additive. After reviewing available stock assessment data , current stock size, and the magnitude of IM&E, EPA determined winter flounder to be the species likely to experience the greatest percent increase in abunda nce among those species with sufficient stock information to conduct the analys is within the boundaries of the North Atlantic and Mid-Atlantic benefits regions. This speci es is harvested; however, fishearly life stages of recreational and commercial species may be eaten by other organisms during early life-stages and therefore have nonuse values.

165 Zhao, M., Johnson, R. J. and Schultz, E. T. 2013. What to Value and How? Ec ological Indicator Choices in Stated Preference Valuation. Envi ronmental Resource Economics.Op cit..*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 503 of 642 3. Estimate total household WTP by applying m odel results for WTP per percentage of estimated winter flounder impingement mortality and entrainment. Total regional WTP is the product of household WTP and the number of households in the affected region (for detail s, see Chapter 8 of the BA). b. Estimated Nonuse Benefits for the Nort h Atlantic and Mid-Atlantic Regions EPA expects that a decrease in impingeme nt mortality and entrainment will lead to increased fish abundance in affected wa ter bodies, thus incr easing nonuse benefits. Exhibit X-7 shows the benefits that would result from reducing impingement mortality and entrainment through today’s final rule and other options considered. Application of the transfer study requires th at the increases be expresse d as a percent improvement from current conditions relative to a maximum number of fish that could be supported. EPA calculated estimates of WTP on the basis of the increase in age-1 equivalent winter flounder relative to the estimated number of age-1 fish when the stock is at maximum sustainable yield, thus assuming that the future survivalpopulation structure of age-1 equivalents spared under the final rule will becurrent stock is similar to the larger stock. The total annualized nonuse benefits for the No rth Atlantic and Mid- Atlantic regions for the existing unit provision of the final rule are $1 .0 million using a 3 percent discount rate and $0. 98 million using a 7 percent discount rate. For other options considered, annualized nonuse benefits range from $0.3 to $ 52.751 million using a 3 percent discount rate and $0.3 to $ 39.937 million using a 7 percent discount rate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 504 of 642 Exhibit X-7. Annual nonuse benefits from el iminating or reducing IM&E at existing facilitiesunits at existing facilities in the North Atlantic and Mid-Atlantic regions for the final rule and options considered a

Regulatory option b Winter flounder IM&E (million A1E) Increased winter flounder A1E abundance (%) 3% discount rate (millions 2011$) 7% discount rate (millions 2011$)
Proposal Option 4 0.03 0.02% 0.3 0.3
Final Rule – Existing Units 0.08 0.07% 1.0 0. 98
Proposal Option 2 4.78 4.18% 52.751.1 39.937.3

Baseline 6.23 5.44% 10299 .1 103.796.9

a IM&E = impingement and entrainment; A1E= age-one equivalent;

b IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Op tion 2 = intake flow commensurate with closedcycle cooling for facilities th at have a DIF of greater th an 125 mgd and impi ngement mortality lim itations based on modified traveling screens for all fac ilities with flow gr eater than 2 mgd.
c. Stated Preference Survey EPA conducted a stated preference survey to calculate benefits associated with minimizing adverse impacts to aquatic eco systems from cooling water intakes. However, EPA is also seeking SAB input on whether and how this survey could be used, as support for national rulemaking or NPDES permitting whenever benefit-cost analysis is considered. Refer to Sections VI.F.1 and X.D.1 fo r additional discussi on of the stated preference survey. EPA did not rely on the results of its stated preference survey in estimating the benefits of today’s rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 505 of 642 6. Threatened and Endangered Species This section summarizes methods and result s of EPA’s analysis of benefits from improved protection of T&E species from t oday’s final rule and options considered. Chapter 5 of the BA provides further detail on this analysis. Even if levels of mortality due to im pingement and entrainment from cooling water intake structures of T&E species are lo w in absolute numbers, they may represent a substantial portion of annual reproduction because of the reduced population levels that cause a species to be protected. Consequen tly, impingement mortality and entrainment may either lengthen recovery time, or hasten the demise of these species. Adverse effects of cooling water intake structures on T&E species can occur in several ways:

 Populations of T&E species may suffer direct harm as a consequence of impingement mortality and entrainment.

 T&E species may suffer indirect harm if a cooling water intake structure alters food webs.

 Cooling water intake structur es can alter habitat designate d as critical to the longterm survival of T&E species (e.g., thermal discharges associated with oncethrough cooling).. Consequently, the 316(b) regulation will he lp preserve threatened and endangered species. a. Qualitative Assessment of Impingement Mortality and Entrainment Impacts on T&E Species*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 506 of 642 By definition, T&E species are characteri zed by low population levels. As such, it is unlikely that these species are recorded in significant number, if recorded at all, in impingement mortality and entrainment mon itoring studies. Thus, losses are difficult to identify and quantify in a framework deve loped for non-listed species. Consequently, EPA developed a qualitative methodology to estimate the number of T&E species affected by impingement mortality and entrainment. To qualitatively assess the potential for c ooling water intake structure impacts on aquatic T&E species, EPA constructed a databa se that assessed the geographical overlap of cooling water intake struct ure and habitat used by aquatic T&E species. This database identified the number of T&E species potentially affected by each complyingregulated 316(b) facility, and the number of facili ties potentially affecting each T&E species. Additional details are in Chapter 5 of the BA. Using this database, EPA found 99 federally Federally- listed aquatic T&E species that overlap with at least one covered cooling water intake structure (an interaction in Exhibit X-8). T&E species included freshwater , marine, and anadromous fish, freshwater mussels, and sea turtles. On average, the ha bitat of each T&E species overlapped with 22 covered facilities (Exhibit X-8) , suggesting that the 316(b) rule may have substantial positive benefits of ensuring the long-term sustainability and recovery of T&E species.
Exhibit X-8. Number of regulated 316(b) cooling water intake structures in aquatic T&E species habitat on a per-species basis

Subset of affected species a b Species Interactions b Facilities per T&E species c Avg Max All T&E Species 99 2,158 21.8 103*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 507 of 642 T&E Freshwater Mussels 53 1,176 21.8 103
T&E Anadromous Fish 12 235 19.6 101
T&E Freshwater Fish 21 65 3.1 7
T&E Snails 7 199 28.4 49 Sea Turtles 6 483 80.5 102

a Aquatic T&E species includes species listed as threatened or endangered by the U.S. Fish and Wildlife Service (freshwater) or National Oceanic and Atmospheric Administration National Marine Fisheries Service (marine). Only aquatic species overlapping with a minimum of one cooling water intake structure are included.

b Each interaction represents an overlap between the range of a T&E species and cooling water intake structure.

c Avg = average, Max = maximum
b. Quantitative Assessment of Impingement Mortality and Entrainment Impacts on T&E Species Although difficult to observe and quantif y, EPA identified 14 T&E species with confirmed impingement mortality and entr ainment based on facility impingement mortality and entrainment studies. EPA notes that some impingement mortality and entrainment studies identifying T&E losses we re conducted prior to the listing of the species under the ESA and would thus not represent an illegal take under the ESA.. In addition to documented species-level in stances of T&E mortality, EPA identified impingement mortality and entrainment at the level of genera 166 when these genera contain a T&E species whose habitat range overlapped the reporting facility’s cooling water intake structure. Although these are not confirmed impingement mortality and

166 Genera is the plural of genus. Genus is the rank superior to species in taxonomic biological classification. For example, the genus of Atlantic salmon ( Salmo falar ) is Salmo

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 508 of 642 entrainment of T&E species, they provide evid ence that additional T&E species are likely to be directly affected by impingement mortality and entrainment. EPA found seven genus-level matches, suggesting that the 14 T&E species suffering impingement mortality and entrainment may be inaccurate. Of the 14 federally Federally- listed T&E species for which EPA was able to document losses in impingement mortality and entrainment studies, EPA was able to quantify impingement mortality and entrainm ent for two species (pallid sturgeon and Topeka shiner). The documented impingement mortality and entrainment occurred before these species were Federally-listed. Data were either qualitative or of insufficient quality to quantify local or regional impingement mortality and entrainment for the remaining 12 federally Federally- listed T&E species. EPA also quan tified impingement mortality and entrainment for the American paddlefish ( Polyodon spathula ), listed by several states as threatened or endangered under stateState law, using facility imp ingement mortality and entrainment studies. Exhibit X-9 presents EPA’s estimates of baseline annual impingement mortality and entrainment, and reductions in impingement mortality and entrainment which EPA estimates will occur under th e final rule and other options considered.

Exhibit X-9. Baseline annual IM&E for T&E species and reductions for existing units at existing facilities (A1Es) a,b

Species Proposal Option 4 Final Rule – Existing Units Proposal Option 2 Baseline Paddlefish c 8,658.97,930.1 8, 987.1245.4 16,840.915, 659. 7 18,841.4*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 509 of 642 Pallid Sturgeon 7165 .4 73.767.6 84.978.0 89.5

Topeka Shiner 3,117.52,910.9 3, 280009 .8 3, 780.4471 .9 3,984.9

Total 11,907.810,906. 4 12,341.711,32 2.8 20,706.219 ,209. 5 22,915.7

a IM&E = impingement and entrainment; A1E= age-one equivalent;

b IM&E Effects by Option: Proposal Option 2 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling sc reens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow co mmensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

c The American paddlefish is not a federally Federally- listed T&E species but is listed as threatened or endangered on several state lists.

d This analysis is based solely on IM controls.
Impingement mortality and entrainment is only one of many factors that adversely affect T&E species. Estimating total populat ion impacts from changes in impingement mortality and entrainment requires estimates of current populations of these fish and estimates of other anthropogenic effects whic h were not readily available for all T&E species with quantified impingement mortalit y and entrainment at the time of this analysis. Therefore, EPA was unable to qua ntify effects on T&E populations from the 316(b) regulation. c. Valuation Methods of T&E Fish Species EPA had sufficient data from impingement mortality and entrainment studies to quantify impingement mortality and entrainment estimates for three T&E species, Topeka shiner, pallid sturgeon, and paddlefish (Exhibit X-9). Two of these species (pallid*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 510 of 642 sturgeon and paddlefish) have potential use values. A limited recreational fishery (mostly catch and release) exists fo r paddlefish in several states ; although harvesting pallid sturgeon is illegal, the sp ecies is sometimes caught by recreational anglers. EPA estimated recreational use valu es for pallid sturgeon and pa ddlefish by applying transfer values from a Random Utility Model analys is it conducted to evaluate recreational fishing benefits of the 316(b) Phase II regul ation to quantified impingement mortality and entrainment (for details, s ee Chapter 5 of the BA). EPA was unable to generate estimates of nonuse values for T&E fish species because reliable population estimates needed to transfer the values were unavailable. However, EPA emphasizes that nonuse values for T&E fish species are likely to be significantly greater than any use values. Harvest of thes e species is prohibited, reflecting a societal judgment th at protection and preservation of th ese species is of greater value than harvest. d. Estimated Monetary Benefits from Reduced Mortality of T&E Fish Species Exhibit X-10 presents the estimated a nnualized benefits for a subset of T&E species. For existing units under the final rule, EPA estimates total annualized use benefits for T&E species with quantified impingement mortality and entrainment of $0. 54 million using a 3 percent discount rate and $0. 43 million using a 7 percent discount rate. For other options considered, annualiz ed benefits range from $0.4 to $0.7 million using a 3 percent discount rate and $0. 43 to $0.5 million using a 7 percent discount rate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 511 of 642 Exhibit X-10. Annual use benefits from elimin ating or reducing IM&E of T&E species at all regulatedexisting units of existing facilities a for the final rule and other options considered a ,b ,c

Regulatory option Increased harvest 3% discount rate 7% discount rate (number of fish) (million 2011$) (million 2011$)
Proposal Option 4 8,730.37,995.5 0.4 0. 43
Final Rule – Existing Units 9,060. 8 ,313.0 0. 54 0. 43

Proposal Option 2 16,925.815,737.7 0.7 0.5
Baseline 18,930.9 1.2 1. 23

a IM&E = impingement and entrainment; T&E = threatened and endangered Values are included for pallid sturgeon and paddlefish in the Inland region.

b IM&E Effects by Option: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater th an 50 mgd; Final Rule = impingement mortality limitationsstandards based on modified traveling sc reens for all facilities with flow greater than 2 mgd; Proposal Option 2 = intake flow co mmensurate with closed-cycle cooling for facilities that have a DIF of greater than 125 mgd and impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd.

c This analysis is based solely on impingement mortality controls. EPA notes that the benefit values pres ented in Exhibit X- 10 represent only a fraction of values for T&E species potentially affected by the final existing facilities rule. The Agency was able to obtain only use values and for only a small subset of all affected T&E species. Moreover, because of the nature of T&E species, even a small increase in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 512 of 642 population could yield economic and ecological benefits (e.g., Richardson and Loomis 167 ; Bell et al. 168 ; Berrens et al. 169 ) e. Valuation Methods for T&E Sea Turtles In addition to estimating values of T& E fish with quantitative estimates of impingement mortality and entrainment, EPA estimated the WTP for sea turtle conservation. In this analysis, EPA app lied estimates from a study using a stated preference valuation approach to estimat e total economic value of a management program that reduces the risk of ex tinction of loggerhead sea turtles. 170 Although impingement mortality and entrai nment of turtles is relatively low compared to mortality from shri mp trawling and other fisheries, 171 it is known that reducing turtle mortality during juvenile and subadult life stages can have a substantial positive effect on population growth. 172 The marginal change in extinction probability of sea turtles due to 316(b) regulatory options is likely to be at least 0.01, or a 1 percent decrease in the probability of extinction over 25 years. This assessment is based on

167 Richardson, L., and J. Loomis. 2009. The total eco nomic value of threatened, endangered and rare species: An updated meta-analysis. Ecological Economics, 68(5): 1535-1548. 168 Bell, K.P, D. Huppert, and R.L. Johnson. 2003. Willingness to pay for local coho salmon enhancement in coastal communities. Marine Resource Economics, 18: 15-31. 169 Berrens, R.P, P. Ganderton, and C.L. Silva. 1996. Valuing the protection of minimum instream flow in New Mexico. Journal of Agricultural and Resource Economics 21(2): 294-309. 170 Whitehead, J.C. 1993. Total economi c values for coastal and marine wildlife: specification, validity, and valuation issues. Marine Resource Economics, 8(2): 119-132. 171 Plotkin, P. T., (Ed). 1995. National Marine Fisherie s Service and U. S. Fish and Wildlife Service Status Reviews for Sea Turtles Listed under the Endangered Species Act of 1973. National Marine Fisheries Service. Silver Spring, MD. 172 Crouse, D.T, L.B. Crowder, and H. Caswell. 1987. A stated-based population model for loggerhead sea turtles and implications for conservation. Ecology, 68(5): 1412-1423.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 513 of 642 reports that impingement mort ality and entrainment may result in the loss of more than 100 turtles per year and because turtle populat ion growth rates are known to be sensitive to changes in juvenile and subadult life stages. 173
f. Benefits from Reduced Mo rtality of T&E Sea Turtles The U.S. range of loggerhead sea turtle s includes the Gulf of Mexico, South Atlantic, Mid-Atlantic, and No rth Atlantic 316(b) regions. 174 To calculate national WTP for an increased 25-year survival probability of loggerhead sea turtles, EPA assumed the affected population to include households in St ates with 316(b) faci lities that are in loggerhead sea turtle habitat. EPA determined that 54.8 million households would be willing to pay for improved protection of logge rhead sea turtles. Although incidences of mortality have been reported at facilities in California, Texas, Fl orida, South Carolina, North Carolina, and New Jersey, EPA does not have sufficient information to quantify total sea turtle losses due to intakes or the reductions in such losses that might occur from the final rule or options considered. But as an illustrative example, assuming that the survival probability of loggerhead sea turtle s over 25 years were increased by 1 percent, and applying a mean household value of $0.37 (2011 dollars), the monetized value would be $19. 3 million and $18. 8 million and $20.2 million using discount rates of 3 percent and 7 percent, respectively. EPA is presenting these estimates only to demonstrate the

173 Ibid. 174 U.S. Fish and Wildlife Service (USFWS) (2010c ). "North Florida Ecol ogical Services Office: Loggerhead Sea Turtle (Caretta caretta )." Available at http://www.fws.gov/northf lorida/seaturtles/turtle%20factsh eets/loggerhead-sea-turtle.htm.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 514 of 642 potential range of benefits, a nd is not including them in na tional benefits totals for the final rule and options considered. Actual household values and total benefits may be higher or lower than these estimates, w ith Proposal Option 2 likely to provide substantially greater benefits than the final rule and Proposal Option 4. Because EPA does not currently have accurate national estimates of impingement mortality and entrainment for turtle species , nor are population mode ls available that estimate the effect of 316(b ) regulation on population size and extinction risk, these estimates are presented only as an illustrative example and are not in cluded in national totals. g. Other Indications of Society’s WTP for Protection of T&E Species Many sources provide information that in dicates that society places significant value on protecting T&E species. Thes e include, but are not limited to:

 The Endangered Species Act of 1973, whic h provides for the conservation of T&E species of fish and wildlife. Federa l and State expenditures on T&E species

waswere $593 .1 million during fiscal year 2011 just on protection of those federally Federally- listed T&E species that have habitat overlapping cooling water intake structures. This accounted for 68 percent of the $869 .1 million spent on fish, marine reptiles, crustaceans, co rals, clams, aquatic snails and marine mammals listed under the Endangered Species Act. 175

175 U.S. Fish and Wildlife Service. 2012. Federa l and State Endangered and Threatened Species Expenditures. Fiscal Year 2011.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 515 of 642  Restrictions on activities in the habitat occupied by T&E species. For example, water diversions on the San Joaquin-Sacram ento River delta, in place to protect the Delta Smelt ( Hypomesus transpacificus ), limit the extraction of water for drinking and agriculture.

 The willingness of individuals to volunteer their time to conserve T&E species. For example, dozens of organizations r ecruit thousands of volunteers every year to participate in sea turtle conservation and research projects. Volunteers are often required to undergo substantial training and commit to long hours. While costs to replace, protect, or enhan ce stocks, and costs to users affected by efforts to conserve stocks are not direct meas ures of economic benefits , they indicate that society is willing to pay si gnificant sums to protect a nd restore populations of T&E species. Although impingement mortality and en trainment is only one of many stressors on these species, reducing the amount of impingement mortality and entrainment could contribute to the recovery of populations over time, thereby eliminating some costs associated with conserving T&E species. 7. Assessment of Thermal Discharge Impacts In addition to reducing total impingement mortality and entrainment, closed-cycle cooling reduces thermal pollution. Most retrofit installations of cooling towers at electric generating facilities have been required by NPDES permits to reduce thermal discharges. Since thermal discharges are a product of coo ling water intake structures, the impacts of thermal discharges are a relevant considerationbenefit to considerwhen assessing appropriate technologies to reduc e the effects of cooling water intakes. The installation of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 516 of 642 technologies, such as closed-cycle coo ling systems, can reduce thermal pollution significantly. Thermal pollution has long been re cognized to cause harm to the structure and function of aquatic ecosystems. Concerns about the impacts of thermal discharges are addressed by State water quality standards that, when implemented through NPDES permits, limit the amount of heat that can be discharged to a receiving water and result , in

some cases, in technology-based permit conditions. Section 316(a) of the CWA applies to point sources with thermal discharges. It authorizes the NPDES permitting authority to impose alternative effluent limitations for the control of the thermal component of a discharge in lieu of the effluent limitations that would otherwise be required under sections 301 or 306 of the CWA. Before su ch a “thermal variance” can be granted, the permittee must demonstrate that the altern ative limit will assure the protection and propagation of a balanced, indi genous population of shellfish, fish and wildlife in and on the body of water into which the discha rge is to be made. 40 CFR 125.73(a). EPA did not quantify nationally the impact s of thermal discharges. However, numerous studies have shown that therma l discharges may substantially alter the structure of aquatic communities by modify ing photosynthetic, metabolic, and growth rates. Thermal discharges also harm aquati c life by reducing levels of dissolved oxygen, altering the location and timing of fish be havior such as spawning, aggregation, and migration, and may cause thermal shock-induc ed mortality for some species. Adverse temperature effects may also be more pronounced in aquatic ecosystems that are already subject to other environmental stressors such as high levels of biochemical oxygen demand, nutrient and sediment contamination, or pathogens. Within mixing zones, which*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 517 of 642 often extend several miles downstream from outfalls, ther mal discharges may impair efforts to restore and protect the water bodywaterbody . For example, permit requirements to limit nitrogen discharges in a watershe d, and thereby reduce harmful algal blooms, may be counteracted by thermal discharges which promote growth of harmful algae. Thermal discharges may have indirect effect s on fish and other vertebrate populations through increasing pathogen gr owth and infection rates. Thermal discharges may thus alter th e ecological services, and reduce the benefits, of aquatic ecosystems that receive heated effluent. The magnitude of thermal effects on ecosystem services is related to f acility-specific factors, including the volume of the water bodywaterbody from which cooling water is withdrawn and returned, other heat loads, the rate of water exchange, the pr esence of nearby refugia, and the assemblage of nearby fish species.

8. Assessment of Social Cost of Carbon The social cost of carbon reflects the es timated increase in the burden of global warming to society in future years du e to higher greenhouse gas (GHG) emissions, measured as CO 2 equivalents, associated with additional energy requirements – energy penalty , auxiliary energy requirements, and compliance techno logy installation – of regulatory options. EPA estimated positive or negative benefits associated with the social cost of carbon for changesdecreases or increases, resp ectively for Proposal Option 4 and Final Rule or Proposal Option 2, in energy requirements at complyingregulated facilities under the final rule and ot her options considered.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 518 of 642 EPA’s estimates of changes in CO 2 emissions were based on results from the IPMelectricity market analysis conducted for the proposed rule.using IPM. 176 For electric generators, EPA estimated the change in CO 2 resulting from boththe energy penalty associated with close-cycle recirculating technology, auxiliary energy requirement for operating compliance technology, and technology insta llation downtime. For manufacturers, EPA estimated the ch ange in carbon emissions resulting only from the energy penalty . and auxiliary energy requirement. For compliance technology installation downtime at manufacturers , EPA assumed no change in carbon emissions as the shortterm replacement of energy by electric power generating facilities that would otherwise be produced at manufacturers could eith er increase or decrease emissions. To estimate benefits associated with the reductions in carbon emissions, EPA used social cost of carbon values calculated from the 20102013 document titled, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis

- Under Executive Order 12866, developed by the U.S. Government Interagency WorkWorking Group on Social Cost of Carbon. The Agency used the workgroup’sWorking+ Group’s annual social cost of carbon values for 2010 through 2050 based on the 3 percent average di scount rate, which EPA has concluded is the most appropriate discount rate for intergener ational benefits such as the social cost of

176 For this analysis, EPA used the Integrated Planni ng Model (IPM®), a comprehensive electricity market optimization model that assesses such impacts within the context of regional and national electricity markets.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 519 of 642 carbon. See Chapter 9 of the BA for annual social cost of carbon values based on discount rates of 2.5, 3 (high) a nd 5 percent. Benefits for each year of the analysis period were calculated by multiplying the change CO 2 emissions by the SCC value for that year. Similar to the treatment of other benefits, EP A discounted all year-specific social cost of carbon values to the beginning of 2013 and calcu lated an annualized value over 51 years using a 3-percent discount rate. EPA acknowledg es that it is mixing estimates of benefits categories analyzed at different discount rates, but finds in this case that using different discount rates is justified by th e intergenerational na ture of the social cost of carbon, for purposes of the sensitivity analysis based on a 7 percent discount ra te to discount other benefit categories. Exhibit X-11 presents annualized benefits for existing units for the final rule and options considered. Included in the monetized benefits is EPA’s estimate that the final rule will reduce greenhouse gas em issions by 9.3 million tons of CO 2 -equivalent emissions over the 40-year complia nce period for this analysis. Both the final rule and Proposal Option 4 result in a net reduction in CO 2 emissions for existing units during the analysis period. Proposal Option 2 would resu lt in a net increase in emissions and negative benefits for existing units. Using a 3 percent discount rate, annualized benefits under the final rule for existing units are $ 6.412 million. Using a 7 percent discount rate, annualized benefits under final rule for existing units are $ 7.213 million.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 520 of 642 Exhibit X-11. Benefits Associated with Social Cost of Carbon for Existing Units for the Final Rule and Other Options Considered (in millions of 2011 dollars) a

Regulatory Option b 3 % Discount Rate 7 % Discount Rate

Proposal Option 4 $612 .4 $7.213.4
Final Rule – Existing Units $612 .4 $7.213.4

Proposal Option 2 -$- 1, 111643 .1 -$842.8-1,218.2

a Benefits are based on the workgroup’s average social cost of carbon values using 3 percent rate.

9. Benefits for New Units In addition to the final rule and other options considered for existing units, EPA analyzed the benefits of the requirements fo r new units at existing facilities. EPA could not directly apply the bene fits methodology used for IM&E (impingement mortality and entrainment) reductions at existing units to new un its because it lacks facility-specific information to estimate regional impingement mortality and entrainment reductions for new units. Instead, EPA estimated benefits a ssociated with IM&E reductions for the new unitsunit requirements on the basis of the monetary benefits per million gallons per day from the analysis of existing units. EPA also estimated benefits associated with changes in GHG emissions as the result of the ener gy penalty associated with operating cooling towers using the social cost of carbon. Exhibit X- 12 below presents the estimates of
monetized benefits for the new unitsunit requirements. Monetized Total monetized benefits are -$0. 42 million discounted at 3 percent and -$0.1 million discounted at 7 percent.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 521 of 642 Exhibit X-12. National benefits under the final rule for new units at existing facilities (in 2011 dollars)

Regulatory option a Monetized benefit categories

Recreational

fishing Commercial fishing Nonuse T&E species b Social Cost of Carbon c Total 3% discount rate (millions 2011$) Final Rule - New Units 0. 40 0.0 0. 71 0.0 - 1.50.3 -0. 42

7% discount rate (millions 2011$) Final Rule - New Units $ 0. 30 0.0 0. 50 0.0 -0. 92 -0.1

a IM&E Effects: Final Rule – New Units - entrai nment requirements for a ll stand-alone facilities where the turbine and condenser are newly built or replaced, except in the case of high energy efficiency units

b Benefits estimates for T&E species are restricted to recreational fishing benefits from increased catch of T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.

c Benefits are based on the workgroup’sWork Group’s average social cost of carbon values using the 3 percent rate.

10. National Monetized Benefits Quantifying and monetizing reductions in impingement mortality and entrainment attributable to the final rule and other options considered , is challenging. National benefit estimates are subject to uncertainties inherent in valuation approach es used to assess the benefits categories (see Chapte rs 5, 6, 7, 8, 9, and 12 of the BA). While EPA has no data to indicate that the results for each benefit category are atypical or unreasonable, some potentially significant benefit categories have not been fu lly monetized, and thus the national monetized benefits presented below likely underestimate total benefits. Exhibit X-13 presents EPA’s estimates of the partial monetized benefits from impingement mortality and entrainment reduction and the social cost of carbon for the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 522 of 642 final rule and other options considered. Th ese monetized values represent use values from increased commercial and recreational catch, benefits transfer of recreational fishing benefits of threatened and endangere d species, nonuse values associated with an increase in fish abundance (those fish that are not caught) in the NorthNortheast and MidAtlantic benefit regions, and national benefits es timates associated with the social cost of carbon. For the final rule for existing and ne w units, partial estimated benefits from reducing impingement mortality and en trainment at existing units are $ 21.233 million using a 3 percent discount rate and $ 18.829 million using a 7 percent discount rate. EPA was not able to fully monetize the benefits for this proposalthe final rule . Thus, the estimates represent a conservative (i.e., low) estimate of total regulatory benefits of the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 523 of 642 Exhibit X- 1113 . Summary of national benefits for all regulated facilities for the final rule

Regulatory option a Monetized benefit categories

Recreational

fishing Commercial fishing Nonuse T&E Species b Social Cost of CarbonCarbon c Total 3% discount rate (millions 2011$) Final Rule – Existing Units 12.818.2 0.9 1.0 0. 54 612 .4 21.633.0

Final Rule – New Units 0. 40 0.0 0. 71 0.0 - 1.50.3 -0. 42

Final Rule (Existing Units + New Units) 13.218.3 0.9 1. 81 0. 54 4.912.1 21.232.8

7% discount rate (millions 2011$)

Final Rule – Existing Units 9.813.5 0.7 0. 98 0. 43 7.213.4 18.928.7

Final Rule – New Units 0. 30 0.0 0. 51 0.0 -0. 92 -0.1

Final Rule (Existing Units + New Units) 10.113.5 0.7 1.40.9 0. 43 6.313.2 18.828.6

a IM&E Effects: Final Rule–Existing Units = impingement mortality limitationsstandards based on modified traveling screens for all facilities with flow greater than 2 mgd; Final Rule–New Un its: entrainment requirements for all stand-alone facilities wher e the turbine and condenser are newly built or replaced.

b Benefits estimates for T&E species are restricted to benefit transfer of recreational fishing benefits from T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.

c Baseline does not include potential benefits associated with the social cost of carbon.

Exhibit X-14 presents total monetized bene fits for the final rule and other options EPA considered for existing units by benef it category using a 3 pe rcent discount rate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 524 of 642 Annual monetized benefits are slightly higher for the final rule than Proposal Option 4, and are negative for Proposal Option 2. In cluding both existing and new units, annual*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 525 of 642 monetized benefits are $32.8 million for the final rule, $30.8 million for Proposal Option 4 and -$1,542.8 million for Proposal Option 2.

Exhibit X-14. Summary of national benefits for a ll regulated facilities for the final rule and other options EPA considered (3% discount rate)

Monetized Benefit Categories Annual Benefits by Regulatory Option a ( millions 2011$) Proposal Option 4 Final Rule – Existing Units Proposal Option 2 Existing Units Recreational Fishing 17.1 18.2 43.0

Commercial Fishing 0.9 0.9 3.9

Nonuse 0.3 1.0 51.1 T&E Species b 0.4 0.4 0.7

Social Cost of Carbon 12.4 12.4 -1,641.3

Total 31.0 33.0 -1,542.6

Final Rule - New Units Total -0.2 -0.2 -0.2
Existing and New Units Total 30.8 32.8 -1,542.8

a IM&E Effects: Proposal Option 4 = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 50 mgd; Final Rule–Existing Units = impingement mortality limitations based on modified traveling screens for all facilities with flow greater than 2 mgd; Proposal Option 2 = impingement mortality limitations based on modified traveling sc reens for all facilities with flow great er than 2 mgd and en trainment mortality limitations commensurate with closed-cycle recirculating systems for all facilities with flow greater than 125 DIF; Final Rule–New Units: entrainment requirem ents for all stand- alone facilities.

b Benefits estimates for T&E species are restricted to benefit transfer of recreational fishing benefits from T&E species. They do not include benefits for reduced mortality of T&E sea turtles and other nonuse values associated with T&E species.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 526 of 642 EPA recognizes that its estimates of ecological and economic benefits projected to occur under regulation are affected by uncertainty at many levels.

 Not all ecological goods and services affected by cooling water intake

structurestructures at complyingregulated 316(b) facilities are modeled or monetized, suggesting that th e total benefits of regulat ion may be underestimated. For example, potential increases in ecosystem stability that might occur as a result of regulation is not explici tly estimated nor monetized.

 When particular ecological goods and servic es are monetized, data is not always available at the national level. For example, EPA was only able to estimate the nonuse benefits of impingement mortality and entrainment reductionstransfer for

onea species within the North and Mid-Atla ntic regions only, suggesting that nonuse values are significantly underestimated represents less than one percent of adverse environmental impacts

.

 For the proposed rule, EPA used a hab itat-based method to assess potential WTP for reducing fish mortality at CWIS ba sed on the approximate area of habitat required to produce and support the number of organisms lost to impingement mortality and entrainment. 177 EPA did not consider the habitat-based approach appropriate for primary analysis of bene fits for the proposed rule, and did not include it in its analysis for the final rule. However, itsthe results for the proposed

177 U.S. EPA. 2011. Environmental and Economic Benefits Analysis for the Proposed Section 316(b) Existing Facilities Rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 527 of 642 rule illustrate that total benefits may be substantially greater than benefits estimated using the methodologies described in Section D. Because EPA was able to only partially monetize nonuse benefits using the benefits transfer approach, EPA expects that the actual benefits will be greater than those presented here.

XI. Related Acts of Congress, Executive Orders, and Agency Initiatives A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review Under section 3(f)(1) of E.O. 12866 (58 FR 51735, October 4, 1993), this action is an economically significant regulatory ac tion because it is likely to have an annual effect of $100 million or more on the ec onomy. Accordingly, EPA submitted this action to the Office of Management and Budget for review under E.O. 12866 and 13563 (76 FR 3821, January 21, 2011), and any changes made in response to Office of Management and Budget recommendations have been doc umented in the docke t for this action. In addition, EPA prepared an analysis of the costs and benefits associated with this action; this analysis is discussed in detail in the Chapter 98 of the EA. A copy of itthe
EA is available in the docket for this action, and the analysis is briefly summarized here.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 528 of 642 Exhibit XI-1 (drawn from Table 9-1Chapter 8 of the EA) provides the results of the benefit-cost analysis. 178 Placeholders for option-specific nonmonetizednon-monetized benefits are represented by B P4 for Proposal Option 4, B FR for the final rule , and B P2 for Proposal Option 2. While preliminary, and not yet reviewed by EPA’s Science Advisory Board, the preliminary results of EPA’s stat ed preference survey (see BA, Chapter 11) suggest that B P4 , B FR , and B P2 have the potential to be si gnificantly different from zero. EPA is therefore using placeholders for addi tional benefits that are not captured by its analysis of use benefits and the be nefits transfer for nonuse benefits. However, EPA did not rely on the results of its stated preference survey in estimating th e benefits of today’s rule. EPA has concluded that the benefits of the rule justify the costs. EPA also analyzed the employment effect s of the final rule and other options considered in development of this rule. The results of that analysis are summarized in Section XIX .E of this preamble and EA Chapter 109 of the EA

.
Exhibit XI-1. Annualized benefits and costs of the regulatory options (in millions, 2011 dollars) a Option Total social costs b Benefits c Proposal Option 4 $ 261.7251.8 $ 20.231.0 + B P4

Final Rule – Existing and New Units $ 297.4274.9 $ 21.232.8 + B FR
Proposal Option 2 $3, 999.7643.2 -$1, 016.5 542.6 + B P2

178 The costs and benefits presented in this section as sume that facilities with impoundments will qualify as having closed-cycle recirculating systems in the baseline EPA also conducted the costs and impacts analysis where impoundments were not assumed to meet the definition of closed-cycle recirculating. EPA did not find that this assumption would change EPA’s final rule decision; see DCN 12-2501.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 529 of 642 a Social costs and benefits were annualized over 51 years and discounted using 3 percent rate.

b Total b Total social costs include compliance co sts to facilities and government ad ministrative costs. See EA Chapter 87

. C Benefits include social cost of carbon from changes in greenhouse gas emissions due to the final rule.
B. Paperwork Reduction Act The information collection requirements in this rule have beenwill be submitted for approval to the Office of Manageme nt and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. The supporting statement in EPA’s information collection request estimates the burden to permitted facilities; burden is defined at 5 CFR 1320.3(b). The 60-day comment period will be concurrent withcommence after publication of the final ruledraft ICR . The information collecti on requirements are not enforceable until they are approved by OMB approves them

. Today's rule requires several distinct types of information collection as part of the NPDES permit application. In general, the in formation will be used to assist EPA in regulating environmental impacts, namely impingement mortality and entrainment, at cooling water intake structures and to identify how a 316(b)cooling water intake structure

at an existing facility or a new unit at an ex isting facility will meet the impingement mortality and entrainment requirements. Toda y’s rule also require s other reporting and recordkeeping requirements to demonstrate and document compliance with the requirements. Compliance with the applicab le information collection requirements established under this fi nal rule is mandatory (see §§ 122.21(r), 125.136, 125.137, 125, and 138).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 530 of 642 EPA does not consider the specific data that will be collected under this final rule to be confidential bus iness information. However, if a respondent does consider this information to be confidentia l, the respondent may request that such information be treated as confidential. All confidential data submitted to EPA will be handled in accordance with 40 CFR 122.7, 40 CFR part 2, a nd EPA’s Security Manual Part III, Chapter 9, dated August 9, 1976. This final rule modifies regulations at § 122.21 to require each existing facilitiesfacility and new unitsunit at an existing facilitiesfacility to prepare and submit information as part of itsthe facility’s NPDES permit application. A detailed list of required data items is provided below. The total EPA estimates an average annual average burden for facilities of the634,596 hours for the final rule’s information collection requirements associated with the existing and new units provisions of th e final rule, is estimated at 725,379 hours for an average of 1,289 facilities during the first three years after promulgation of the rule. 179 Hence, the. Of this total, EPA estimates that 1,068 regulated facilities will incur an annual average reporting and recordkeeping burden of 588 hours per respondent (for a total of 627,666 burden hours). EPA estimates that Directors in 46 States and one territory with NPDES permitting authority, will incur an annual average burden for the

179 The 1,289 figure differs from the total regulated universe of 1,065 facilities and reflects different numbers of generators and manufacturers undertakin g activities related to information collection request (ICR) in each of the three years covered by this ICR.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 531 of 642 collection review, oversight, a nd administration of the rule, of information from facilities complying with the final rule is estima ted6,930 hours, or an annual average of 147 hours per permitting authority. Slight differences in calculations are due to be 543 hours per respondentrounding

. The corresponding estimatesestimate of costs other than labor (labor and nonlabor costs are included in the total cost of th e final rule discussed in Section IX of this preamble) during the first three years after pr omulgation of the rule is an annual average of $ 9.38.5 million. Non-labor costs in clude activities such as capital costs for sampling equipment, remote monitoring devices, laboratory services, photocopying, and the purchase of supplies. The burden and costs are for the information collection, reporting, and recordkeeping requirements for the thre e-year period beginning with the assumed effective date of this rule. Additional info rmation collection requirements will occur after this initial three-year period as (1) existing facilities will continue to gather and submit required permit application materials and (2) new un its at existing facilities commence operations and are issued permits. This burden will be counted in a subsequent information collection request. Information and studies to be submitted under this final rule (as required by §§ 122.21(r) and 125.95) by existing facilities and new units at existing facilities are listed below. For more information, see sectionSection VIII in the preamble.

 Source Water Physical Data (§ 122.21(r)(2))

 Cooling Water Intake Structure Data (§ 122.21(r)(3))*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 532 of 642  Source Water Baseline Biological Char acterization Data (§ 122.21(r)(4))

 Cooling Water System Data (§ 122.21(r)(5))

 Chosen Method of Complia nce with Impingement Mo rtality Standards (§ 122.21(r)(6))

 Performance Studies (§ 122.21(r)(7))

 Operational Status (§ 122.21(r)(8))

 Entrainment Characteriz ation Study (§ 122.21(r)(9))

 Comprehensive Technical Feasibility a nd Cost Evaluation Study (§ 122.21(r)(10))

 Benefits Valuation Study (§ 122.21(r)(11)) 180

 Non-Water Quality and Other Enviro nmental Impacts Study (§ 122.21(r)(12)) In addition to the information require ments of the permit application, NPDES permits normally specify monitoring and reporting requirements to be met by the permitted entity. Existing facilities and new un its at existing facilities are required to perform monitoring as determined by the re quirements in § 125.94 and in accordance with §§ 125.96 and 125.97. Finally, in accordance w ith § 125.95(e), facilities arerequiredare required to maintain records of all submissions that are part of its permit app lication for a minimum of five years. If the Director approves a request for reduced permit application studies

180 This study may be waived by the director.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 533 of 642 under § 125.95(a) or § 125.98(g), th e facility must keep records of all submissions that are part of a previous permit application for an additional five years. Also, facilities must keep record of all submissions that are pa rt of the permit reporting requirements for a periods of at least five years from the da te of permit issuance, in accordance with § 125.97(d). Burden is defined at 5 CFR 1320.3(b). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9. In addition, EPA is amending the table in 40 CFR part 9 of currently approved OMB control numbers for various regulations to list th e regulatory citations for the information requirements contained in this final rule. C. Regulatory Flexibility Act (RFA) The Regulatory Flexibility Act generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Proce dure Act or any other statute unless the agency certifies that the rule will not have a significant ec onomic impact on a substantial number of small entities. Small entities incl ude small businesses, small organizations, and small governmental jurisdictions.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 534 of 642 1. Definition of Small Entities and Estimation of the Number of Small Entities Subject to Today’s Final Regulation For EPA’s assessment of the impact of today’s final rule on small entities, small entity is defined as either a (1) a smal l business as defined by SBA (Small Business Administration) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a cit y, county, town, school district, or special district with a population of fewer than 50,000; or (3) a sma ll organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field. Federal or State entities owning regulated facilities are not small entities. EPA performed this assessment separately for the two classes of facilities and their owner entities—electric generators and manufacturers— that are subject to today’s rule. a. Electric Generators EPA followed the SBA criteria for identifying small, non-government entities in the electric power industry, as follows:

 For non-government entities with electr ic power generation as a primary business, small entities are those with total annual electric output less than 4 million MWh;were designated usi ng employment size thresholds specific to each 6-digit NAICS code.

 For government entities other than federalFederal or State governments, small entities are those with a population of fewer than 50,000.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 535 of 642  For entities with a prim ary business other than electric power generation, the relevant size criteria are based on revenue or number of employees by NAICS sector (see Exhibit XI-2).
Exhibit XI-2. NAICS codes and SBA entity size standards for entities that own electric generators with a primary business other than electric power generation

NAICS code NAICS description SBA size standard 212111 Bituminous Coal and Lignit e Surface Mining 500 employees 221210 Natural Gas Distribution 500 employees

331110 Iron and Steel Mills and Ferroalloy Manufacturing 1,000 employees

331315 Aluminum Sheet, Plate, and Foil Manufacturing 750 employees

333611 Turbine and Turbine Generator Set Units Manufacturing 1,000 employees
488320 Marine Cargo Handling $35.5 million in revenue 491110 Postal Service $7 million in revenue 522110 Commercial Banking $175 million in assets

523910 Miscellaneous Intermedia tion $7 million in revenue

524126 Direct Property and Casualty Insurance Carriers 1,500 employees

525910 Open-End Investment Fu nds $7 million in revenue

525990 Other Financial Vehicl es $7 million in revenue

541990 All Other Professional, Scientific, and Technical Services $14 million in revenue

551112 Offices of Other Holding Co mpanies $7 million in revenue

562212 Solid Waste Landfill $35.5 million in revenue

562219 Other Nonhazardous Waste Treatment and Disposal $35.5 million in revenue

562920 Materials Recove ry Facilities $19 mi llion in revenue*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 536 of 642 611310 Colleges, Universities, and Professional Schools $25.5 million in revenue

EPA conducted this analysis for the same se t of parent entities it analyzed in the general entity-level cost-to-revenue analysis discussed in Section IX.D. To determine whether these are small entit ies on the basis of the size criteria outlined above, EPA compared the relevant measure for the identifi ed parent entities to the appropriate SBA size criterion. EPA conducted this analysis us ing (1) facility-level weights without using entity-level weights, and (2) entity-level wei ghts without usin g facility-level weights (for information on these two weighting appr oaches, see Appendix H of the EA). EPA estimates that between 2031 and 3952 small entities own regulated facilities, representingelectric generators that ar e subject to the rule. They represent approximately 25 to 32 percent of all entities that own electric generators (see Exhibit XI-3).

Exhibit XI-3. Number of small entities that own electric generators, by ownership type

Ownership type a Using facility-level weights Using entity-level weightsweights b Total Small % Small Total Small % Small Cooperative 13 111 31.884.6 % 2221 718 31.885.7 %

Federal 1 0 0.0% 1 0 0.0%

Investor-owned 57 86 14.310.5 % 6360 97 14.311.7 %

Municipality 1519 7 48.636.8 % 3738 1819 48.650.0 %

Nonutility 2326 47 18.526.9 % 2730 58 18.526.7 %

Other Political Subdivision 4 0 16.70.0 % 6 0 0.0% State 3 0 0.0% 3 0 0.0% All Entity Types 116 123 20 31 25.2 % 159 39 52 24.532.7 %*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 537 of 642 a State and federalFederal entities are considered large.

b In addition to the 52 small parent entities on an unweighted basis, one additional entity is an “other political subdivision entity” for a total of 53. This entity owns only implicitly analyzed facilities; consequently, there is no explicitly analyzed entity in the other political subdivision ownership category to represent this implicitly analyzed small parent entity. As the result, weighted entity counts do not include one small other political subdivision entity.

b. Manufacturers EPA also used the SBA criteria for id entifying small, non-government entities in the manufacturing sector. Exhibit XI-4 lists th e SBA size threshold guidelines for entities that own manufacturers.
Exhibit XI-4. NAICS codes and SBA entity size standards for entities that own manufacturers*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 538 of 642 NAICS code NAICS description SBA size standard 111930 Sugarcane Farming $0. 75million75 million in revenue 113110 Timber Tract Operations $7 million in revenue

211111 Crude Petroleum and Natura l Gas Extraction 500 employees 212210 Iron Ore Mining 500 employees 212391 Potash, Soda, and Borate Mineral Mining 500 employees 221122 Electric Power Distribution 4, 000,000 MWh of electric generation 311221 Wet Corn Milling 750 employees 311314 Cane Sugar Manufa cturing 750 employees 311313 Beet Sugar Manufa cturing 750 employees 311942 Spice and Extract Manufacturing 500 employees 313210 Broadwoven Fabric Mills 1,000 employees 321113 Sawmills 500 employees 322121 Paper (except Newspr int) Mills 750 employees 322122 Newsprint Mills 750 employees 322130 Paperboard Mills 750 employees 322211 Corrugated and Solid Fiber Box Manufacturing 500 employees

322220 Paper Bag and Coated and Treated Paper Manufacturing 500 employees 322291 Sanitary Paper Product Manufacturing 500 employees
324110 Petroleum Refine ries 1,500 employees 324191 Petroleum Lubricating Oil and Grease Manufacturing 500 employees 325120 Industrial Gas Manufacturing 1,000 employees 325180 Other Basic Inorganic Chemic al Manufacturing 1,000 employees
325199 All Other Basic Or ganic Chemical Manufac turing 1,000 employees

325211 Plastics Material and Re sin Manufacturing 750 employees 325311 Nitrogenous Fertilizer Manufacturing 1,000 employees*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 539 of 642 325320 Pesticide and Other Agricultural Chemical Manufacturing 500 employees 325412 Pharmaceutical Preparatio n Manufacturing 750 employees 325510 Paint and Coating Manufacturing 500 employees

325992 Photographic Film, Paper, Plate and Chemical Manufacturing 500 employees

325998 All Other Miscellaneous Chemical Product and Preparation Manufacturing 500 employees

331110 Iron and Steel Mills and Ferr oalloy Manufacturing 1,000 employees

331210 Iron and Steel Pipe and Tube Manufacturing from Purchased Steel 1,000 employees 331221 Rolled Steel Shape Manufacturing 1,000 employees 331222 Steel Wire Drawing 1,000 employees 331313 Alumina Refining and Primary Al uminum Production 1,000 employees 331315 Aluminum Sheet, Plate and Foil Manufacturing 750 employees 331410 Nonferrous Metal (except Aluminum) Smelting and Refining 1,000 employees

332312 Fabricated Structural Me tal Manufacturing 500 employees 337910 Mattress Manufacturing 500 employees

339999 All Other Miscellaneous Manufacturing 500 employees

423310 Lumber, Plywood, Millwork, and Wood Panel Merchant Wholesalers 100 employees 423930 Recyclable Mate rial Merchant Whol esalers 100 employees

424510 Grain and Field Bean Merc hant Wholesalers 100 employees

424690 Other Chemical and Allied Products Merchant Wholesalers 100 employees

424710 Petroleum Bulk Stations and Terminals 100 employees

447190 Other Gasoline Stations $14 million in revenue 522220 Sales Financing $7 million in revenue

523910 Miscellaneous Intermediati on $7 million in revenue*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 540 of 642 523930 Investment Advice $7 million in revenue 524126 Direct Property and Casualty Insurance Carriers 1,500 employees

525990 Other Financial Vehicles $7 million in revenue 531110 Lessors of Residential Buildings and Dwellings $25 mi llion in revenue 551112 Offices of Other Holding Co mpanies $7 million in revenue

561110 Office Administrative Serv ices $7 millio n in revenue

Similar to the analysis conducted for electric gene rators, EPA conducted this analysis for the same set of parent entities as analyzed in the general , entity-level , cost-torevenue analysis discussed in Section IX.D. To determine which entities are small, EPA compared the relevant measure for the identifi ed parent entities to the appropriate SBA size criterion. EPA used two sample-weighting schemes in this analysis; these provide a range of counts of small enti ties that own regulated faciliti es and the number of regulated facilities that they own . that will incur costs under the final rule. EPA does not assessfind either of these sample-weighting schemes to be superior to the other in the quality of the resulting estimates of small entity counts and occurrence of impacts. The different weighting approaches reflect the fact that EPA used sample facilities for the impact analysis and lacks precise informati on on the profile of ownership of the total population of regulated manufacturers f acilities – in terms of the number of small entities owning regulated facilities and the number of regulated facilities that any small entity would own. EPA developed the weighting schemes using alternative bounding a ssumptions about the profile of ownership of regulated faciliti es by small entities. The weighting schemes provide lower and upper bound estimates of th e numbers of small entities, and the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 541 of 642 numbers of regulated facilities that they own, and accordingly, the number of small entities in each of the cost-to-revenue impact categories (for information on the weighting schemes, see Appendix H of the EA). From this analysis, EPA estimates that 17 to 52 small entities own regulated facilities in the six primary manufacturing industriesP rimary Manufacturing Industries , representing approximately 16 percent of all en tities that own regulated facilities in these industries (see Exhibit XI-5).Th e presence of small entities varies by industry sector.

Exhibit XI-5. Number of small entities that own regulated facilities, by industry

Industry Lower-bound estimate of number of entities that own regulated facilities Upper-bound estimate of number of entities that own regulated facilities

Total Small % Small Total Small % Small Aluminum 4 2 50.0% 11 4 40.6% Chemicals and Allied Products 30 5 16.7% 121 21 17.7% Food and Kindred Products 6 0 0.0% 20 0 0.0% Paper and Allied Products 37 7 18.9% 104 23 21.8% Petroleum Refining 16 2 12.5% 25 2 8.4%

Steel 13 1 7.7% 32 2 5.2% Multiple Industries a 4 0 0.0% 14 0 0.0% Primary Manufacturing IndustriesIndustries b – Total 110 17 15.5% 327 52 16.0%

a These are small entities that own regulated facilities from multiple industries.

b EPA was unable to extend from the survey responses to estimate th e total number of small entities owning regulated facilities in the Other Industries. Therefore, for the Other Industries, EPA reports small entity information only for the facilities and their owning entities as reflected in survey responses – this information involves no sample-weighting. As a result, the table reports the same number of small entities for Other Industries under each weighting approach. See EA Appendix H for more details.

cb EPA did not compile comparab le information for Other Industries facilities an d the entities that own them because it did not have a statistically valid sample of facilities from whic h to develop su ch estimates.

c. Total Number of Small Entitie s that Own Regulated Facilities*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 542 of 642 EPA estimates that between 3748 and 91104 small entities own regulated facilities in the electric powe r industry and six primary manuf acturing industries together. 2. Statement of Basis As described above, EPA began the sma ll entity impact assessment by first estimating the number of small entities in th e two industry segments subject to the final rule: electric generators and manufacturers. EPA next assessed whether these small entities would be expected to incur costs that constitute a significant impact and, finally, assessed whether those entities represent a substantial number of small entities. EPA summed annualized after-tax complian ce costs for regulate d facilities that

are estimatedassumed to be owned by a given small enti ty and calculated the costs as a percentage of entity revenue (cost-to-revenue test). EPA compared the resulting percentages to impact criteria of 1 and 3 percent of revenue. EPA assumed that small entities estimated to incur costs below 1 pe rcent of revenue will not face significant economic impacts, while small en tities with costs of at least 1 percent of revenue have a chance of facing economic impacts , and. EPA assumed that entities incurring costs of at least 3 percent of revenue have a higher likelihood of significant economic impacts. For both electric generators and manu facturers, EPA used sample-weighting approaches that provide a range of estimat es of the numbers of small entities and regulated facilities that they own. Exhibit XI-6 summarizes the Regulatory Fl exibility Act analysis results under both weighting approaches . for each regulated facilities segment. Overall, the RFA analysis for electric generators found that fewno small entities would potentially incur a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 543 of 642 significant impact under the final rule. Specifically, for electric generators, EPA estimates that zero to three small entities will incur co sts exceeding 1 percent of revenue, while no small entity will incur costs exceeding 3 pe rcent of revenue. Following EPA’s guidance on conducting RFA analyses, the number of small entities above the threshold as a percent of all small entities subject to the ru le are zero to 10 percen t at the 1 percent of revenue threshold, and zero percent at the 3 percent of revenue threshold. The findings for manufacturers are compar able. Specifically, EPA estimates that three to four small parent entities will incur co sts exceeding 1 percent of revenue, and zero to one small parent entity will incu r costs exceeding 3 percent of revenue. The associated percentages of small entities s ubject to the final rule are 8 percent to 18 percent at the 1 percent thres hold, and zero percent to 6 percen t at the 3 percent threshold. Combining the electric generators a nd manufacturers segments, EPA estimates that three to seven small entities will incur costs exceeding 1 percent of revenue, while zero to one small entity will incur costs exceeding 3 percent of revenue. Following EPA’s guidance on conducting RFA analyses , the associatedThe corresponding percentages of small entities above the threshold as a percent of all small entities subjectare 4 to the rule
are 18 to 2013 percent at the 1 percent of revenue threshold, and zero to 52 percent at the 3 percent of revenue threshold. The findings for manufacturers are comp arable, with very few small entities estimated to incur a significant impact under the final rule. Specifically, EPA estimates that four to five small parent entities will incur costs exceeding 1 percent of revenue, and zero to one small parent entity will incu r costs exceeding 3 percent of revenue. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 544 of 642 associated percentages of small entities s ubject to the final rule are 10 percent to 22 percent at the 1 percent thres hold, and zero percent to 6 percen t at the 3 percent threshold. Combining the electric ge nerators and manufacturers segments, EPA estimates that seven to11 small entities will incur costs exceeding 1 percent of revenue, while zero to two small entities incur costs exceeding 3 percent of revenue. The corresponding percentages of small entities ar e 11 to 19 percent at the 1 per cent threshold, and zero to 5 percent at the 3 percent th reshold. Based on EPA guidance for RFA analyses, EPA judges these composite findings to provide a basis for SISNOSE determinations. In summary, under the final rule, EPA es timates that a small number of small parent entities will incur a potentially signifi cant cost impact in the individual regulated industry segments, and overall, for both segments. The maximum number of small entities estimated to incur co sts exceeding 1 percent is 11seven , overall, with seventhree of these small entities in the electric generators segment a nd four in the manufacturers segment. The maximum number of small en tities with costs exceeding 3 percent is

twoone , overall, with oneno small entityentities in each of the electric generators segment and one small entity in the manufacturers segments. In each case, the maximum value reflects the high end of an uncertainty range that is based on different sample weighting approaches. EPA judges that values in the interior of these ranges represent more reasonable estimates of the number of small entities incurring significant impacts. The estimated numbers of entities with significant impacts also represent small percentages of the estimated number of small entities, overall, and in the individual segments. The
maximum percentage values at the 1 pe rcent of revenue threshold are 1913 percent,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 545 of 642 overall, 2010 percent for electric generators, and 18 percent for manufacturers. At the 3 percent threshold, the maximum percentage values are 52 percent, overall, 5zero percent for electric generators, and 6 percent for manu facturers. Again, these values reflect the high end of an uncertainty range. In view of these very modest impacts, EPA judges that the final rule is not consequential in terms of potential impacts for small entities.

Exhibit XI-6. Estimated cost-to-revenue impact for small entities that own facilities subject to the regulation

Regulatory optionRegulated Segment Cost impact category Cost ≥ 1% of revenue a Cost ≥ 3% of revenue a Number of small entities % of small regulated entities b Number of small entities c % of small regulated entities b Electric Generators 40 to 73 180 % to 2010 % 0 to 1 0% to 5% Manufacturers d 3 to 4 8% to 18% 0 to 1 0% to 6% Electric Generators and Manufacturers d 3 to 7 to11 114 % to 1913 % 0 to 21 0% to 52 %

a For both electric generators and manufacturers, EPA used sample-weighting approaches that provide a range of estimates of the numbers of small entities and regu lated facilities they own (see Section VII( D)(a)(iv) for manufact ures and see Section VII(D)(b)(1)(b) for electric generator weighting approaches).

b Percentage b Percentage of small entities incurring a cost-to-revenue impact involves range estimates in both the numerator (number of affected entities) and denominator (number of regulated entities).

c Entities c Entities with cost-to-revenue ratios of at least 3 percent are included in the number of entities with cost-to-revenue such ratios of at least 1 percent.

d Entity d Entity counts used in these calculations exclude manufacturers in other industries. EPA estimated that one small parent entity that owns regulated fac ilities in other industries would incur costs exceedin g 1 percent of revenue.

3. Certification Statement Given these findings of very small absolute numbers of small entities estimated to incur significant impacts under the final rule , and low percentages of estimated small entities incurring impacts, EPA concludedI certify that the final rule will not have “a*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 546 of 642 significant impact on a substantial number of small entities” (no SISNOSE), overall and by individual industry segment. D. Unfunded Mandates Reform Act (UMRA) Title II of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, requires federalFederal agencies, unless otherwise prohib ited by law, to assess the effects of their regulatory actions on State, local, and Tribal govern ments and the private sector. Today’s rule contains a federalFederal mandate that may result in expenditures of $100 million or more forby State, local, and Tribal governments, in the aggregate, or the private sector, of $100 million or more (adjus ted annually for inflation) in any one year. Accordingly, under Unfunded Mandates Refo rm Act section 202, EPA has prepared a written statement, which follows below (see Chapter 1211 of the EA). 1. Summary of Written Statement a. Authorizing Legislation Today’s rule is issued under the authority of CWA sections 101, 301, 304, 306, 308, 316, 401, 402, 501, and 510, (33 U.S.C. 1251, 1311, 1314, 1316, 1318, 1326, 1341, 1342, 1361, and 1370). For detailed information on th e legal authority of this rule, see Section III of this preamble. b. Benefit-Cost Analysis As described above, the costs, benefits and economic impacts reported in this section may be underestimated due to EPA’s assumption that facilities with impoundments will qualify as having closed-cyc le recirculating systems in the baseline and thus, unless additional controls are requir ed to protect listed species, will incur no*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 547 of 642 technology-related costs. Likewise, for this an alysis, because these f acilities are assumed not to install compliance technology, EPA also assumed they would achieve no benefits. Accordingly, the benefits reported in this section may be underestimated, based on the assumption of no technology installati on for facilities with impoundments. 181 The existing and new unitsunit provisions of today’s rule are expected to have total annualized pre-tax (social) costs of $ 297.4274.9 million. These costs include direct costs incurred by facilities and im plementation costs incurred by federalFederal , State, and local governments. The total monetized use and nonuse benefits of the final rule, accounting for the existing and new unitsunit provisions, are estimated to be $ 37.2 32.8 million. 182 Thus, the total social costs exceed the tota l monetized benefits of the final rule by $260.2 million for the final rule. EPA notes that these differences are based on a comparison of a partial measur e of benefits with a more complete measure of costs; therefore, the results must be interpreted with caution. For a more detailed comparison of the costs and benefits of the final rule, see Chapter 98 of the EA. EPA notes that States may be able to us e existing sources of financial assistance to revise and implement today’s rule. CWA section 106 authorizes EPA to award grants to States, Tribes, intertribal c onsortia, and interstate agenci es for administering programs

181 This factor in potential underestimation of benefits is separate from other considerations that likely lead to benefits underestimation, as described in this section and in the EA and BA reports. 182 Both cost and benefit values were annualized over 51 years and discounted at 3 percent. Values include costs and benefits estimated for new units. EPA was able to estimategenerated partial estimates of nonuse benefits only for one resource changes for a species in two coastal benefit regionsthat represents less than one percent of adverse environmental impacts s

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 548 of 642 for the prevention, reduction, and elimination of water pollution. These grants may be used for various activities to develop and carry out a wa ter pollution control program, including permitting, monitoring, and enforcemen t. Thus, State and Tribal NPDES permit programs represent one type of State program that can be funded by CWA section 106 grants. c. Summary of State, Local, and Tribal Government Input EPA consulted with State governments and representatives of local governments in developing the rule. The outreach activities are di scussed in XXX.The outreach activities are discussed in Section III.A.3 of the preamble to the proposed rule (see 76 FR 22268, April 20, 2011) and Chapter 2 of the TD D. EPA has also conducted additional outreach since the proposed rule, including seve ral conference calls with the Association of Clean Water Administrators (inclu ding numerous states) and small business representatives (including so me local government officials). EPA also combined its efforts and collected input from State and lo cal government entitie s during development of the proposed Effluent Limitations Guide lines and Standards for the Steam Electric Power Generating Point Source Category, whic h shares many of the same affected facilities as today’s final rule; see 78 FR 34530 (June 7, 2013) for more information. State and local officials attended numerous s ite visits with EPA’s staff, enabling EPA to gather their input; see DCNs 10-6510, 10-6518, 10-6520, 10-6521, 10-6523 and 10-6524. EPA also responded to requests for info rmation from multiple State and local governments. EPA also attended conferences and participated in workgroups (such as NARUC’s 2013 Winter Committee Meetings) wh ere additional information about State*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 549 of 642 and local government interests were presen ted. Historically, EPA has also conducted a great deal of outreach in deve loping the previous 316(b) regula tions over the past decade; for example, see the Phase I final preamble (66 FR 65331, December 18, 2001), the Phase II final preamble (69 FR 41677, July 9, 20 04), and the Phase III final preamble (71 FR 35037, June 16, 2006). d. Regulatory Option Selected EPA considered and analyzed several regu latory options to determine the best technology available for minimizing advers e environmental impact. These regulatory options are discussed in Secti on VI of this preamble. These options included a range of technology-based approaches including, from impingement mortality technology at all facilities with a DIF of greater than 50 mgd, to additionally requiring additional impingement mortality controls and intake fl ow commensurate with closed-cycle cooling for all facilities. As discussed in detail in Section VI, EPA di d not select options exclusively because they are the most cost -effective among the options that fulfill the requirements of section 316(b). EPA selected the final rule because it meets the requirement of CWA section 316(b) that th e location, design, constr uction, and capacity of cooling water intake structures reflect the best technology available for minimizing adverse environmental impacts. In addition, EPA has determined that the benefits of the final rule justify the costs, taking into acc ount quantified and qualitative benefits and

costs. The final rule reflectsEPA selected a flexible approach for the final rule from among the options considered; it allows consideration of costs and benefits on a site-*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 550 of 642 specific basis in determining BTA for reducing entrainment and has flexible requirements for reducing impingement mortality. 2. Impact of Compliance Requirements on Small Governments This rule is not subject to Unfunded Mandates Reform Act section 203 requirements because it contains no regulator y requirements that could significantly or uniquely affect small governments (i.e., gove rnments with a population of fewer than 50,000). For its assessment of the impact of compliance requirements on small governments, EPA compared the estimated tota l costs and costs per facility that small governments would incur with the costs that large governments would incur. EPA also compared costs for regulated facilities owne d by small-government entities with costs of regulated facilities owned by non-government entities. The Agency evaluated costs per facility on the basis of bo th average and maximum annualized cost. The costs for facilities owned by small government entities wereare less than those estimated for facilities owned by large government entities , or for facilities owned by small or large non-government entities. On this basis, EPA concludedinterprets these findings to indicate that the compliance cost requirements of today’sfinal rule will not significantly

or uniquely or disproportionately affect small governments. Because no manufacturer is government-o wned, EPA conducted this analysis for electric generators only. a. Government-Owned Electric Generators by Ownership and Entity-Size Category Exhibit XI-7 provides an estimate of the number of non-federal government entities that own electric gene rators, by ownership type and size of government entity. As*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 551 of 642 presented in Exhibit XI-7, 27 large government entities own 45 elec tric generators, and 19 small government entities own 19 electric generators. Of the 64 facilities that are owned by government entities, 47 are owned by municipalities, 11 are owned by States, and 6 are owned by other political subdivision s. No regulated facility is owned by a Tribal government.
Exhibit XI-7. Number of government entities and government-owned electric generators Ownership type Exhibit XI-7 provides an estimate of the number of non-Federal government entities that own electric generators, by ownership type and size of government entity. As presented in Exhibit XI-7, large government entities own 45 electric generators, and small government entities own 20 electric generators. Of the 65 facilities owned by government entities, 48 are owned by municipalities, six are owned by States and 11 are owned by other political subdivisions. Tribal governments own no regulated facilities.

Exhibit XI-7. Number of government entities a -owned electric generators, by Size of Government a Number of facilities b c

Entity Type Large Small Tota l Large Smal l Total Deleted C Deleted C

Split Cell s Deleted C Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 552 of 642 Municipality 1 9 18 37 29 1819 4748

State Government 56 10 6 1 0 1 1 1 Other Political Subdivision 310 01 311 6 0 6
Tribal Government 0 0 0 0 0 0

Total 2 7 19 46 45 1920 6465

a Counts of entities that own explicitly and implicitly analyzed electric generators; these are not weighted entity counts. For details see EA Appendix H.

b Counts a Counts of explicitly and implicitly analyzed electric generators; these are not weighted estimates. For details , see EA Appendix H.

c Facility size is the size of its parent entity.

b. Compliance Costs for Electric Generato rs Owned by Small Government Entities Exhibit XI-8 presents total, average annualized compliance costs, and maximum annualized compliance costs of the final rule for regulated facilities owned bygovernment (State, local, and Tribal governments) and non-government entities by entitysize category. For the existing unitsunit provision of the final rule, EPA estimates that small government entities will incu r a total annualized cost of $2. 86 million, which is less thancompared to the total cost of $ 7.28.6 million incurred by large government entities or the total cost of $9.2and $8.5 million incurred by small privat e entities. On a per facility basis, EPA estimates that a facility owned by a small government entitiesentity will on average incur a cost of less than $0.2 million with a maximum of $0.5 million. These costs are less than those estimated The Agency estimates that for facilitiesa facility owned by either large government entities (more thanentity, the average cost of the Deleted C Deleted C Deleted C Deleted C Deleted C Deleted C
Deleted C Deleted C Deleted C*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 553 of 642 existing provision of the final rule will be $0.2 million per facility with a maximum of $1. 23 million ) or, while for a facility owned by a small private entities ($entity the average cost will be $ 0. 42 million per facility with a maximum of $ 2. 1 .4 million ).. 183 Again, overall, EPA therefore concludes that the compliance requirements of the existing unitsunit provision of today’s rule do not signi ficantly or uniquely affect small governments in comparison to either large gov ernments or small private entities. For details of this analysis, see the EA Chapter 1211

. Exhibit XI-8. Electric generators an d compliance costs by ownership type and size (in millions, 2011 dollars)

Ownership type Entity size Number of facilities (weighted) a Total compliance costs Average cost per facility d Maximum facility cost e Final Rule Government (excluding federalFederal ) Small 16 $2. 86 $0.2 $0.5

Large 3237 $ 7.28.6 $0.2 $1. 23

Private b Small 2353 $ 9.28.5 $0. 42 $ 2. 1 .4

Large 45942 3 $ 263.0184.3 $0. 64 $ 105 .0

All Facilities c 544 $ 296.7220 $0. 54 $ 105 .0

183 Excluding federalFederal government entities and regulated facilities they own.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 554 of 642 Ownership type Entity size Number of facilities (weighted) a Total compliance costs Average cost per facility d Maximum facility cost e

a Facility counts are weighted estimates and differ from the values reported in Exhibit XI-7, which are un-weighted counts and reflect information for both explicitly and implicitly analyzed electric generators. Sample-weighted values are reported in thi s table because costs were developed only for the explicitly analyzed electric generators. For details on development of sample weights, see EA Appendix H.

b Facility counts and cost estimates reported for the private sector include 28 facilities owned by rural electric cooperatives.

c Facility counts and cost estimates reported for All Facilities include 14 facilities ow ned by the federalFederal government and costs estimated for these facilities.

d EPA calculated average cost per facility using the total number of regulated facilities owned by entities in a given ownership category.

e Reflects maximum of un-weighted costs to explicitly analyzed facilities only.

3. Administrative Costs Section 316(b) requirements are im plemented through the NPDES permit program. EPA estimates that 46 States and one territory—the relevant jurisdictions with NPDES permitting authority under CWA sectio n 402(b)—will incur costs to administer the final rule. 184 EPA estimates that States and territories will incur costs for implementing the requirements of today’s rule in four activity categories: (1) start-up activities to learn and unders tand the requirements of today’ s regulation and to implement administrative structures and procedures for administering the regulation; (2) firstinitial permit issuance activities; (3) annual activities , including monitoring, reporting and recordkeeping ; and (4) non-annually recurring permit -related activities. Exhibit XI-9

184 Federal government permitting authorities will also incur costs to administer the rule. As stated earlier in this section, consistent with UMRA analysis requirements, EP A did not account for costs to federalFederal entities in the UMRA analysis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 555 of 642 presents total annualized costs for each t ype of administrative activity. EPA estimates that State and local government entitie s will incur annualized costs of $ 1. 0 .9 million to administer the final rule for electric generators and manuf acturers. Monitoring , reporting and recordkeeping costs compose the largest sh are of administrative costs.
Exhibit XI-9. Annualized government admini strative costs (in millions, 2011 dollars) Cost

Activity Electric generators Manufacturers Total Start-up Activities NA NA $0.0 a

FirstInitial Permit Issuance Activities $0.2 $0.2 $0.4

Annual Monitoring , Reporting and Recordkeeping Activities $0. 32 $0.2 $0.5

Non-Annually Recurring Permit-Related ActivitiesActivities b $0.0 b $0.0

b $0.1

Total $0. 65 $0.4 $ 1. 0 .9

a Costs associated with start-up activities are estimated for both Electric Generatorselectric generators and Manufacturersmanufacturers ; these costs are less than $20,000.

b Costs are less than $50,000. E. Executive Order 13132: Federalism Under E.O. 13132, EPA may not issue an action that has federalism implications, that imposes substantial direct compliance co sts on the State and local governments, and that is not required by statute, unless the federalFederal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the final rule.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 556 of 642 The final rule does not have federalism im plications. It will not have substantial direct effects on the States, on the relations hip between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in E.O. 13132.This fi nal rule would not alter the basic StatefederalFederal scheme established in the CWA unde r which EPA authorizes States to carry out the NPDES permitting program. Prior to this rule, authorized States were required to issue NPDES permits including requirements for CWISs on a case-by-case BPJ basis. 40 CFR. 125.90(b). EPA expects that today’s rule will have little to no effect on the relationship between, or the distribut ion of power and responsibilities among, the federalFederal and State governments. EPA estimated the rule’s burden on State and local governments. EPA estimates an average annual burden of $ 1. 0 .9 million, for StatesState and local governments to collectively administer the existing and new units provisi onsunit provision of the final rule. 185 The rule will also impose a compliance cost burden on State and local governments, if those government entities own f acilities that are subj ect to today’s rule. EPA has identified 48554 regulated facilities that are ow ned by State or local government entities; the Agency estima tes that under the existing unitsunit provision of the final rule these facilities will incur an average annual compliance cost of approximately $0.2

185 This estimate does not include costs to administer the new unit provision of the final rule; however, EPA expects these costs to be small.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 557 of 642 million per facility. 186 ThusBecause this rule does not have federalism implications , the requirements of section 6 of E.O .13132 do not apply to this rule. F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments This action does not have tribalTribal implications, as specified in E.O. 13175 (65 FR 67249, November 9, 2000). It would not have substantial direct effects on tribalTribal governments, on the relationship between the federalFederal government and the Tribes, or the distribution of power a nd responsibilities between the federalFederal government and Tribes as specified in E.O. 13175. The national cool ing water intake structure standards would be implemented through perm its issued under the NPDES program. No tribalTribal governments are authorized pursuant to CWA section 402(b) to implement the NPDES program. In addition, EPA’s analyses show that tribalTribal governments own no facilities subject to today’s rule; thus, this rule does not affect Tribes in any way now or in the foreseeable future. Thus, E.O. 13175 does not apply to this action. G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks This action is not subject to E.O. 13045 because it does not establish an environmental standard intended to mitigate hea lth or safety risks. This rule establishes

186 Cost values were calculated over the 51-year analysis pe riod used for analysis of social costs, discounted and annualized using a rate of 7 percent (see EA Chapters 87 and 1211 ).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 558 of 642 requirements for cooling water intake structures to protect aquatic organismsthe environment

. H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use E.O. 13211 (66 FR 28355, May 22, 2001) requires EPA to prepare and submit a Statement of Energy Effects to the Admini strator of the Office of Information and Regulatory Affairs, Office of Management and Budget, for actions identified as significant energy actions. On the basis of the Office of Management and Budget’s guidance for assessing the potential energy impact of regulations, 187 the Agency does not anticipateanticipates that today’s rule willmay have a significant adverse effect on the supply, distribution, or use of energy ;, thus , it will not constitute requiring EPA to include

a significant regulatory ac tion under E.O. 13211Statement of Energy Effects

. The Agency assessed the energy effects of today’s rule, speci fically, the rule’s effect on energy supply, distribut ion or use in the electric po wer sector, as required under E.O. 13211. In its energy-effects assessment, EPA relied on Integrated Planning Model (IPM) analyses undertaken by EPA for the proposed rule, specifical ly Proposal Option 1, which aligns closely with the final rule in terms of the required performance standards. Asfinal rule. Based on that analysis, described in Section IX .( D .3)(1)(d) of this preamble (Assessment of the Impacts in the Context of Electricity Markets ), EPA used IPM

187 http://www.whitehouse.gov/omb/memoranda/m01_27.html.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 559 of 642 analysis results from the proposed rule) and in more detail in supporting its decisions concerning the final rule. Based on the analysis for Proposal Option 1Chapter 6 of the EA report , EPA finds again that the final rule’s compliance requirements would not cause effects in of the fi nal rule may affect the electric power sector in ways that would constitute a significant a dverse effect under E.O. 13211 . As discussed in Section IX.D.3, the Agency’s analysis found that Propos al Option 1 would not reduce electricity production in excess of 1 billion kWh hours per year (or one thousand GWh) or in excess of 500 MW of installed capaci ty and, therefore, would not constitute a significant regulatory action under E.O. 13211. EPA assesse s that the earlier findings from IPM provide insight into the energy effects of today’s rule; indeed , because of the final rule’s lower cost, operational effects , and greater flexibility in compliance schedule, compared to Proposal Option 1, EPA assesse s that the final rule woul d have lower energy effects than Proposal Option 1 and therefore will not ca use a significant adverse effect as defined under E.O. 13211.thus includes a Statement of Energy Effects in the economic analysis. The Agency’s analysis found that the final rule will not reduce electricity production in excess of 1 billion kWh hours per year (or one thousand GWh), will not increase the cost of energy production in excess of 1 percent, will not increase dependence on foreign supply of energy, and will not significantly affe ct domestic coal production. However, the final rule will result in net retirement of 998 MW of generating capacity, which exceeds 500 MW of installed capacity, the threshold of significant adverse effect identified in the OMB Implementation Guidance for E.O. 13211. EPA notes that, with only one exception, these re tirements involve older, less efficient*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 560 of 642 generating units with very low capacity uti lization rates. The 998 MW of net retired capacity is replaced by 589 MW of new cap acity; therefore, because older and less efficient capacity is replaced by new, more energy-efficient, and less polluting capacity, these retirements mean that 409 MW less capacity is needed to fulfill the same demand. For more detail on the estimated energy eff ects of the final rule, see Chapter 12 of the EA, which is in the public docket. I. National Technology Transfer and Advancement Act Section 12(d) of the Nati onal Technology Transfer and Advancement Act of 1995, Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regul atory activities unless doing so would be inconsistent with applicable law or otherwise impractical. Vo luntary consensus standards are technical standards (e.g., materials speci fications, test methods, samp ling procedures, and business practices) that are de veloped or adopted by voluntary consensus standards bodies. The National Technology Transfer and Advancemen t Act directs EPA to provide Congress, through the Office of Management and Budget, explanations when the Agency decides not to use available and applicable voluntary consensus standards. This final rulemaking may involve technica l standards, for example, in measuring impingement and entrainment. Nothing in th is final rule would prevent the use of voluntary consensus standards for such measurements. EPA encourages permitting authorities and regulated enti ties to use voluntary consensus standards, where they are available.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 561 of 642 J. Executive Order 12898: Federal Actions to Address Environm ental Justice in Minority Populations and Low-Income Populations E.O. 12898 (59 FR 7629, February 16, 1994) establishes federalFederal executive policy on environmental justice. Its main provision directs federalFederal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, dispr oportionately high and adverse human health or environmental effect s of their programs, policies, and activities on minority populations and low-income populations in the United States. EPA has determined that today’s rule will not have disproportionately high and adverse human health or environmental eff ects on minority or low-income populations. Specifically, the final rule incr eases the level of environmenta l protection for all affected populations and has no high and adverse human health or environmental effects on any population, including any minority or low-inco me population. Because EPA expects that this final rule will help to preserve the health of aquatic ecosystems near regulated facilities, EPA expects th at all populations, includi ng minority and low-income populations, will benefit from im proved environmental conditions. To meet the objectives of E.O. 12898, EP A assessed whether today’s rule could distribute benefits among population subgr oups in a way that is significantly unfavorableless favorable to low-income and minority populations. EPA compared key demographic characteristics of affected substate populations to those demographic characteristics at the State level. If EPA ha d found that the demogr aphic profile of the substate benefit population is composed of a significantly lower share of low-income*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 562 of 642 and/or minority populations than the Stat e’s general population, EPA might have assessed the final rule as yielding an unfavorable distribution of benefits, from the perspective of the public policy principles of E.O. 12898. The two sets of demographic variables of interest for this environmenta l justice analysis are race and ethnicity, and annual household income, which are the vari ables in the Fish Consumption Pathway Module that best capture th e minority and low-income aspects of the affected populations. 188,189 EPA compared variable averages at the substate and State levels to determine whether the demographic profile of the affected population is consistent with the State profile (for details, see EA Chapter 1312 ). The comparison of minority popul ations affected by the regu lated facilities to the affected States’ overall populations showed no statistically significant difference between these groups. While low-income populations constitute a lower fraction of the benefit population than of the State’s overall populat ion in many States, the two groups are not significantly different. EPA thus determined th at the final rule does not systematically discriminate against, or exclude or deny participation of, the lower income population

188 Annual household income data in the FCP Module are available for the following categories: less than $10,000; $10,000 to $19,999; $20,000 to $24,999; $2 5,000 to $29,999; $30,000 to $34,999; $35,000 to $39,999; $40,000 to $49,999; $50,000 to $74,999; $75,000 to $99,999; and more than $100,000. For this analysis and previous 316(b) rule analyses, these categories were combined into low- and not low-income groups based on the U.S. Department of Health and Human Services’ poverty guidelines for a family of four living in the contiguous United States or D.C. The current (2013) poverty guideline is $23,550, which falls near the upper end of the $20,000 to $24,999 income range (U.S. HHS, 2013). For the current analysis, EPA used $25,000 as the threshold for separating populations into low- and not low-income groups. 189 Race and ethnic categories used in the analysis in clude white non-Hispanic, white Hispanic, black or African American, Asian or Native Hawaiian or Othe r Pacific Island, and Amer ican Indian and Alaska Native.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 563 of 642 group or the minority population group in the be nefits of the final rule in a way that would be contrary to the intent of E.O. 12898. Overall, EPA thus concluded that the final rule is consistent with the policy intent of E.O. 12898. An ecdotally, minority (e.g., Native American) and low-income populations might be more likely to include a larger proportion of subsistence fishermen. Because this rule will increase a bundance of all fish species in the areas affected by cooling wate r intakes, it might provide a benefit to subsistence fishermen. To the extent that minority and low-income populations are overrepresented in this group, they might especially benefit from this rule. K. Executive Order 13158: Marine Protected Areas E.O. 13158 (65 FR 34909, May 31, 2000) requi res EPA to “expeditiously propose new science-based regulations, as necessary, to ensure appropri ate levels of protection for the marine environment.” EPA may take act ion to enhance or expand protection of existing marine protected areas and to esta blish or recommend, as appropriate, new marine protected areas. The purpose of this executive order is to protect significant natural and cultural resources in the marine environment, which means “those areas of coastal and ocean waters, th e Great Lakes and their connecting waters, and submerged lands thereunder, over which the United Stat es exercises jurisdiction, consistent with international law.” Today’s rule recognizes the biological sensi tivity of tidal rivers, estuaries, oceans, and the Great Lakes, and their susceptibil ity to adverse environmental impacts from cooling water intake structures. The rule provides requirements to minimize adverse environmental impacts for cooling water intake structures on these types of waterbodies.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 564 of 642 EPA used GIS data of the locations of MPAs (Marine Protected Areas) from the national MPA program ( http://www.mpa.gov/helpful_resources/inventory.html ) to locate regulated facilities in MP As. Under the final rule, 60percent60 percent of regulated facilities in MPAs obtain reducti ons in impingement mortality. As noted above, because of EPA’s assumption that facilities with impoundments will not need to install compliance technology, this may be an underestimate. EPA cannot estimate reductions in entrainment because they would be based on site-specific determinations of BTA. Therefore, EPA expects that today’s rule will advance the objective of the executive order to protect marine areas. For more detail s on this analysis a nd analysis results, see
EABA Chapter 138

. L. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgati ng the rule must submit a rule report, which includes a copy of the rule, to each House of the Congr ess and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prio r to publication of the rule in the Federal Register. A Majormajor rule cannot take effect until 60 da ys after it is published in the Federal Register. This action is a “major rul e” as defined by 5 U.S.C. 804(2). This rule will be effective [ INSERT DATE 60 DAYS AFTER DA TE OF PUBLICATION IN THE FEDERAL REGISTER]

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 565 of 642 EO12866_Cooling Water Intakes_2040_Final_Rule_20130722 List of Subjects
40 CFR Part 122 Environmental protection, Admi nistrative practice and proced ure, Confidential business information, Hazardous substances, Reporting and recordkeeping requirements, Water pollution control. 40 CFR Part 125 Environmental protection, Coo ling water intake structure, Reporting and recordkeeping requirements, Waste treatment and disposal, Water po llution control.

Dated:

_____________________ XXXGina McCarthy , Administrator.

For reasons set out in the preamble, Chapte r I of Title 40 of the Code of Federal Regulations is amended as follows:

PART 122--EPA ADMINISTERED PE RMIT PROGRAMS: THE NATIONAL POLLUTANT DISCHARGE ELIMINATION SYSTEM 1. The authority citation for part 122 continues to read as follows: AUTHORITY: The Clean Water Act, 33 U.S.C. 1251 et seq

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 566 of 642 2. The suspension of 40 CFR 122.21(r)(1)(ii) and (r)(5), published on July 9, 2007 (72 FR 37109) is lifted. 3. Section 122.21 is amended as follows: a. Revising paragraph (r)(1)(i )). b. Revising paragraph (r)(1)(ii).

c. Revising paragraphs (r)(2) introductory te xt, (r)(2)(i) though (iii), and (r)(3) through (5). d. Adding paragraphs (r)( 4)(ix) through (r)(4 )(xii), replacing paragraph (r)(5), and adding paragraphs and (r)( 6) through (r)(14). § 122.21 Application for a permit (applic able to State programs, see § 123.25).
* * * * * (r) * * * (1) * * * (i) New facilities with new or modified cooling water intake structures . New facilities (other than offshore oil and gas extraction facilities) with cooling water intake structures as defined in part 125, subpart I of this chapter, must subm it to the Director for review the information required under paragraphs (2) (except (r)(2)(iv)), ( 3 ,), and ( 4 ) (except (r)(4)(ix), (r)(4)(x ) ), (r)(4)(xi), and (r)(4)( xixii )) of this section and § 125.86 of this chapter as part of the permit application. *New offshore oil and gas extraction facilities with cooling water in take structures as defined in part 125, subpart N, of this chapter that are fixed facilities must submit to the Director for review the information required under paragraphs (r)(2) (except (r )(2)(iv)), (3), and (4) (except (r)(4)(ix),*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 567 of 642 (r)(4)(x), (r)(4)(xi) and (r)(4)(xii)) of this section and § 125.136 of this chapter as part of their permit application.* * * (ii) Existing facilities

. (A) All existing facilities

. as defined at 125.92 subject to the requirements of 125.94. The owner or operator of an existing facility that operates or intends to operate a closed-cycle recirculating system as defi ned at 40 CFR 125.92 mu st provide only the information required under paragraphs (r)(2), (3), (4), (5), (6), and (8 ) of this section. All other owners or operators of an existing f acility must submit the information described below. defined at 40 CFR 125.92(k) (A) All existing facilities

. The owner or operator of an existing facility must submit to the Director for review the information required under paragraphs (r)(2 ), (3), () and (3) and applicab le provisions of paragraphs ( 4), (5), (6), (7) and (8) of this section. (B) Existing facilities grea ter than 125 mgd AIF. In addition ., the owner or operator of an existing facility that withdraws greater than 125 mgd actual intake flow (AIF), as defined at 40 CFR 125.92 , (a), of water for cooling purposes must also submit to the Director for review the in formation required under paragraphs (r )(7),) (9), (10), (11), (12), and (13) of this section. In addition, unless waived by the Director, this owner or operator must also submit the info rmation required under paragraph (r)(11). Alternatively, the owner or operator may c hoose not to provide the information under paragraphs (r)(7), (9), (10), (11) , (12) and (13), for example, ifIf the owner or operator of an existing facility choosesintends to comply with the BTA (best technology available)*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 568 of 642 standards for entrainment using a closed-cycle recirculating system . In the absence of this information, the Director will base the site-s pecific entrainment requirement on a closedcycle recirculating system. as defined at 40 CFR 125.92(c), the Director may reduce or waive some or all of the information re quired under paragraphs (r)(9) to (13). (C) Additional information . The owner or operator of an existing facility must also submit such additional information as the Director determines is necessary pursuant

to 40 CFR 125.98(i). (D) New units at existing facilities. The owner or operator of a new unit at an existing facility, as defined at 40 CFR 125.92 ,(u), must submit or update any information previously provided to the Director by submitting the information required under paragraphs (r)(2), (3), ( 4), ( 5), (8), (14) and applicable provisions of paragraphs (r)( 4), ( 6) and ( r)( 7). Requests for and approvals of alternative requirements sought under 40 CFR 125.94(e)( 4) 2) or 125.98(b)(7) of this chapter must be submitted with yourthe permit application. (E) New units at existing facilities not previously s ubject to part 125. The owner or operator of a new unit as defined at §40 CFR 125.92 (u) at an existing facility not previously subject to part 125 th at increases the total capacity of the existing facility to more than 2 mgd DIF must submit the inform ation required under paragraphs (r)(2), (3), ( 4), ( 5), (8) and applicable provisions of (r)( 4), ( 6) and (7) of this se ction at the time of the permit application for the new unit. In addition, the owner or operator of new units at existing facilities must submit to the Director the information required under paragraphs (r)(9), (10), (11), (12), and ( 13) at the time of the permit a pplication for the new unit if*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 569 of 642 the additional capacity will result in the exis ting facility withdrawing greater than 125 mgd AIF. Requests for alternative requirements under 40 CFR 125.94(e)( 42) or 125.98(b)(7 ) of this chapter must be submitted with your permit application.the permit application. If the total capaci ty of the facility will increas e to more than 125 mgd AIF, the owner or operator must al so submit the information requi red in paragraphs (r)(9) to (13). If the owner or operator of an exis ting facility intends to comply with the BTA (best technology available) standards for entr ainment using a closed-cycle recirculating system as defined at 40 CFR 125.92(c), the Dire ctor may reduce or waive some or all of the information required under paragraphs (r)(9) to (13). (F) If the owner or operator of an exis ting facility plans to retire the facility before the current permit expires, then the requirements of paragra ph (r)(1)(ii)(A), (B), (C), (D) and (E) do not apply. (G) If the owner or operator of an exis ting facility plans to retire the facility after the current permit expires but within one permit cycle, then the Director may waive the requirements of paragraphs (r)(7), (9), (10), (11), (12) and (13) pending a signed certification statement from the owner or opera tor of the facility specifying the last operating date of the facility. (H) All facilities. The owner or operator of any existing facility or new unit at any existing facility must also submit with its permit application all information received as a result of any communication with a Field Office of the Fish and Wildlife Service and/or Regional Office of the Natio nal Marine Fisheries Service.
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Page 570 of 642 (4) * * * (ix (ix) In the case of the owner or operator of an existing facility or new unit at an existing facility, the Source Water Baseline Biological Characterization Data is the information in (i) through (xii). (x ) For the owner or operator of an existi ng facility, identification of protective measures and stabilization ac tivities that have been impl emented, and a description of how these measures and activitie s affected the baseline water condition in the vicinity of the intake. ( xxi ) For the owner or operator of an existi ng facility, a list of fragile species, as defined at 40 CFR 125.92 ,(m), at yourthe facility. YouThe applicant need only identify those species not already identifi ed as fragile at 40 CFR 125.92 .(m). New units at an existing facility are not required to resubmit this information if the cooling water withdrawals for the operation of the new unit isare from an existing intake. ( xixii ) For the owner or operator of an existing facility subject to 40 CFR part 125, subpart J, of this chapter, whosethat has obtained incidental take exemption or authorization for its cooling water intake is within the range of habitat of one or more federally listed threatened or endangered spec ies, a certification that the information at 122.21(r)(4)(vi) was sent directly to the rele vant regional offices ofstructure(s) from the U.S. Fish and Wildlife Service or the National Marine Fisheries Service ., any information submitted in order to obtain that exemption or authorization may be used to satisfy the permit application information requirement of paragraph 40 CFR 125.95(f) if included in the application.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 571 of 642 (5) Cooling Water System Data. The owner or operator of an existing facility must submit the following information for each cooling water intake structure used or intended to be used: (i) A narrative description of the opera tion of the cooling water system and its relationship to cooling water intake structur es; the proportion of the design intake flow that is used in the system; the number of days of the year the cooli ng water system is in operation and seasonal changes in the ope ration of the system, if applicable; at existing facilities, the proportion of design intake flow for contact cooling, non-contact cooling, and process uses; for existing facilities, a distribution of water re use to include cooling water reused as process water, process water reused for cooling, and the use of gray water for cooling; for existing facilities, a description of reductions in total water withdrawals including cooling water intake flow re ductions already achieved through minimized process water withdrawals; for existing facilities, a description of any cooling water that is used in a manufacturing process either be fore or after it is us ed for cooling, including other recycled process water flows; for existing facilities, the proportion of the source waterbody withdrawn (on a monthly basis); (ii) Design and engineering calculati ons prepared by a qualified professional and supporting data to support the descripti on required by paragraph (r)(5)(i) of this section; and (iii) At existing facilities, descriptionDescription of existing impingement and entrainment technologies or operational measur es and a summary of their performance,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 572 of 642 including but not limited to reductions in impingement mortality and entrainment due to intake location and reductions in total water withdrawals and usage. (6) Chosen Method (s) of Compliance with Impingement Mortality Standard

. The owner or operator of the facility must identify the chosen compliance method for yourthe entire facility; alternatively, youthe applicant must identify the chosen compliance method under 40 CFR 125.94(c) for each cooling water intake structure at your facility.its facili ty. The applicant must identify any intake structure for which a BTA determination for Impingement Mortality under 40 CFR 125.94 (c)(11) or (12) is requested. In addition, the owner or operator th at chooses to comply via 40 CFR 125.94 (c)(5) or (6) must also submit an impingement technology performance optimization study as described below: (i) If you choosethe applicant chooses to comply with 40 CFR 125.94(c)(5), yoursubject to the flexibility for timi ng provided in 40 CFR 125.95(a)(2), the impingement technology perf ormance optimization study must include two years of biological monitoringdata collection measuring the reduction in impingement mortality achieved by yourthe modified traveling screen s as defined at 40 CFR 125.92 (s) and demonstrating that yourthe operation has been optimized to minimize impingement mortality. You must include a A complete description of yourthe modified traveling screens and associated equipment must be included , including, for example, type of mesh, mesh slot size, pressure sp rays and fish return mechanisms. You must also provide
aA description of any monitoringbiological data collection and monitoringdata collection approach used in measuring impingement mortality , including:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 573 of 642 (A) For this demonstration, you must samplebe included: (A) Collecting data no less frequently than monthly. The Director may establish more frequent monitoringdata collection ; (B) Biological monitoring . Biological monitoring must bedata collection representative of the impingement and the impi ngement mortality at the intakes subject to this provision; (C) A taxonomic identification to the lowest taxon possible of all organisms to be monitoredcollected ; (D) The method in which naturally mori bund organisms are identified and taken into account; (E) The method in which mortality due to holding times is taken into account; (F) If yourthe facility entraps fish or shellfish, you musta count theof entrapment of organisms, as defined at 40 CFR 125.92(j), as impingement mortality; and (G) The percent impingement mortality reflecting optimized operation of yourthe modified traveling screen and all supporti ng calculations. (ii) If you choosethe applicant chooses to comply with 40 CFR 125.94(c)(6), yourthe impingement technology perf ormance optimization study must include biological monitoringdata measuring the reduction in impingement mortality achieved by operation of yourthe system of technologies, operational m easures and best management practices , and demonstrating that operation of yourthe system has been optimized to minimize impingement mortality. This system of tec hnologies, operational measures and best management practices may include flow reductions, seasonal operation, unit closure,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 574 of 642 credit for intake location, and behavioral deterrent systems. YouThe applicant must document how each system element contributes to yourthe system’s performance. YouThe applicant must include a minimum of two years of biological monitoringdata measuring the reduction in impingement mortality achieved by yourthe system. YouThe applicant must also include a desc ription of any sampling or monitoringdata collection approach used in measuring the rate of impingement, impingement mortality, or flow reductions. (A) Rate of Impingement . If yourthe demonstration relies in part on a credit for reductions in the rate of impingement in yourthe system, youthe applicant must provide an estimate of those reductions to be used as credit towards reducing impingement mortality, and any relevant supporting documentation, including previously collected biological data, performance reviews, and previously conducted performance studies not already submitted to the Director as part. The submission of (r)(7). You must accompany studies more than 10 years old withmust include an explanation of why the data isare still relevant and representative of conditions at yourthe facility and explain how the data should be interpreted using the definitions of impingement and entrapment at 40 CFR 125.92 .(n) and (j), respectively. The estimated reductions in rate of impingement must be based on a comparison of yourthe system to a once-through cooling system with a traveling screen whose point of withdrawal fr om the surface water sour ce is located at the shoreline of the source waterbody. In addition, youFor impoundme nts that are waters of the United States in whole or in part, the faci lity’s rate of impingeme nt must be measured at a location within the cooling water intake system that the Director deems appropriate.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 575 of 642 In addition, the applicant must include two years of biological monitoringdata collection demonstrating the rate of impingement resulting from yourthe system. For this demonstration, youthe applicant must monitorcollect data no less frequently than monthly. The Director may establish more frequent monitoringdata collection

. (B) Impingement Mortality . If yourthe demonstration relies in part on a credit for reductions in impingement mortality already obtained at yourthe facility, youthe applicant must include two years of biological monitoringdata collection demonstrating the level of impingement mortality yourthe system is capable of achieving. YouThe applicant must submit any relevant suppor ting documentation, including previously collected biological data, performance revi ews, and previously conducted performance studies not already submitted to the Director. The applicant must provide a description of any sampling or monitoringdata collection approach used in measuring impingement mortality. In addition, for this demonstration youthe applicant must: (1) MonitorCollect data no less frequently than monthly. The Director may establish more frequent monitoringdata collection ; (2) Conduct biological monitoringdata collection that is representative of the impingement and the impingement mortality at an intake subject to this provision. In addition, youthe applicant must describe how the locati on of the cooling water intake structure in the water bodywaterbody and the water column are accounted for in yourthe points of monitoringdata collection ; (3) Include a taxonomic identification to the lowest taxon possible of all organisms to be monitoredcollected ;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 576 of 642 (4) Describe the method in which natu rally moribund organisms are identified and taken into account; (5) Describe the method in which mortality due to holding times is taken into account; and (6) If yourthe facility entraps fish or shellfish, you musta count of the entrapment of organisms, as defined at 40 CFR 125.92(j), as impingement mortality. (C) Flow reduction . If yourthe demonstration relies in part on flow reduction to reduce impingement, youthe applicant must include two years of intake flows, measured daily, as part of yourthe demonstration, and describe the extent to which flow reductions are seasonal or intermittent. YouThe applicant must document how the flow reduction results in reduced impingement. In addition, youthe applicant must describe how the reduction in impingement has reduced your impingement mortality. (D) Total system performance. YouThe applicant must document the percent impingement mortality reflecting optimized operation of yourthe total system of technologies, operational measures, and best management practices and all supporting calculations. YourThe total system performance is the combination of the impingement mortality performance reflected in (A), (B), and (C) of this paragraph. (7) Entrainment Performance Studies. The owner or operator of an existing facility must submit any previously conducte d studies or studies obtained from other facilities addressing technology efficacy, through- plantfacility entrainment survival, and other entrainment studies. Any such submittals must include a description of each study, together with underlying data, and a summary of any conclusi ons or results. Any studies*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 577 of 642 conducted at other locations must include an explanation as to why the data from other locations are relevant and representa tive of conditions at your facility. If you submit In the case of studies more than 10 years old, youthe applicant must explain why the data isare still relevant and represen tative of conditions at yourthe facility and explain how the data should be interpre ted using the definition of entrainment at 40 CFR 125.92 .(h). (8) Operational Status. The owner or operator of an existing facility must submit a description of the operational status of each generating, production, or process unit that uses cooling water , including but not limited to: (i) For power production or steam gene ration, descriptions of individual unit operating status including age of each unit, capacity utilization rate (or equivalent) for the previous 5 years (, including any extended or unusual outages that significantly affect current data for flow, impingement, entrainment, or other factors, including identification of any operating unit with a capacity utilization rate of less than 8 percent for each of the previous 5 years and maintained sole ly to generate power for emergency purposes),averaged over a 24-m onth block contiguous period, and any major upgrades completed within the last 15 years, incl uding but not limited to boiler replacement, condenser replacement, turbine repla cement, or changes to fuel type; (ii) Descriptions of completed, appr oved, or scheduled uprates and Nuclear Regulatory Commission relicen sing status of each unit at nuclear facilities; (iii) For processesprocess units at your f acility that use cooling water other than for power production or steam generation, if you intend to use re ductions in flow or changes in operations to meet th e requirements of 40 CFR 125.94(c), descriptions of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 578 of 642 individual production processes and product lines, operating stat us including age of each line, seasonal operation, incl uding any extended or unusual outages that significantly affect current data for flow, impingement, entrainment, or othe r factors, any major upgrades completed within the last 15 years, and plans or schedules for decommissioning or replacement of process units or production processes and product lines; (iv) For all manufacturi ng facilities, descriptions of current and future production schedules; and (v) Descriptions of plans or schedules for any new units planned within the next 5 years. (9) Entrainment Characterization Study. The owner or operator of an existing facility that withdraws greater than 125 mgd AIF , where the withdrawal of cooling water is measured at a location within the cooling wa ter intake structure that the Director deems appropriate, must develop for submi ssion to the Director an Entrainment Characterization Study that includes a minimum of two years of entrainment monitoringdata collection . The Entrainment Characteriz ation Study must include the following components: ( Ai ) Entrainment MonitoringData Collection Method

. IdentificationThe study should identify and documentation ofdocument the monitoringdata collection period and frequency. IdentificationThe study should identify and documentation ofdocument organisms monitoredcollected to the lowest taxon possible of all life stages of fish and shellfish that are in the vicinity of the cooling water intake structure(s) and are susceptible to entrainment, including any other organisms identified by the Director, and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 579 of 642 any species protected under Fe deral, State, or Tribal Lawlaw , including threatened or endangered species with a habitat range withinthat includes waters in the vicinity of the cooling water intake structure. Biological monitoringdata collection must be representative of the entrainment at the in takes subject to this provision. The owner or operator of the facility must identify and document how the location of the cooling water intake structure in the water bodywaterbody and the water column are accounted for by the monitoringdata collection locations; ( Bii ) Biological Entrainment Characterization . Characterization of all life stages of fish, shellfish, and any species protected under Federal, State, or Tribal Lawlaw (including threatened or enda ngered species), including a de scription of their abundance and their temporal and spatial characteristics in the vicinity of the cooling water intake structure(s), based on sufficient data to characterize annual, s easonal, and diel variations in entrainment, including but not limited to variations related to climate and weather differences, spawning, feeding, and water colu mn migration. This characterization may include historical data that are repr esentative of the current operation of yourthe facility and of biological conditions at th e site. Identification of all life stages of fish and shellfish shallmust include identification of any surrogate species used, and identification of data representing both motile and non-motile life-stages of organisms; ( Ciii ) Analysis and Supporting Documentation . Documentation of the current entrainment of all life stages of fish, shellf ish, and any species protected under Federal, State, or Tribal Lawlaw (including threatened or enda ngered species). The documentation may include historical data that are re presentative of the current operation of yourthe*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 580 of 642 facility and of biological condi tions at the site. Entrainment monitoringdata to support the facility’s calculations must be collected during periods of repr esentative operational flows for the cooling water intake struct ure, and the flows associated with the monitoringdata collection must be documented. The method used to determine latent mortality along with data for specific organism mortality or survival that is applied to other life-stages or species must be identifie d. The owner or operator of the facility must identify and document all assumptions and calculations used to determine the total entrainment and entrainment mortality for that facility togeth er with all methods and quality assurance/quality control procedures for monitoringdata collection and data analysis. The proposed monitoringdata collection and data analysis methods must be appropriate for a quantitative survey. (10) Comprehensive Technical Feasib ility and Cost Evaluation Study. The owner or operator of an existing facility th at withdraws greater than 125 mgd AIF must develop for submission to the Director an engineering study of th e technical feasibility and incremental costs of candi date entrainment control t echnologies. In addition, the study must include the following: (i) Technical feasibility. An evaluation of the techni cal feasibility of closedcycle recirculating systems (cooling towersas defined at 40 CFR 125.92(c ), fine mesh screens with a mesh size of 2mm2 millimeters or smaller, and water reuse or alternate sources of cooling water. In a ddition, this study must include: (A) A description of all technologies and operational measures considered (including alternative designs of closed-cycle recirculating systems such as natural draft*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 581 of 642 cooling towers, mechanical draft cooling to wers, hybrid designs, and compact or multicell arrangements); (B) A discussion of land availability, including an evaluation of adjacent land and acres potentially available due to generating unit retirements, production unit retirements, other buildings and equipment re tirements, and potenti al for repurposing of areas devoted to ponds, coal piles, rail yard s, transmission yards, and parking lots; (C) A discussion of available sources of process water, grey water, waste water, reclaimed water, or other waters of appropriate quantity and quality for use as some or all of the cooling water needs of yourthe facility; and (D) Documentation of factors other th an cost that may make a candidate technology impractical or infeas ible for further evaluation. (ii) Other entrainment co ntrol technologies. An evaluation of additional technologies for reducing entrainment may be required by the Director. (iii) Cost evaluations . The study must include engineering cost estimates of all technologies considered in paragraphs (r)(10)(i ) and (ii) of this s ection. Facility costs must also be adjusted to estimate social co sts. All costs must be presented as the net present value (NPV) and the corr esponding annual value. Costs must be clearly labeled as compliance costs or social costs. YouThe applicant must separately discuss facility level compliance costs and social cost s, and provide documentation for the followingas follows : (A) Compliance costs are calculated as after-tax, while social costs are calculated as pre-tax. Compliance costs incl ude the facility’s administrative costs,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 582 of 642 including costs of permit app lication, while the social cost adjustment includes the Director’s administrative costs. Any outages, downtime, or other impacts to facility net revenue, are included in compliance costs, whil e only that portion of lost net revenue that does not accrue to other producers can be included in social costs. Social costs must also be discounted using social discount rates of 3 percent and 7 percent. Assumptions regarding depreciation schedules , tax rates, interest rates, discount rates and related assumptions must be identified; (B) Costs and explanation of any additio nal facility modifications necessary to support construction and operation of technolog ies considered in paragraphs (r)(10)(i) and (ii) of this section, in cluding but not limited to reloca tion of existing buildings or equipment, reinforcement or upgrading of existing equipment, and additional construction and operating permits. Assumpti ons regarding depreciation schedules, interest rates, discount rates, useful life of the technol ogy considered, and any related assumptions must be identified; and (C) Costs and explanatio n for addressing any non-water quality environmental and other impacts identified in paragraph (r)(12) of this sec tion. The cost evaluation must include a discussion of all reasonable a ttempts to mitigate each of these impacts. (11) Benefits Valuation Study

. Unless waived by the Director, theThe owner or operator of an existing facility that withdraws greater than 125 mgd AIF must develop for submission to the Director an evaluation of the magnitude of benefits , both monetized and non-monetized, of the candidate entrainment re duction technologies and operational measures evaluated in paragraph (r)(10) andincluding using the entrainment*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 583 of 642 characterization study Entrai nment Characterization Study completed in § 122.21(r)(9) of this section , including . Each category of benefi ts must be described narratively, and when possible, benefits should be quantif ied in physical or biological units and monetized using appropriate ec onomic valuation methods. Th e benefits valuation study must include, but is not limited to , the following elements : (i) Incremental changes in the numbers of individual fish and shellfish , for all life stages, lost due to impingement mortality and entrainment as defined in 40 CFR 125.92 , for all life stages of each exposed species ; (ii) IdentificationDescription of basis for a ny estimates of changes in the stock sizes or harvest levels of co mmercial and recreational fish or shellfish species or forage fish species; (iii) Description of basis for any monetized or qualitatively assessed values you assigned to changes in the stock size or harvest levels of commercial and recreational species, forage fish, and recreational fish or shellfish species, forage fish , and to any other ecosystem or non

- use benefits; ( iiiiv ) A discussion of mitigation e fforts completed prior to [ INSERT
EFFECTIVE DATE effective date of FINAL RULE final rule ] including how long they have been in effect and how effective they have been; ( iv) Identificationv) Discussion, with quantification and monetization, where possible, of any other benefits expected to accrue to the environment and local communities, including but not limited to improvements for mammals, birds, and other organisms and aquatic habitats;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 584 of 642 ( v) Estimatesvi) Discussion, with qu antification and monetization, where possible, of any benefits resultingexpected to result from any reductions in thermal discharges from entrainment technologies. (12) Non-water Quality Environmen tal and Other Impacts Study. The owner or operator of an existing facility that withdraws greater than 125 mgd AIF must develop for submission to the Direct or a detailed facility

- specific discussion of the changes in nonwater quality environmental and other imp acts attributed to each technology and operational measure considered in paragra ph (r)(10) of this section, including both impacts increased and impacts decreased. The study must include the following: (i) Estimates of changes to energy consumption, including but not limited to auxiliary power consumption and turbine backpressure energy penaltiespenalty ; (ii) Estimates of air pollutant emissions and of the human health and environmental impacts associated with such emissions; (iii) Estimates of changes in noise; (iv) A discussion of imp acts to safety, including doc umentation of the potential for plumes, icing, and availability of emergency cooling water; (v) A discussion of facility reliability, including but not limited to facility availability, production of steam , impacts to production base d on process unit heating or cooling, and reliability due to cooling water availability; (vi) Significant changes in consumption of water, in cluding a facility-specific comparison of the evaporative losses of both once-through cooling and closed-cycle*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 585 of 642 recirculating systems, and documentation of impacts attributable to changes in water consumption; and (vii) A discussion of all reasonable attempts to mitigate each of these factors. (13) Peer Review . If you arethe applicant is required to submit studies under § 122.21(r)(10) to (r)(12), youthe applicant must conduct an extern al peer review of youreach report to be submitted with yourthe permit application. YouThe applicant must select peer reviewers and notif y the Director in advance of the peer review. The Director may disapprove of a peer reviewer or require additional peer reviewers. The Director may confer with EPA, Federal, State and Tribal fish and wildlife management agencies with responsibility for fish and w ildlife potentially affected by the cooling water intake structure, independent system operators, and state public utility regulatory agencies, to determine which peer review comments must be addressed. YouThe applicant must provide an explanation for any significan t reviewer comments not accepted. Peer reviewers must have appropria te qualifications and their na mes and credentials must be included in the peer review report. (14) New Units. YouThe applicant must identify the chosen compliance method for yourthe new unit. In addition, the owner or op erator that selects the BTA standards for entrainment for new units at 40 CFR 125.94 (e)(2) as theirits route to compliance must submit information to demonstrate entrai nment reductions equi valent to 90 percent or greater of the reduction that could be achieved through compliance with 40 CFR 125.94(e)(1). The demonstration must include the entrainment characterization studyEntrainment Characterization Study at § 122.21(r)(9). In addition, if data specific to*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 586 of 642 your facility indicates that compliance w ith the requirements of § 125.94 for each new unit would result in compliance costs who lly out of proportion to the costs EPA considered in establishing the requirements at issue, or would result in significant adverse impacts on local air quality, significant a dverse impacts on local wa ter resources other than impingement or entrainment, or signifi cant adverse impacts on local energy markets, you must submit all supporting data as part of § 122.21(r)(14). The Director may determine that additional data and in formation, including but not limited to additional monitoring, must be included as part of § 122.21(r)(14).

PART 125--CRITERIA AND STANDARDS FOR THE NATIO NAL POLLUTANT DISCHARGE ELIMINATION SYSTEM 4. The authority citation for part 125 continues to read as follows: AUTHORITY: The Clean Water Act, 33 U.S.C. 1251 et seq .; unless otherwise noted. Subpart I--[Amended] 5. Section 125.84 is amended by: a. Revising paragraph (c ) introductory text; and b. Revising paragraph (d)(1). The revised text reads as follows: § 125.84 As an owner or operator of a new fa cility, what must I do to comply with this subpart?
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Page 587 of 642 (c) Track I requirements for new facilitie s that withdraw greater than 2 mgd and less than 10 mgd and that choose not to co mply with paragraph (b) of this section. You must comply with all the following requirements:
* * * * * (d) * * * (1) You must demonstrate to the Dire ctor that the technologies employed will reduce the level of adverse environmental impact from your cooling water intake structures to a level comparable to that wh ich you would achieve were you to implement the requirements of paragraphs (b)(1) and (2) of this sec tion. This demonstration must include a showing that the impacts to fish and shellfish, including important forage and predator species, within the watershed will be comparable to those which would result if you were to implement the requirements of para graphs (b)(1) and (2) of this section. The Director will consider info rmation provided by any fishery management agency and may also consider data and info rmation from other sources.
* * * * * 6. Section 125.86 is amended as follows: a. Revise paragraph (a)(1)(ii). b. Revise paragraph (b )(3) introductory text. c. Revise paragraph (b)(4)(iii ), leaving subparagraphs (A), (B )), and (C) unchanged. d. Remove and reserve paragraph (c)(2)(ii). e. Remove and reserve paragraph (c)(2)(iv)(C).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 588 of 642 f. Remove and reserve paragraph (c)(2)(iv)(D)(2). § 125.86 As an owner or operator of a new fa cility, what must I collect and submit when I apply for my new or reissued NPDES permit? (a) * * * (1) * * * (ii) The Track I requirements for new f acilities that withdr aw greater than 2 mgd and less than 10 mgd in Sec. 125.84(c);
* * * * * (b) * * * (3) Source waterbody flow information. You must submit to the Director the following information to demonstrate that you r cooling water intake structure meets the flow requirements in S ec. 125.84(b)(3) or (c)(2).
* * * * * (4) * * * (iii) The owner or operator of a new facility required to install design and construction technologies and/or operationa l measures must develop a plan which explains the technologies and measures selected ; this plan shall be based on information collected for the Source Water Biological Ba seline Characterization required by 40 CFR 122.21(r)(4). Examples of a ppropriate technologies incl ude, but are not limited to, wedgewire screens, fine mesh screens, fish handling and return systems, barrier nets, aquatic filter barrier systems, etc. Examples of appropriate operati onal measures include,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 589 of 642 but are not limited to, seasonal shutdowns or reductions in flow, and continuous operations of screens, etc. The plan must contain the following information:
* * * * * 7. Section 125.87 is amended by revising paragra phs (a) introductory text and (a)(2) to read as follows: § 125.87 As an owner or operator of a ne w facility, must I perform monitoring?
* * * * * (a) Biological monitoring. You must monitor both impingement and entrainment of the commercial, recreational, and forage base fish and shellfish species identified in either the Source Water Base line Biological Characterization data required by 40 CFR 122.21(r)(4) or the Comprehensive Demonstration Study required by Sec. 125.86(c)(2), depending on whether you chose to comply with Track I or Track II. The monitoring methods used must be consistent with those used for the Source Water Baseline Biological Characterization data required in 40 CFR 122.21(r)(4) or the Comprehensive Demonstration Study require d by Sec. 125.86(c)(2). You must follow the monitoring frequencies identified below for at least two (2) years after the initial permit issuance. After that time, th e Director may approve a reque st for less frequent sampling in the remaining years of the permit term and when the permit is reissued, if the Director determines the supporting data show that le ss frequent monitoring would still allow for the detection of any seasonal and daily va riations in the species and numbers of individuals that are im pinged or entrained.
* * * * **** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 590 of 642 (2) Entrainment sampling. You must collect samples at least biweekly to monitor entrainment rates (simple enumeratio n) for each species over a 24-hour period during the primary period of reproduction, larval recruitment, and peak abundance identified during the Source Water Baseline Biological Characterization required by 40 CFR 122.21(r)(4) or the Comprehensive De monstration Study required in Sec. 125.86(c)(2). You must collect samples only when the cooling water inta ke structure is in operation.
* * * * * 8. Section 125.89 is amended by revising paragraphthe introductory text of paragraphs (a), (b)(1)( i) and ( ii) to read as follows: § 125.89 As the Director, what must I do to comply with the requirements of this subpart? (a) Permit application. As the Director, you must review materials submitted by the applicant under 40 CFR 122.21(r)(4) and § 1 25.86 at the time of the initial permit application and before each permit renewal or reissuance.
* * * * * (b) * * * (1) * * * (i) If an owner or operato r of a facility chooses Track I, you must review the Design and Construction Technol ogy Plan required in Sec. 125.86(b)(4) to evaluate the suitability and feasibility of the technology proposed to minimize impingement mortality and entrainment of all life stages of fish a nd shellfish. In the firs t permit issued, you must*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 591 of 642 put a condition requiring the f acility to reduce impingement mortality and entrainment commensurate with the implementation of the technologies in the permit. Under subsequent permits, the Director must re view the performance of the technologies implemented and require additional or differe nt design and construc tion technologies, if needed to minimize impingement mortality and entrainment of all life stages of fish and shellfish. In addition, you must consider whether more stringent conditions are reasonably necessary in accord ance with Sec. 125.84(e). (ii) If an owner or operator of a fac ility chooses Track II, you must review the information submitted with the Comprehensive Demonstration Study required in Sec. 125.86(c)(2) and evaluate the suitability of the proposed design and construction technologies and operational measures to de termine whether they will reduce both impingement mortality and entrainment of all life stages of fish and shellfish to 90 percent or greater of the reduction that coul d be achieved through Track I. In addition, you must review the Verificati on Monitoring Plan in Sec. 125.86(c)(2)(iv)(D) and require that the proposed monitoring begin at the star t of operations of the cooling water intake structure and continue for a sufficient period of time to demonstrate that the technologies and operational measures meet the requireme nts in Sec. 125.84(d)(1). Under subsequent permits, the Director must review the perf ormance of the additional and/or different technologies or measures used and determin e that they reduce the level of adverse environmental impact from the cooling water in take structures to a comparable level that the facility would achieve we re it to implement the requirements of Sec. 125.84(b)(1) and (2).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 592 of 642 * * * * *
9. Section 125.90 is amended as follows:Th e suspension of 40 CFR 125.90(a), (c) and (d), and 125.91 through 125.99, published on July 9, 2007 (72 FR 37109) is lifted. a. The suspension of (a) through (c) pub lished on July 9, 2007 (72 FR 37109) is lifted. b. Remove and reserve paragraph (d). 10. The suspension of 40 CFR 125.91 thr ough 125.99, published on July 9, 2007 (72 FR 37109) is lifted.
11.10. Subpart J to part 125 is re vised to read as follows: Subpart J--Requirements Applicable to Cooling Water Intake Structures for Existing Facilities Under Sectio n 316(b) of the Clean Water Act
Sec. 125.90 Purpose of this subpart. 125.91 Applicability. 125.92 Special definitions. 125.93 [Reserved.] 125.94 As an owner or operator of an existing fa cility, what must I do to comply with this subpart? 125.95 Permit application and supporti ng information requirements. 125.96 Monitoring requirements. 125.97 Other permit reporting and recordkeeping requirements. 125.98 Director requirements.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 593 of 642 125.99 [Reserved.] Subpart J--Requirements Applicable to Cooling Water Intake Structures for Existing Facilities Under Sectio n 316(b) of the Clean Water Act § 125.90 Purpose of this subpart. (a) This subpart estab lishes the section 316(b) re quirements that apply to cooling water intake structures at existing facilities that are subject to this subpart. These requirements include a number of component s. These include standards for minimizing adverse environmental impact associated with the use of cooling wate r intake structures and required procedures (e.g., permit applic ation requirements, information submission requirements) for establishing the appropr iate technology requirements at certain specified facilities as well as required monitoring, reporting, and recordkeeping requirements to demonstrate compliance. In combination, these components represent the best technology available for minimizing advers e environmental impact associated with the use of cooling water intake structures at existing facilities. These requirements are to be established and implemented in National Pollutant Discharge Elimination System (NPDES) permits issued under authority of sections 301, 308, and 402 of the Clean Water Act (CWA). (b) Cooling water intake structur es not subject to requirements under § 125.94, et seq. of this Subpart or, Subpart I, or Subpart N of th is part must meet requirements under section 316(b) of the CWA established by the Director on a case-by-case, best professional judgment (BPJ) basis.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 594 of 642 (c) Nothing in this subpart shall be construed to preclud e or deny the right under section 510 of the CWA of any State or politic al subdivision of a Stat e or any interstate
agency under section 510 of the CWA to adopt or enforce any requirement with respect to control or abatement of polluti on that is more stringent than those required by Federal law. [NOTE: This regulation does not authori ze take, as defined by the Endangered Species Act, 16 USC 1532(19). The U.S. Fish and Wildlife Service and National Marine Fisheries Service have determined that any impingement (including entrapment) or entrainment of Federally-listed species constitu tes take. Such take may be authorized pursuant to the conditions of a permit issued under 16 U.S.C. 1539(a) or where consistent with an Incidental Take Statement contai ned in a Biological Opinion pursuant to 16 U.S.C. 1536(o).] § 125.91 Applicability. (a) The owner or operator of an existing facility, as defined in § 125.92 ,(k), is subject to the requirements at 125.9 4 et seq. of this subpart if: (1) The facility is a point source; (2) The facility uses or proposes to use one or more cooling water intake structures with a cumulative design intake flow (DIF) of greater than 2 million gallons per day (mgd) to withdraw water from waters of the United States; and (3) Twenty-five percent or more of the water the facility withdraws on an actual intake flow basis is used ex clusively for cooling purposes.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 595 of 642 (b) Use of a cooling water intake stru cture includes obtaining cooling water by any sort of contract or arrangement with one or more independent suppliers of cooling water if the independent supplie r withdraws water from waters of the United States but is not itself a new or existing facility as define d in subparts I or J of this part, except as provided in paragraphs (c) and (d) of this section. An owne r or operator of an existing facility may not circumvent these requir ements by creating arrangements to receive cooling water from an entity that is not itself a facility subject to subparts I or J of this part. (c) Obtaining cooling water from a public water system, using reclaimed water from wastewater treatment facilities or desa lination plants, or recy cling treated process wastewater effluent as cooling water does not constitute use of a cooling water intake structure for purposes of this subpart. The owner or operator of a facility using reclaimed water and discharging it must meet the effl uent limitation standards that would have applied to the facility from which the reclaimed water is obtained. (d) This subpart does not apply to offshore seafood processing facilities, offshore liquefied natural gas terminals, and o ffshore oil and gas extract ion facilities that are existing facilities as defined in § 125.92 .(k). The owners and operators of such facilities must meet requirements established by the Director on a case-by-case, best professional judgment (BPJ) basis. § 125.92 Special definitions. In addition to the definitions provide d in 40 CFR 122.2 of this chapter, the following special definitions apply to this subpart:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 596 of 642 (a) Actual Intake Flow (AIF) means the average vol ume of water withdrawn on an annual basis by the cooling water intake st ructures over the past three years. After [INSERT DATEdate 5 YEARS AFTER EFFECTIVE DA TEyears after effective date of the final rule ] , Actual Intake Flow means the average volume of water withdrawn on an annual basis by the cooling wa ter intake structures over the previous five years. Actual intake flow is measured at a location within the cooling water intake

structure that the Director deems appropriate. The calculation of actual intake flow includes days of zero flow. AIF does not incl ude flows associated with emergency and fire suppression capacity. (b) All life stages of fish and shellfish means eggs, larvae, juveniles, and adults. It does not include members of the infracl ass Cirripedia in the subphylum Crustacea (barnacles), green mussels ( Perna viridis ), or zebra mussels ( Dreissena polymorpha ). The Director may determine that all life stages of fish and shellfis h does not include other specified nuisance species. (c) Closed-cycle recirculating system means a system designed and properly operated using minimized ma ke-up and blowdown flows that withdraws water withdrawn from a natural or other water sourceof the United States to support contact or

noncontactnon-contactcooling uses within a facility, or a system designed to include certain impoundments that are not themselves a waters of the United States . A closedcycle recirculating system passes cooling water through the condenser and other components of the cooling system and reuses the water for cooling multiple times. A closed*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 597 of 642 (1) Closed -cycle recirculating system may includeincludes a facility with wet , dry, or dryhybrid cooling towers , a system of impoundments th at are not waters of the United States, or any combination thereof . A properly operated and maintained closedcycle recirculating system w ithdraws new source water (make-up water) only to replenish losses that have occurred due to blowdown, drif t, and evaporation. If waters of the United States are withdrawn for purposes of replenis hing losses to a closed-cycle recirculating system other than those due to blowdown, drif t, and evaporation from the cooling system, the Director may determine a cooling system is a closed-cycle recirculating system if the facility demonstrates to the satisfaction of the Director th at make-up water withdrawals attributed specifically to the cooling portion of the cooling system have been minimized. In the case of a facility that uses make-up water from a freshwater source, a closed-cycle recirculating system can generally be found to minimize make-up and blowdown flows if it reduces actual intake flows (AIF) by 97.5 percent as compared to a once-through cooling system or if its cooling tower is opera ted at a minimum cycles of concentration of 3.0. In the case of a facility that uses make -up water from a saltwater, brackish, or other source with a salinity of great er than 0.5 parts per thousand, a closed-cycle recirculating system can generally be found to minimize make-up and blowdown flows if it reduces actual intake flows (AIF) by 94.9 percent as compared to a once-through cooling system or if its cooling tower is operated at a minimum cycles of concentration of 1.5. (2) Closed-cycle recirculating system also includes a system with impoundments of waters of the U.S. where the impoundment was constructed prior to [INSERT effective date of the final rule] and created for the purpose of serving as part*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 598 of 642 of the cooling water system as documente d in the project purpose statement for any required Clean Water Act section 404 permit obtained to construct the impoundment. In the case of an impoundment whose construc tion pre-dated the CWA requirement to obtain a section 404 permit, documentation of the project’s purpose must be demonstrated to the satisfaction of the Direct or. This documentation could be some other license or permit obtained to lawfully construct the impoundme nt for the purposes of a cooling water system, or other such evid ence as the Director finds necessary. For impoundments constructed in uplands or not in waters of the United States, no documentation of a section 404 or other permit is required. If waters of the United States are withdrawn for purposes of replenishing loss es to a closed-cycle recirculating system other than those due to blow down, drift, and evaporation fr om the cooling system, the Director may determine a cooling system is a closed-cycle recirculating system if the facility demonstrates to the satisfaction of the Director th at make-up water withdrawals attributed specifically to the cooling portion of the cooling system have been minimized. (d) Contact cooling water means water used for cooling which comes into direct contact with any raw material, product, or byproduct. Examples of contact cooling water may include but are not limited to quench water at iron and steel plantsfacilities , cooling water in a cracking unit, and cooling wa ter directly added to food and agricultural products processing. (e) Cooling water means water used for contact or noncontactnon-contact cooling, including water used for equipment cooling, evaporative cooling tower makeup, and dilution of effluent heat content. The intended use of th e cooling water is to absorb*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 599 of 642 waste heat rejected from the process or pro cesses used, or from auxiliary operations on the facility’s premises. Coo ling water obtained from a pub lic water system, reclaimed water from wastewater treatment facilities or desalination plants, treated effluent from a manufacturing facility, or cool ing water that is used in a manufacturing process either before or after it is used for cooling as pro cess water, is not considered cooling water for the purposes of calculating the percentage of a facility’s intake flow that is used for cooling purposes in 40 CFR§ 125.91(a)(3). (f) Cooling water intake structure means the total physic al structure and any associated constructed waterways used to w ithdraw cooling water from waters of the United States. The cooling water intake struct ure extends from the point at which water is first withdrawn from waters of the surface water sourceUnited States up to, and including the intake pumps. (g) Design intake flow (DIF) means the value assi gned during the cooling water intake structure design to the maximum instan taneous rate of flow of water the cooling water intake system is capable of withdr awing from a source waterbody. The facility’s DIF may be adjusted to reflect permanent changes to the maximum capabilities of the cooling water intake system to withdraw cooling water, including pumps permanently removed from service, flow limit devices, and physical limitations of the piping. DIF does not include values associated with em ergency and fire suppression capacity or redundant pumps (i.e., back-up pumps). Emergency purposes means to supply backup power resources during a crisis, natural catastrophe, extreme w eather event, or when regular systems fail unexpectedly.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 600 of 642 Emergency purposes does not in clude situations of high or peak electricity demand, or regular, frequent or seasona l generation of power. (h) Entrainment means any life stages of fish and shellfish in the intake water flow entering and passing through a cooling water intake structure and into a cooling water system, including the condenser or heat exchanger. Entrainable organisms include any organisms pot entially subject to entrainment . For purposes of this subpart,
entrainment excludes those organisms that are co llected or retained by a sieve with maximum opening dimension of 0.56 inches. Exam ples of sieves meeting this definition include but are not limited to a 3/8 inch squa re mesh, or a 1⁄2 by 1⁄4 inch mesh. A facility must use the same mesh size when counti ng entrainment as is used when counting impingement. (i) Entrainment mortality means death as a result of entrainment through the cooling water intake structure, or death as a result of exclusion fr om the cooling water intake structure by fine mesh screens or ot her protective devices in tended to prevent the passage of entrainable organisms through the cooling water intake structure. (j) Entrapment means the condition where imping eable fish and shellfish lack the means to escape the cooling water intake. Entrapment includes but is not limited to: organisms caught in the bucket of a traveling screen and unable to reach a fish return; organisms caught in the forebay of a cooling water intake system without any means of being returned to the source waterbody without experiencing mortality; or cooling water intake systems where the velocities in the inta ke pipes or in any ch annels leading to the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 601 of 642 forebay prevent organisms from being able to return to the sour ce waterbody through the intake pipe or channel. (k) Existing facility means any facility that commenced construction as described in 40 CFR 122.29(b)(4 ) on or before January 17, 20 02 (or July 17, 2006 for an offshore oil and gas extraction facility) and a ny modification of, or any addition of a unit at such a facility. A facility built adjacent to another facility would be a new facility while the original facility would remain as an exiting facility for purpos es of this subpart. A facility cannot both be an ex isting facility and a new fac ility as defined at § 125.83. (l) Flow reduction means any modification to a coo ling water intake structure or its operation that serves to reduce the vol ume of cooling water withdrawn. Examples include, but are not limited to, variable sp eed pumps, seasonal flow reductions, wet cooling towers, dry cooling towers, hybrid co oling towers, unit closures, or substitution for withdrawals by reuse of effluent from a nearby facility. (m) Fragile species means those species of fish a nd shellfish that are least likely to survive any form of impingeme nt. For purposes of this subpart, fragile species are defined as those with an impingement survival rate of less than 30 percent, including but not limited to alewife, American shad, A tlantic herring, Atlantic long-finned squid, Atlantic menhaden, bay anchovy, blueback he rring, bluefish, butterfish, gizzard shad, grey snapper, hickory shad, me nhaden, rainbow smelt, round herring, and silver anchovy , and shad of the genus Alosa

. High energy efficiency units means any unit that has a heat rate of 7000 Btu/KWhnet higher heating value (HHV) basis or less, or has a thermal efficiency of*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 602 of 642 49% HHV basis or more. The thermal effici ency shall be calculated using the EPA [CHP] Total System Efficiency Metric. (n) Impingement means the entrapment of any life stages of fish and shellfish on the outer part of an intake st ructure or against a screening device during periods of intake water withdraw al. For purposes of this subpart, impingement includes those organisms collected or retained on a sieve with maximum distance in the opening of 0.56 inches, and excludes those organisms th at pass through the sieve. Examples of sieves meeting this definition include but are not limited to a 3/8 inch square mesh, or a 1⁄2 by 1⁄4 inch mesh. This definition is intende d to prevent the conversion of entrainable organisms to counts of impingement or impi ngement mortality. The owner or operator of a facility must use a sieve w ith the same mesh size when counting entrainment as is used when counting impingement. (o) Impingement mortality (IM) means death as a result of impingement or entrapment. Impingement mortality also in cludes organisms removed from their natural ecosystem and lacking the ability to escape the cooling water intake system, and thus subject to inevitable mortality

. (p) Independent supplier means an entity, other than the regulated facility, that owns and operates its own cooling water inta ke structure and dire ctly withdraws water from waters of the United States. The s upplier provides the coo ling water to other facilities for their use, but may itself also use a portion of the water. An entity that provides potable water to residential populat ions (e.g., public water system) is not a supplier for purposes of this subpart.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 603 of 642 (q) Latent mortality means the delayed mortality of organisms that were initially alive upon being impi nged or entrained but that do not survive the delayed effects of impingement and entrainment dur ing an extended holding period. Delayed effects of impingement and entrainment in clude but are not limited to temperature change, physical stresses, and chemical stresses. (r) Minimize means to reduce to the smalle st amount, extent, or degree reasonably possible. (s) Modified traveling screen means a traveling water screen that incorporates measures protective of fish and shellfish, including but not limited to: screens with collection buckets or equivalent mechanisms designed to minimize turbulence to aquatic life; addition of a guard rail or barrier to pr event loss of fish from the collection system; replacement of screen panel materials with smooth woven mesh, drilled mesh, molded mesh, or similar materials that protect fish from descaling and ot her abrasive injury; continuous or near-continuous rotation of screens and operation of fish collection equipment to ensure any impinged organisms are recovered as soon as practical; a low pressure wash or gentle vacuum to remove fish prior to any high pressure spray to remove debris from the screens; and a fish handling and return system with sufficient water flow to return the fish directly to the source water in a manner that does not promote predation or re-impingement of the fish, or require a large vertical drop. The Director may approve of fish being returned to water sources other than the original

source water ., taking into account any recommendations from the Services with respect to endangered or threatened species. Examples of modified traveling screens include, but*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 604 of 642 are not limited to: modified Ristroph screens with a fish handling and return system, dual flow screens with smooth mesh, and rotary scre ens with fish returns or vacuum returns. (t) Moribund means dying; close to death. (u) New unit means addition of any operatinga new “stand-alone” unit at an existing facility where the construction of the new unit begins after [INSERT effective date of the final rule ] , ] and that does not otherwise meet the definition of a new facility at § 125.83

. New unit includes addition or is not otherw ise already subject to Subpart I of any electric generatingt hat section. A stand-alone unit that is a stand-aloneseparate unit constructed at an existing that is added to a facility . For purposes of this subpart, for either the same general industria l operation or another purpose. A new unit also includes any rebuilt, repowered or replacement electr ic generating unit where the turbine and condensermay have been replaced as part of the rebuilding, repowering or replacing, except in the case of high energy efficiency units. If the turbin e and condenser are replaced at separate times after [INSERT effective date of the final rule] , replacement of the second component is when the unit becomes a new unit under this definition. New
unit also means any newly built production units or replacement production units where the majority of the waste heat-producing equipment that serves as sources of noncontactits own dedicated cooling water and the majority of the heat exchanging equipment that contributes heat to the non-c ontactintake structure, or the new unit may use an existing or modified cooling water are newly installed or repl aced.intake structure. (v) Offshore velocity cap means a velocity cap located a minimum of 850800 feet from the shoreline and outside of the littoral zone.. A velocity cap is an open intake*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 605 of 642 designed to change the direction of water withdrawwithdrawal from vertical to horizontal, thereby creating hor izontal velocity patterns that result in avoidance of the intake by fish and other aquatic organisms. Fo r purposes of this subpart, the velocity cap must use bar screens or otherwise exclude ma rine mammals, sea turtles, and other large aquatic organisms. (w) Operational measure means a modification to any operation that serves to minimize impact to all life stag es of fish and shellfish from the cooling water intake structure. Examples of operational measures include, but are not limited to, more frequent rotation of traveling sc reens, use of a low pressure wa sh to remove fish prior to any high pressure spray to remove debris, main taining adequate volume of water in a fish return, and debris minimization measures such as air sparging of in take screens and/or other measures taken to maintain the design intake velocity. (x) Social benefits means the increase in social welfare that results from taking an action. Social benefits include private be nefits and those benefits not taken into consideration by private decision makers in the actions they choose to take, including effects occurring in the future. Benef its valuation involves measuring the positive aspects of the actions taken, in monetary term s. The principle of willingness-to-pay (WTP)physical and biological effects on the en vironment from the actions taken. Benefits are generally treated one or more of three ways: a narrative c ontaining a qualitative discussion of environmental effects, a quan tified analysis expressed in physical or biological units, and a monetized benefits anal ysis in which dollar values are applied to quantified physical or biological units. The dolla r values in a social benefits analysis are*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 606 of 642 based on the principle of willingness-to-pay (WTP), which captures monetary benefits by measuring what individuals are willing to for go in order to enjoy a particular benefit. Willingness-to-pay for nonuse values can be measured using benefits transfer or a stated preference survey. (y) Social costs means costs estimated from th e viewpoint of society, rather than individual stakeholders. Social cost represents the total burden imposed on the economy; it is the sum of all opportunity cost s incurred associated with taking actions. These opportunity costs consist of the value lost to society of all the goods and services that will not be produced and consumed as a facility complies with permit requirements, and society reallocates resources away fr om other production activities and towards minimizing adverse environmental impacts. § 125.93 Reserved. § 125.94 As an owner or operator of an existi ng facility, what must I do to comply with this subpart? (a) Applicable Best Technology Av ailable for Minimizing Adverse Environmental Impact (BTA) standards. (1) After December 31, 2016,On or after [INSERT effective date of final rule] , the owner or operator of an existing faci lity with a cumulative design intake flow (DIF) greater than 2 m gd is subject to the BTA (best technology available) standards for impingement mortality standard under paragraph (c )), and the entrainment standard under paragraph (d) including any measures to protect Federally-listed threatened and*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 607 of 642 endangered species and designated critical habitat established under paragraph (g) of this section. (2) Prior to December 31, 2016, [INSERT effective date of final rule] , the owner or operator of an existing facility with a cumulative design intake flow (DIF) greater than 2 mgd is subject to site-sp ecific impingement mortality and entrainment requirements as determined by the Direct or on a case-by-case Best Professional Judgment basis. The Director’s BTA determ ination may be based on consideration of some or all of the factors at § 125.98 (f)(2) and (3) and BTA Standard for Impingement Mortality atthe requirements of § 125.94(c). If the Director requires additional information to make the decision on what BTA requirements to include in the applicant’s permit for impingement mortality and entrainm ent, the Director should consider whether to require any of the information at §40 CFR 122.21(r). (3) The owner or operator of a new unit at an is subject to the impingement mortality and entrainment standards under pa ragraph (e) for all cooling water intake flows used by the new unit. The remainder of the existing facility with a cumulative design intake flow (DIF ) greater than 2 mgd is subject to the impingement mortality standard under paragraph (c )), and the entrainment standard under paragraph ( ed ) of this section. The entire existing facility including any new units is subject to any measures to protect Federally-listed threatened and enda ngered species and designa ted critical habitat established under paragra ph (g) of this section. (b) Compliance with BTA standards

.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 608 of 642 (1) Aligning compliance deadlines for im pingement mortality and entrainment requirements. (b) Compliance with BTA standards

. (1) Aligning compliance deadlines for im pingement mortality and entrainment requirements. After issuance of a final permit that establishes the entrainment requirements under § 125.94 (d), the owner or operator of an existing facility must comply with the impingement mortality standard in paragraph § 125.94 (c) as soon as practicable. The Director may establish interim compliance milestones in the permit. possible. The Director may establish interim compliance milestones in the permit. (2) After issuance of a final permit establishing the entrainment requirements under § 125.94 (d), the owner or operator of an ex isting facility must comply with the entrainment standard as soon as possiblepracticable , based on a schedule of requirements established by the Director. The Director may establish interim compliance milestones in the permit. The Director may establish interim compliance milestones in the permit. (3) The owner or operator of a new unit at an existing facility must comply with the BTA standards in paragraphsat § 125.94 ( c) and ( e) with respect to the new unit upon commencement of the new unit’s operation. (c) BTA Standards for Impingement Mortality. (c) BTA Standards for Impingement Mortality. The owner or operator of an existing facility or new unit at an existing facility must comply with one of the alternatives in (c)(1) through (c)(7) below, except as provided in (c)( 10),11) or (c)(12 ) or (c)(13 ), when approved by the Director. Additionally, facilities In addition, a facility*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 609 of 642 may also be subject to the requi rements of (c)(8), (c)(9), or ( c)(11g ) of this section asif the Director determines applicable.require s such additional measures. (1) Closed-cycle recirculating system. A facility must operate a closed-cycle recirculating system as defined at § 125.92 .(c). In addition, you must monitor yourthe actual intake flows at a minimum frequency of daily. YourThe monitoring must be representative of normal operating conditions, and must include measuring cooling water withdrawals, make-up water, and blow dow n volume. In lieu of daily intake flow monitoring, you may monitor your cycles of concentration at a minimum frequency of daily; or (2) 0.5 Feet Per Second Through- Screen Design Velocity. A facility must operate a cooling water intake structure that has a maximum design th rough-screen intake velocity of 0.5 feet per second. The owner or operator of the facility must submit information to the Director that demonstrates that the maximum design intake velocity as water passes through the structur al components of a screen me asured perpendicular to the screen mesh does not exceed 0.5 feet per second. The maximum velocity limit must be achieved under all conditions, including dur ing minimum ambient source water surface elevations (based on BPJ using hydrological data) and during periods of maximum head loss across the screens or other devices during no rmal operation of the intake structure; or (3) 0.5 Feet Per Second Through-Sc reen Actual Velocity. A facility must operate a cooling water intake structure that has a maximum through-screen intake velocity of 0.5 feet per second. The owner or operator of the facility must submit information to the Director that demonstrates that the maximum intake velocity as water*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 610 of 642 passes through the structural components of a screen measured perpendicular to the screen mesh does not exceed 0.5 feet per second. The maximum velocity limit must be achieved under all conditions, including dur ing minimum ambient source water surface elevations (based on best professional judgment using hydrological data) and during periods of maximum head loss across the screens or other devices during normal operation of the intake structure. The Director may authorize the owner or operator of the facility to exceed the 0.5 fps velocity standard at an intake for brief periods for the purpose of maintaining the cool ing water intake system, such as backwashing the screen face. If the intake does not have a screen, th e maximum intake velocity perpendicular to the opening of the intake must not exceed 0.5 feet per second during minimum ambient source water surface elevations. In addition, you must monitor yourthe velocity at the screen at a minimum frequency of daily. In lieu of velocity monitori ng at the screen face, you may calculate the through-sc reen velocity using water flow, water depth, and the
screen open areas; or (4) Existing offshore velocity cap. A facility must operate an existing offshore velocity cap as defined at § 125.92 (v) that was installed prior toon or before [INSERT effective date of rule] . Offshore velocity ca ps installed after [ INSERT effective date of rule] must make either a demonstration under paragraph (6) or meet the performance standard under paragraph (7). In additi on, you must monitor your intake flow at a minimum frequency of daily; or (5) Modified traveling screens. A facility must operate a modified traveling screen that the Director determ ines meets the definition at § 125.92 (s) and that, after*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 611 of 642 review of the information required in the impingement technology performance optimization study at 40 CFR 122.21(r)(6)(i), the Direct or determines is the best technology available for impingeme nt reduction at the site. As the basis for the Director’s determination, the owner or operator of the facility mu st demonstrate the technology has beenis or will be optimized to minimize impingement mortality of all non-fragile species. The Director must include verifiable and en forceable permit conditions that ensure the technology will perform as demonstrated; or (6) Systems of technologies as th e BTA for impingement mortality. A facility must operate a system of technologies, mana gement practices, and operational measures, that, after review of the information required in the impingement technology performance optimization study at 40 CFR 122.21(r)(6)(ii), the Dir ector determines is the best technology available for impingement reduction at your cooling water intake structures. As the basis for the Director’s determination, the owner or operator of the facility must demonstrate the system of technology has been optimized to minimize impingement mortality of all non-fragile species. In addi tion, the Director’s decision will be informed by comparing the impingement mortality performance data under 40 CFR 122.21(r)(6)(ii)(D) to the impingement mortality performance standard that would otherwise apply under paragraph (7). The Director must include verifiable and enforceable permit conditions that ensure th e system of technologi es will perform as demonstrated; or (7) Impingement mortality performance standard. A facility must achieve an annuala 12-month impingement mortality performance standard of all life stages of fish*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 612 of 642 and shellfish of no more than 2524 percent mortality, including latent mortality, for all non-fragile species together that are collect ed or retained in a sieve with maximum opening dimension of 0.56 inches and kept for a holding period of 18 to 96 hours. The Director may, however, prescribe an alternative holding period. The annual average of impingement mortality is calculated as the sum of total impingement mortality for the previous 12 months divided by the sum of to tal impingement for the previous 12 months. The owner or operator of the facility must choose whether to demonstrate compliance with this requirement for the entire facilit y, or for each individual cooling water intake structure for which (c)(7) is the selected impingement mortality requirement. You must conduct biological monitoring at a minimum fr equency of monthly to demonstrate your impingement mortality performance. Note: the annual impingement mortality performance standard does not authorize take of threatened or endangered species. The Director may require additional measures to protect threatened and endangered species, as provided in (c)(8) of this section;Each month, you must use all of the monitoring data collected during the previous 12 months to calculate the 12- month survival percentage. The 12-month impingement mortality performan ce standard is the total number of fish killed divided by the total num ber of fish impinged over th e course of the entire 12 months. The owner or operator of the fac ility must choose whether to demonstrate compliance with this requirement for the enti re facility, or for each individual cooling water intake structure for which (c)(7) is the selected impingement mortality requirement.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 613 of 642 (8) Additional measures to protect threatened and endangered species . The Director may require additional measures as best technology available to minimize impingement mortality if the Director determ ines that your compliance with applicable requirements of this section would not protect threatened and endangered (T&E) species. Nothing in this subpart authorizes the ta ke, as defined at 16 U.S.C. 1532(19), of threatened or endangered wildlife. Such take is prohibited unless it is exempted pursuant to 16 U.S.C. 1536(o) or permitted pursuant to 16 U.S.C. 1539(a). Absent such an exemption or permit, any facili ty operating under the authorit y of this subpart must not take threatened or endangered wildlife. Through coordination w ith the appropriate National Marine Fisheries Service or United St ates Fish and Wildlife Service office, the owner or operator of an existing facility without an exemption pursuant to 16 U.S.C. 1536(o) or permit pursuant to 16 U.S.C. 1539(a) must select and implement additional design and construction technologies or operational measures for minimizing impingement mortality of fish and shellfish, where appropriate, if: (i) There are threatened or endangered or otherwise protected federal, state, or tribal species, or critical ha bitat for these species, within the hydraulic zone of influence of the cooling water in take structure; or (ii) Based on information submitted to the Director by any fishery management agency or other relevant information, there are migratory or sport or commercial species subject to impingement that pass through the hy draulic zone of influence of the cooling water intake structure; or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 614 of 642 (iii) It is determined by the Director, based on information submitted by any fishery management agencies or other rele vant information, that the facility, after meeting the technology-based performance re quirements in § 125.94(c) of this section, would still contribute unacceptable stress to th e protected species, or critical habitat of those species.

(9) Additional measures for shellfish. The Director may require additional measures, such as seasonal deployment of barrier nets, to prot ect shellfish. (8) Additional measures for shellfish. The owner or operator must comply with any additional measures, such as seasonal depl oyment of barrier nets, established by the Director to protect shellfish. (9) Additional measures for other species . The owner or operator must comply with any additional measures, established by the Director, to protect fragile species. (10) Reuse of other water for cooling purposes. This impingement mortality standard does not apply to thatportion of cooling wa ter that is process water, gray water, waste water, reclaimed water, or other waters reused as cooling water in lieu of water obtained by marine, estuarine, or freshwater intakes. (11) Additional measures for fragile species . The Director may require additional measures to protect fragile species. (12) De minimis rate of impingement . In limited circumstances, rates of impingement may be so exceptionally low at a facility that additional impingement controls may not be justified. In such circumstances, theThe Director, based on review*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 615 of 642 of site-specific data submitted under 40 CFR 122.21(r ) and where no threatened or endangered species may be present,), may conclude that the documented rate of impingement at the cooling water intake is so low that no additional controls are warranted. For threatened or endangered spec ies, all unauthorized take is prohibited by the Endangered Species Act of 1973 ( ESA; 7 U.S.C. § 136, 16 U.S.C.16 U.S.C. § 1531 et seq.). Notice of a determination that no a dditional impingement controls are warranted must be included in the draft or proposed permit and the Director’s response to all comments on this determination must be incl uded in the record for the final permit. ( 1312 ) Low capacity utilization power generating units used only in emergency
circumstances.. If an existing facility has a c ooling water intake structure used exclusively for one or more existing electric generating units , each with an annual average capacity utilization ratingrate of less than 8 percent for each of the previous 5 years, and the generating units are used sole ly for emergency purposes, as defined at § 125.92averaged over a 24-month block contiguous period , the owner or operator may request that the Director establishconsider less stringent requirements for impingement mortality for that cooling water intake stru cture. The Director ma y, based on review of site-specific data concerni ng cooling water system data under 40 CFR 122.21(r)(5), establish the BTA standards for impingement mortality for that cooling water intake structure that are less stringent than (c)(1) tothrough (c)(7) above. This provision does not apply to those electric generating units run when there is a high demand or peak demand for electricity, such as seas onally operated peaking units.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 616 of 642 (d) BTA standards for entrainmen t for existing facilities. The Director must establish BTA standards for entrainment for each intake on a site-specific basis. These standards must reflect the Director’s determination of the maximum reduction in entrainment warranted after consideration of the relevant factors as specified in § 125.98. The Director may also require periodic re porting on your progress towards installation and operation of site-specific entrainment c ontrols. These reports may include updates on planning, design, and construction or other appr opriate topics as re quired by the Director. If the Director determines that the site-spe cific BTA standard for entrainment under this paragraph requires performance equivalent to a closed-cycle recirculating system as defined at § 125.92 ,(c), then under § 125.94(c)(1) your facility will comply with the impingement mortality standard for that intake. Nothing in this subpart authorizes the take, as defined at 16 U.S.C. 1532(19), of threat ened or endangered wildlife. Such take is prohibited unless it is exempted pursuant to 16 U.S.C. 1536(o) or permitted pursuant to 16 U.S.C. 1539(a). Absent such an exemption or perm it, any facility operating under the authority of this subpart must not take thre atened or endangered wildlife. In addition, the owner or operator of an existing facility must select and implement design and construction technologies or operational measures for minimizing entrainment of entrainable life stages of fish and shellfish if: (i) There are threatened or endangered or otherwise protected federal, state, or tribal species, or critical ha bitat for these species, within the hydraulic zone of influence of the cooling water in take structure; or*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 617 of 642 (ii) Based on information submitted by any fishery management agency or other relevant information, there are or would be undesirable cumulative stressors affecting entrainable life stages of species and the Director determines th at the facility, after meeting the entrainment standard of this section, would still contribute unacceptable stress to the protected species, or critical habitat of those species. (e) BTA standards for impingement mortality and entrainment for new units at existing facilities. The owner or operator of a new unit at an existing facility must achieve the impingement mortality and entrainment standards provided in either paragraph (e)(1) or (e)(2) of this section, excep t as provided in paragraph (e)( 34 ) of this section , for each cooling water intake structure used to provide cooling water to the new unit

. (1) Requirements for new units. The owner or operator of athe facility must reduce the design intake flow for the new un it, at a minimum, to a level commensurate with that which can be attained by the use of a closed-cycle recirc ulating system for the same level of cooling for the new unit. (2) Alternative requirements for new units. The owner or operator of a new unit at an existing facility must demonstrate to the Director that it will operate and maintain the technologies for the intake flow serving the ne w unit that and operational measures employed will reduce the level of adverse environmenta l impact from any cooling water intake structure used to supply cooling water to the new unit to a comparable level to that which would be achieved under § 125.94(e)(1). This demonstration must include a showing that the entrainment of all stages of fish and shel lfish that pass a sieve with a maximum opening dimension of 0.56 inches. The owner or operator of a facility must*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 618 of 642 demonstrate entrainment reductionsreduction is equivalent to 90 per cent or greater of the reduction that could be achieved through compliance with paragraph § 125.94 (e)(1 ) of). In addition this section.demonstration must include a s howing that the impacts to fish and shellfish, including important fo rage and predator species, w ithin the watershed will be comparable to those which would result under the requirement s of § 125.94(e)(1). (3) This standard does not apply to: (i) Process water, gray water, waste wa ter, reclaimed water, or other waters reused as cooling water in lieu of water obt ained by marine, estuarine, or freshwater intakes; (ii) Cooling water used by manufacturi ng facilities for contac t cooling purposes; (iii) Portions of those water withdr awals for auxiliary plant cooling uses comprising less than two mgd of the facility’s flow; and (iv) Any quantity of emergency back-up water flows. (4) The Director may establish alternativ e requirements if the data specific to the facility indicate that comp liance with the requirements of paragraphs (e)(1) or (2) of this section for each new unit would result in compliance co sts wholly out of proportion to the costs EPA considered in establishing the requirements at issu e or would result in significant adverse impacts on local air qualit y, significant adverse impacts on local water resources other than impingement or entrainm ent, or significant adverse impacts on local energy markets; (i) The alternative requirements must achie ve a level of performance as close as practicable to the requirements of paragr aphs (e)(1) or (2) of this section;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 619 of 642 (ii) The alternative requirements will en sure compliance with other provisions of the Clean Water Act and other federal statutes, including, wh ere applicable, the Endangered Species Act which prohibits the take of threatened and endangered species, unless it is authorized by an Incidental Take Statement (50 CFR 402.14(i)) or a Section 10 permit (50 CFR 222.307) issued by the Fish and Wildlife Service or the National Marine Fisheries Service, and any a pplicable requirement of state law; (iii) The burden is on the owner or op erator of the facility requesting the alternative requirement to demonstrate that alternative requirements should be authorized for the new unit. (5) In addition, the (4) The owner or operator of a new unit at an existing facility

must select and implement design and constructi on technologies or operational measures for minimizing entrainment of entrainable li fe stages of fish and shellfish if: (i) There are threatened or endangered or otherwise protected federal, state, or tribal species, or critical ha bitat for these species, within the hydraulic zone of influence of the cooling water in take structure; or (ii) Based on information submittedcomply with any alternative requirements established by any fishery management agency or othe r relevant information, there are or would be undesirable cumulative stressors affect ing entrainable life st ages of species and the Director determines that the facility, after mee ting the entrainment standard of this section, would still contribut e unacceptable stresspursuant to the protected species or critical habitat of those species.§ 125.98(b)(7).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 620 of 642 ( 65 ) For cooling water flows excluded by pa ragraph (e)(3) of this section, the Director may establish additional BTA standards for impingement mortality and entrainment on a site-specific basis. (f) Nuclear facilities. If the owner or operator of a nuclear facility demonstrates to the Director, upon the Director’s c onsultation with the Nuclear Regulatory Commission, the Department of Energy, or th e Naval Nuclear Propulsion Program, that compliance with this subpart would result in a conflict with a safety requirement established by the Commission , the Department, or the Program , the Director must make a site-specific determination of best technology available for minimizing adverse environmental impact that would not resu lt in a conflict with the Commission’s , the Department’s, or the Program’s safety requirement. (g (g) Additional measures to protect Federally-listed threatened and endangered species and desi gnated critical habitat . The Director may establish in the permit additional control measures, monito ring requirements, and reporting requirements that are designed to minimize incidental take, reduce or remove more than minor detrimental effects to Federally-listed species and designated critical habitat, or avoid jeopardizing Federally-listed species or de stroying or adversel y modifying designated critical habitat (e.g., prey base). Such c ontrol measures, monitoring requirements, and reporting requirements may include measur es or requirements identified by an appropriate Field Office of the U.S. Fish a nd Wildlife Service and/or Regional Office of the National Marine Fisheries Service duri ng the 60 day review period pursuant to § 125.98(h) or the public notice and comment period pursuant to 40 CFR 124.10. Where*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 621 of 642 established in the permit by the Director, the owner or operator must implement any such requirements. (h ) Interim BTA requirements . An owner or operator of a facility may be subject to interim BTA requirements established by th e Director in the permit on a site-specific basis. ( hi ) More stringent standards. The Director must es tablish more stringent requirements as best technology available fo r minimizing adverse environmental impact if the Director determines that your compliance with the applicable requirements of this section would not meet the requi rements of applicable State or Tribal law, including compliance with applicable water quality stan dards (including designated uses, criteria, and antidegradation requirements ), Tribal law, or other Fe deral law (including but not limited to the Endangered Species Act, Mari ne Mammal Protection Act, Coastal Zone Management Act, and the Magnuson-Stevens Fishery Conservation and Management Act).). (j) The owner or operator of a f acility subject to this subpart must: (i) The owner or operator of a fac ility subject to this subpart must: (1) Submit and retain permit application and supporting information as specified in § 125.95; (2) Conduct compliance monitori ng as specified in § 125.96; and (3) Report information and data and keep records as specified in § 125.97. § 125.95 Permit application and supporting information requirements. (a) Permit application submittal timeframe for existing facilities.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 622 of 642 (1) The owner or operator of a f acility subject to this subpart applying for reissuance of awhose currently effective permit expiringexpires after December 31, 2016, [INSERT date 45 months after eff ective date of the final rule] , must submit to the Director the information required in the applicable provisions of 40 CFR 122.21(r) to the Director no later than 180 days before the current permit expires.when applying for a subsequent permit (consistent with the owner or operator’s duty to reapply pursuant to 40 CFR 122.21(d)). (2) The owner or operator of a f acility subject to this subpart applying for reissuance of a whose currently effective permit expiringexpires prior to or on December 31, 2016, [INSERT date 45 months after eff ective date of the final rule] , may request the Director to establish an alternate sc hedule for the submission of the information required in 40 CFR 122.21(r ).) when applying for a subsequent permit (consistent with the owner or operator’s duty to reapply pursuant to 40 CFR 122.21(d)). If the owner or operator of the facility demonstrates that it could not develop the required information by the applicable date for submission, the Director must establish an alternate schedule for submission of the required information. (3) The Director may waive some or a ll of the information requirements of 40 CFR 122.21(r) if the intake is located in a manmade lake or reservoir , and the fisheries are stocked and managed by a State or Federal natural resources agency or the equivalent. If the manmade lake or reservoir contains Federally-listed thr eatened and endangered species, or is designated critical habita t, such a waiver shall not be granted.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 623 of 642 (b) Permit application submittal timeframe for new units. For the owner or operator of any new unit at an existing facility subject to this subpart: (1) If you choose to comply withYou must submit the entrainment standards under § 125.94(e)(1), yo u must update the information required in 40 CFR 122.21(r )(2), (r)(3), (r)(4), (r)(5), applicable provisi ons of (r)(6), and (r )(8) specific to) for the new unit and must submit to the Director no later than 180 days before the planned commencement of cooling water withdraw als for the operation of the new unit. If you have already submitted the required information in your previous permit application, you may choose to submit an update to the required information. (2) If you choose to comply with the entrainment st andards under § 125.94(e)(2), you must submit 40 CFR 122.21(r)(9) to (r)(13) no later than 180 days before the planned commencement of cooli ng water withdrawals for the operation of the new unit. (c) Subsequent permit applications . (2) The owner or operator is encouraged to submit their permit applications well in advance of the 180 day requirement to avoid delay. (c) Permit applications

. After the initial submission of the 40 CFR 122.21(r) permit application studies after [ INSERT effective date of final rule] , the owner or operator of a facility may, in subsequent permit applications, request to reduce the information required, if conditions at th e facility and in the waterbody remain substantially unchanged since the previous application so long as the relevant previously submitted information remains representative of current source water, intake structure,*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 624 of 642 cooling water system, and operating conditions. AnyAny habitat designated as critical or species listed as threatened or endangered after issuance of th e current permit whose range of habitat or designated critical habi t includes waters where a facility intake is located constitutes potential for a substantial change that must be addressed by the owner/operator in subsequent permit applic ations, unless the facility received an exemption pursuant to 16 U.S.C. 1536(o) or permitteda permit pursuant to 16 U.S.C. 1539(a) or it was determined that there is no reasonable expect ation of take. The owner or operator of a facility must submit its request for reduced cooling water intake structure and waterbody application information to the Director at least two years and six months prior to the expiration of its NPDES permit. The owner or operat or’s request must identify each element in this subsection that it determines has not substantially changed since the previous permit application and th e basis for the determination. The Director has the discretion to accept or reje ct any part of the request. (d) The Director has the discretion to request additional information to supplement the permit application process , including inspection of thea request to inspect

a facility. (e) Permit application records. The owner or operator of a facility must keep records of all submissions that are part of its permit application until the subsequent permit is issued to document compliance with the requirements of this section. If the Director approves a request for reduced pe rmit application studies under § 125.95(a) or (c) or § 125.98(g), the owner or operator of a facility must keep records of all*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 625 of 642 submissions that are part of the previous permit application until the subsequent permit is issued. (f) In addition, in developing its permit application, the owner or operator of an existing facility or new unit at an existing facility must, based on readily available information at the time of the permit applica tion, instead of the information required at § 122.21(r)(4)(vi) identify all Federally-listed threatened and endangered species and/or designated critical habitat that are or may be present in the action area. (g) Certification . The owner or operator of a facility must certify that its permit application is true, accurate and co mplete pursuant to § 122.22(d). § 125.96 Monitoring requirements. (a) Monitoring requirements for impingement mortality for existing facilities. The Director may establish monitoring require ments in addition to those specified at § 125.94(c), including, for example, biological monitoring, intake velocity and flow measurements. If the Director establishes su ch monitoring, the specific protocols will be determined by the Director. (b) Monitoring requirements fo r entrainment for existing unitsfacilities

.Monitoring requirements for entrainment will be determined by the Director on a sitespecific basis, as appropriate, to meet requirements under § 125.94(d). (c) Additional monitoring requirements for existing unitsfacilities . The Director may require additional monitoring for impi ngement or entrainment including, but not limited to, the following:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 626 of 642 (1) The Director may require additional monitoring if there are changes in operating conditions at the f acility or in the source water bodywaterbody that warrant a re-examination of the operational co nditions identified at 40 CFR 122.21(r). (2) The Director may require additional monitoring for species not subject to the BTA requirements for impingement mortality at § 125.95(c). Such monitoring requirements will be determined by the Director on a site-specific basis. (d) Monitoring requirements for new units . at existing facilities. Monitoring is required to demonstrate compliance with the requirements of § 125.94( c) and § 125.94( e). (1) The Director may establish monitoring requirements for impingement , impingement mortality , and entrainment of the commercial, recreational, and forage base fish and shellfish species identified in addition tothe Source Wate r Baseline Biological Characterization data required by 40 CFR 122.21(r)(4). Monitoring methods used must be consistent with those specified at § 125.94(c), including,used for example, biological monitoring, intake velocity and flow measurem ents.the Source Water Baseline Biological Characterization at 40 CFR 122.21(r)(4). If the Director establishes such monitoring , the requirements, the frequency of monitoring and specific protocols will be determined by the Director. (2) If your facility is subject to the requirements of § 125.94(e)(1 ) or (2 ), the frequency of flow monitoring and velocity monitoring must be daily and must be representative of normal operating conditions . Flow monitoring must include measuring*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 627 of 642 cooling water withdrawals, make-up water, and blowdown volume. The Director may require additional monitoring necessary to demonstrate compliance with § 125.94(e). (3) If your facility is subject to the requirements of § 125.94(e)(2), you must continue to monitor to demonstrate achievement of reductions commensurate with a closed-cycle recirculating system. You mu st monitor entrainable organisms at a proximity to the intake that is representative of the entrainable organisms in the absence of the intake structure. You must also monito r the latent entrainment mortality in front of the intake structure. Mortality after passing the cooling water intake structure must be counted as 100 percent mortal ity unless you have demonstrated to the approval of the Director that the mortality for each species is less than 100 percent. Monitoring must be representative of the cooling water intake when the stru cture is in operation. In addition, sufficient samples must be collected to allow for calculati on of annual average entrainment levels of all life stages of fish and shellfish. Specific monitoring protocols and frequency of monitoring will be determ ined by the Director. You must follow the monitoring frequencies identifie d by the Director for at leas t two years after the initial permit issuance. After that time, the Direct or may approve a reque st for less frequent monitoring in the remaining year s of the permit term and when thea subsequent permit is reissued. The monitoring must measure the total count of entrai nable organisms or density of organisms, unless the Director approves of a different metric for such measurements. In addition, you must monitor the AIF for each intake. The AIF must be measured at the same time as the samples of entrainable organisms are collected. The*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 628 of 642 Director may require additional monitoring necessary to demonstrate compliance with § 125.94(e). (4) The Director may require additi onal monitoring for impingement or entrainment at the cooling wa ter intake structure used by a new unit including, but not limited to, the following: (i) The Director may require additional monitoring if there are changes in operating conditions at the f acility or in the source water bodywaterbody that warrant a re-examination of the operational co nditions identified at 40 CFR 122.21(r). (ii) The Director may require additional monitoring for species not subject to the BTA requirements for impingement mortality at § 125.95(c). Such monitoring requirements will be determined by the Director on a site-specific basis. (e) Visual or remote inspections. You must either conduct visual inspections or employ remote monitoring devices during the pe riod the cooling water intake structure is in operation. You must conduct such inspections at least we ekly to ensure that any technologies operated to comply with § 125.94 are maintained and operated to function as designed . including those installed to protect Fe derally-listed threaten ed or endangered species or designated critical habitat. The Director may establish alternative procedures if this requirement is not feasible (e.g., an offs hore intake, velocity cap, or during periods of inclement weather). (f) Request for reduced monitoring . For facilities that are subject to § 125.94(c)(7 ),) and where the facility’s cooling water intake structure does not directly or indirectly affect Federally-listed threaten ed and endangered species, or designated*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 629 of 642 critical habitat, the owner or operator of the facility may request the Director to reduce monitoring requirements after the first full permit term in which these monitoring requirements are implemented, on the condition th at the results of the monitoring to date demonstrate that the owner or operator of the f acility has consistently operated the intake as designed and is meeting the requirements of § 125.94(c). (g) Additional monitoring related to Fe derally-listed threatened and endangered species and designated critical habit at at existing facilities. Where the Director requires additional measures to protect Federally-lis ted threatened or endangered species or designated critical habitat pur suant to § 125.94(g), the Direct or shall require monitoring associated with those measures. § 125.97 Other permit reporting and recordkeeping requirements. The owner or operator of an existing facility subject to this subpart is required to submit to the Director the following information: (a) Monitoring reports. You must include with your Discharge Monitoring Reports (DMRs) (or equivalent State reports) and results of all monitoring, demonstrations, and other information required by yourthe permit sufficient to determine compliance with the permit conditions and requirements established under § 125.94. (b) Status reports

. You must submit any statusAny reports required by the Director under § 125.94 (d).. (c) Annual certification statement and report

. You must submit anAn annual certification statement signed by the respons ible corporate officer as defined in 40 CFR 403.12(l) or § 122.22 subject to the following:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 630 of 642 (1) If the information contained in th e previous year’s annual certification is still pertinent, you may simply state as such in a letter to the Direct or and the letter, along with any applicable data subm ission requirements specified in this section shall constitute the annual certification. (2) If you have substantially modified operation of any unit at your facility that impacts cooling water withdrawals or operati on of your cooling wate r intake structures, you must provide a summary of those changes in the report. In addition, you must submit revisions to the information required at § 122.21(r) in your next permit application. (d) Permit reporting records retention

. your report. In addition, you must submit revisions to the information re quired at § 122.21(r) in your next permit application. (d) Permit reporting records retention

. You must keep recordsRecords of all submissions that are part of the perm it reporting requirements of this section must be retained until the subsequent permit is issued. In addition, the Dir ector may require supplemental recordkeeping such as compliance monitoring under § 125.96, supplemental data collection under §40 CFR 122.21, additional monitoring or data collection under § 125.95. (e) Reporting. The Director has the disc retion to require additional supplemental permit reporting when necessary to es tablish permit compliance and may provide for periodic inspecti on of the facility. The Dire ctor may require additional supplemental reporting including but not limited to the records required under § 125.97(d).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 631 of 642 (f) Records of Director’s Determ ination of BTA for Entrainment. You must keep allAll records supporting the Di rector’s Determination of BTA for Entrainment under § 125.98(f) or (g) must be retained until such time as the Director revises the Determination of BTA for Entrainment in yourthe permit. (g) Additional reporting requirements relate d to Federally-listed threatened and endangered species or desi gnated critical habitat. Where the Director requires additional measures to protect Federally-listed threaten ed or endangered species or critical habitat pursuant to § 125.94(g), the Director shall require reporting associated with those

measures. § 125.98 Director requirements. (a) Permit application . The Director must review the materials submitted by the applicant under §40 CFR 122.21(r) for completeness pursuant to 40 CFR 122.21(e) at the time of initial permit application and before each permit renewal or reissuance. The Director may waive submission of the info rmation at 122.21(r)(11) if the Director chooses not to consider benefits in rela tion to costs in entrainment BTA decision making.any application for a subsequent permit. (b) Permitting requirements. (b) Permitting requirements. Section 316(b) requirements are implemented through an NPDES permit. Based on the information submitted in the permit applic ation, the Director must determine the requirements and conditions to include in the permit. (1) Such permits, including permits with alternative requirements under paragraph (7), must include the following la nguage as a permit condition: “Nothing in*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 632 of 642 this permit authorizes take for the purpos es of a facility’s compliance with the Endangered Species Act.” (2) In the case of any permit issued after December 31, 2016, [INSERT date 45 months after effective da te of the final rule] , at a minimum, the permit must include conditions to implement and ensure complian ce with the impingement mortality standard at § 125.94(c) and the entrai nment standard at § 125.94(d ) that ), includ ing any measures to protect Federally-listed th reatened and endangered spec ies and designated critical habitat required by the Director determines applies to the facility.. In addition, the permit must include conditions, management practices and operational meas ures necessary to ensure proper operation of any technology used to comply with the impingement mortality standard at § 125.94(c) and th e entrainment standard at § 125.94(d). Pursuant to § 125.94(g), the permit may include a dditional control measures, monitoring requirements, and reporting requirements that are designed to minimize incidental take, reduce or remove more than minor detrimenta l effects to Federally-listed species and designated critical habitat, or avoid jeopardiz ing Federally-listed speci es or destroying or adversely modifying designated cr itical habitat (e.g. prey base ). Such control measures, monitoring requirements, and reporting re quirements may include measures or requirements identified by the U.S. Fish and Wildlife Service and/or the National Marine Fisheries Service during the 60 day review period pursuant to § 125.98(h) or the public notice and comment period pursuant to 40 CFR 124.10. The Director may include additional permit requirements if:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 633 of 642 (2) (i) Based on information submitted to the Director by any fishery management agency or other relevant info rmation, there are migratory or sport or commercial species subject to en trainment that may be directly or indirectly affected by the cooling water intake structure; or (ii) It is determined by the Director, based on information submitted by any fishery management agencies or other relevant information, that opera tion of the facility, after meeting the entrainment standard of th is section, would still result in undesirable cumulative stressors to Federally-listed and pr oposed, threatened and endangered species, and designated and propos ed critical habitat. (3) At a minimum, the permit must require the permittee to perform the monitoring monitor as required at § 125.94 and § 125.96. ( 34 ) At a minimum, the permit must re quire the permittee to report and keep the records specified at § 125.97. ( 45 ) After [ INSERT effective date of the final rule] , in the case of any permit issued before December 31, 2016 [INSERT date 45 months aft er effective date of the final rule] for which the Director, pursuant to § 125.95(a)(2), has established an alternate schedule for submission of the information required by 40 CFR 122.21(r), the Director may include permit conditions to ensure that, for any subsequent permit, the Director will have all the information required by 40 CFR 122.21(r) necessary to establish impingement mortality and entrainment BTA requirements under § 125.94(c) and (d). In addition, the Director must es tablish interim BTA requirements in the permit based on the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 634 of 642 Director’s best professional judgment on a site-specific basis in accordance with § 125.90(b) and §40 CFR 401.14. (5 (6 ) In the case of any permit issued after [ INSERT effective date of the final rule] , and applied for before [ INSERT effective date of the final rule], the Director may include permit conditions to ensu re that the Director will have all the information under 40 CFR 122.21(r) necessary to establish impingement mortality and entrainment BTA requirements under § 125.94(c) and (d) for the subsequent permit. The Director must establish inte rim BTA requirements in the permit on a site-specific basis based on the Director’s best professional judgment on a site-specific basis in accordance with § 125.90(b) and §40 CFR 401.14. (7) For new units at existing facilities , the Director may establish alternative requirements if the data specific to the f acility indicate that compliance with the requirements of paragraphs (e)(1) or (2 ) of § 125.94 for each new unit would result in compliance costs wholly out of proportion to th e costs EPA considered in establishing the requirements at issue, or would result in significant adverse impact s on local air quality, significant adverse impacts on local water resources other than impingement or entrainment, or significant adve rse impacts on local energy markets: (i) The alternative requirements must achie ve a level of performance as close as practicable to the requirements of paragraph (e)(1) of § 125.94; (ii) The alternative requirements must ensure compliance with these regulations, other provisions of the Clean Wate r Act, and State and Tribal law;*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 635 of 642 (iii) The burden is on the owner or op erator of the facility requesting the alternative requirement to demonstrate that alternative requirements should be authorized for the new unit. (8) The Director may require additional measures such as seasonal deployment of barrier nets, to protect shellfish. (c) Compliance schedule . When the Director establishes a schedule of requirements under § 125.94(b), the schedule must provide for compliance with § 125.94(c) and (d) as soon as possiblepracticable . When establishing a schedule for electric power generating fac ilities, the Director should cons ider measures to maintain adequate energy reliability and necessary grid reserve capacity during any facility outage. These may include establishing a staggered schedule for multip le facilities serving the same localities. The Director may confer w ith independent system operators and state public utility regulatory agencies when es tablishing a schedule for electric power generating facilities. The Director may dete rmine that extenuating circumstances (e.g., lengthy scheduled outages, future production sc hedules) warrant establishing a different compliance date for any manufacturing facility. (d) Supplemental Technologies and Monitoring. The Director may require additional technologies for pr otection of fragile species , and may require additional monitoring of species of fish and shellfish not already required under § 125.95(c). The Director may consider data submitted by other interested parties. The Director may also require additional study and monitoring if a th reatened or endangered species has been identified in the vicinity of the intake.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 636 of 642 (e) Impingement technology perf ormance optimization study

. If theThe owner or operator of a facility that chooses to comply with § 125.94(c)(5) or (6 ), the Director may find that the) must demonstrate in its impingement technology performance optimization study does not demonstrate that the operation of its impingement reduction technology has been optimized to minimize impingement mortality . If the Director concludes that the study does not establish that the proposed t echnology is the best technology available for impingement reduction for the site, she must determine other impingement reduction controls for the facilit y. The Director will notify the U.S. Fish and Wildlife Service and National Marine Fisheries Service in instances where threatened or endangered of non-fragile species are identified in the st udy during the public notice period in accordance with § 124.10.. The Director may request further monitoringdata collection and information as part of the impingement technology performance optimization study , including extending the study peri od beyond two years. The Director
may also consider previously collected biological monitoring data and performance reviews as part of the study. The Di rector must include in the permit those operational measures and BMPs identified in the study a nd deemed as necessary by the Director to verifiable and enforceable permit conditions that ensure optimized operation of the modified traveling screens or other systems of technologies . will perform as demonstrated. The Director may waive all or part of the Impingement impingement technology performanc e optimization study at 40 CFR 122CFR122 .21(r)(6) after the first permit cycle wherein the permiteepermittee is deemed in compliance with 124125 .94(c).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 637 of 642 (f) Site-specific entrainment requirements . The Director must establish sitespecific requirements for entrainment after reviewing the information submitted under 40 CFR 122.21(r) and § 125.95. These entrainment requi rements must reflect the Director’s determination of the maximum reduction in en trainment warranted af ter consideration of factors relevant for determining the best technology available for minimizing adverse environmental impact at each facility. These entrainment requirements may also reflect any control measures to reduce entrainm ent of Federally-listed threatened and endangered species and designated crit ical habitat (e.g. prey base). The Director may reject an otherwise available technology as a basis for entrainment requirements if the Director determines there are unacceptable adverse impacts that cannot be mitigated.including impingement, entrainment, or other adverse effects to Federallylisted threatened or endangered specie s or designated critical habitat. Prior to any permit reissuance after December 31, 2016,[ INSERT date 45 months after effective date of final rule ], the Director must review the perf ormance of the facility’s installed entrainment technology to determine whether it continues to meet the requirements of § 125.94(d). (1) The Director must provide a written explanation of the proposed entrainment determination in the fact sheet or statement of basis for the proposed permit under 40 CFR 124.7 or 124.8. The written explana tion must describe why the Director has rejected any [ entrainment ] control technologies or measures that perform better than the selected technologies or measures, and mu st reflect consideration of all reasonable*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 638 of 642 attempts to mitigate any adverse impacts of otherwise available better performing entrainment technologies. (2) The proposed determinat ion in the fact sheet or st atement of basis must be based on consideration of a ny additional information re quired by the Director at § 125.98(i) and the following factors listed below. The weight given to each factor is within the extentDirector’s di scretion based upon the applicant submitted information under 40 CFR 122.21(r), and in subsequent permit cycles, § 125.96 and § 125.97:circumstances of each facility. (i) Numbers and types of organisms entrained ;, including, spec ifically, the numbers and species (or lowest taxonomic cl assification possible) of Federally-listed, threatened and endangered species, and desi gnated critical hab itat (e.g., prey base); (ii) Impact of changes in particulate emissions or other pollutants associated with entrainment technologies; (iii) Land availability inasmuch as it re lates to the feasibility of entrainment technology; and (iv) Remaining useful plant life ; and (v) Quantified and qualitative social bene fits and costs of av ailable entrainment technologies when such information on both bene fits and costs is of sufficient rigor to make a decision

. (3) The proposed determinat ion in the fact sheet or statement of basis may be based on consideration of the following factors to the extent the applicant submitted information under 40 CFR 122.21(r) on these factors:*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 639 of 642 (i) Entrainment imp acts on the waterbody; (ii) Thermal discharge impacts; (iii) Credit for unit retirementsreductions in flow associated with the retirement of units occurring within the ten years preceding [INSERT effective date of the final rule] ; (iv) Impacts on the reliability of energy delivery within the immediate area; (v) Impacts on water consumption; and ( vvi ) Availability of process wa ter, gray water, waste wa ter, reclaimed water, or other waters of appropriate quantity and quality for reuse as cooling water. (4) In addition, the proposed determinat ion in the fact sheet or statement of basis may be based on consideration of other relevant factors, in cluding the quantified and qualitative social benefits and costs of available entrainment technologies, including ecological benefits and benefits to threat ened and endangered species so long as the applicant has submitted the information speci fied in § 122.21(r)(10), (11) and (13). (4) If all technologies considered have social costs no t justified by the social benefits, or have unacceptable adverse impacts that canno t be mitigated, the Director may determine that no additional control requirements are ne cessary beyond what the facility is already doing. The Director may reject an otherwise available technology as a BTA standardsstandard for entrainment if the social co sts are not justified by the social benefits. The Director may not reject an othe rwise available technology as a basis for entrainment requirements based on a comparison of social costs and social benefits if the information on benefits is inadequate or has been waived by the Director.*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 640 of 642 (5) If the appli cant is subject to 40 CFR 122.21(r) (1)(ii)(B) but does not submit all the application information required by 40 CFR 122.21(r)(1)(ii)(B) , the Director must base the site-specific BTA impingement mortality and entrainment requirement on the performance achieved by a clos ed-cycle recirculating system. (6) In instances where the Director determines that no additional control requirements are necessary for a given facility and the facility has been identified as likely having more than minor detrimental e ffects or contributing una cceptable stress to threatened or endangered species, the Director may coordinate with the U.S. Fish and Wildlife Service and National Marine Fisheries Service to in the selection of additional technologies or operational measures for the f acility. These additional requirements in no way authorize take, as defined at 16 U.S.C. 1532(19), as such take is prohibited unless it is exempted pursuant to 16 U.S.C. 1536(o) or permitted pursuant to 16 U.S.C. 1539(a). (g) Ongoing permitting proceedings . In the case of permit proceedings begun prior to [INSERT effective date of the final rule] whenever the Director has determined that the information already submitted by the owner or operator of the facility is sufficient, the Director may proceed with a determination of BTA standards for impingement mortality and entrainment without requiring the owner or operator of the facility to submit the information requi red in 40 CFR 122.21(r). The Director’s BTA determination may be based on some or all of the factors in (f)(2 ) and (3) and the BTA standards for impingement mortality at § 125.95(c). In making the decision on whether to require additional information from the appli cant, and what BTA requirements to include in the applicant’s permit for impingement mortality and site-specific entrainment, the*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 641 of 642 Director should consider whether any of the information at 40 CFR 122.21(r) is
necessary. (h) The Director must transmit all permit applications for facilities subject to Subpart J to the appropriate Field Office of the U.S. Fish and Wildlife Service and/or Regional Office of the National Marine Fi sheries Service upon receipt for a 60 day review prior to public notice of the dr aft or proposed permit. The Director shall provide the public notice and publican opportunity to comment period as required under 40 CFR
124.10 . and must submit a copy of the fact sheet or statement of basis (for EPA-issued permits), the permit application (if any) and the draft permit (if any) to the appropriate Field Office of the. Fish and Wildlife Serv ice and/or Regional Of fice of the National Marine Fisheries Service. This includes notice of specifi c cooling water intake structure requirements at 124.10( d)(1)( ix ) and notice of the draft pe rmit. ),notice of the draft permit, and any specific information the Di rector has about thr eatened or endangered species and critical habitat that are or ma y be present in the action area, including any proposed control measures and monitoring a nd reporting requirements for such species and habitat. (i) Additional information . In implementing the Direct or’s responsibilities under the provisions of this subpart, the Director is authorized to inspect the facility and to request additional information needed by the Director for determining permit conditions and requirements ., including any additional information from the facility recommended by the Services upon review of the pe rmit application unde r paragraph (h).*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release During Review***

Page 642 of 642 (j) In no event may any determination by the Director concerning applicable BTA standards authorizeNothing in this subpart authorizes the take, as defined at 16 U.S.C. 1532(19), of threatened or endangered species of fish or wildlife. Such take is prohibited under the Endangered Species Act unless it is exempted pursuant to 16 U.S.C. 1536(o) or permitted pursuant to 16 U.S.C. 1539(a). or harm to a listed critical habitat Absent such exemption or permit, any facili ty operating under th e authority of this regulation must not take thre atened or endangered wildlife

. (k) The Director must submit at least annually to the appropriate EPA Regional Office facilities’ annual reports submitted pursuant to § 125.97(g), for compilation and transmittal to the Services. § 125.99 [Reserved]