Document ID: EPA-HQ-OW-2008-0667-2863
Agency: epa
Document Type: Proposed Rule
Title: National Pollutant Discharge Elimination System - Proposed Regulations To Establish Requirements for Cooling Water Intake Structures at Existing Facilities; Notice of Data Availability Related to EPA's Stated Preference Survey
Posted Date: 2012-06-12T04:00Z

[Federal Register Volume 77, Number 113 (Tuesday, June 12, 2012)]
[Proposed Rules]
[Pages 34927-34931]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-14104]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 122, 123, 124, and 125

[EPA-HQ-OW-2008-0667, FRL-9681-5]
RIN 2040-AE95

National Pollutant Discharge Elimination System--Proposed 
Regulations To Establish Requirements for Cooling Water Intake 
Structures at Existing Facilities; Notice of Data Availability Related 
to EPA's Stated Preference Survey

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of data availability.

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SUMMARY: On April 20, 2011, EPA published proposed standards for 
cooling water intake structures at all existing power generating, 
manufacturing, and industrial facilities as part of implementing 
section 316(b) of the Clean Water Act (CWA). This notice presents a 
summary of new information EPA has developed since the rule proposal. 
The information results from a stated preference survey that EPA 
conducted after the proposed rule was published. Stated preference 
surveys are an attempt to determine the economic value of goods or 
services by means other than by assessing the effects of changes in the 
market for the goods and services. In this notice EPA solicits comment 
on the information presented in this notice and on what role, if any, 
it should play in EPA's assessment of the benefits of regulatory 
options for the final rule, pending completion of the survey and 
external peer review.

DATES: Comments must be received on or before July 12, 2012.

ADDRESSES: Submit your comments, identified by Docket No. EPA-HQ-OW-
2008-0667 by one of the following methods:
     http://www.regulations.gov: Follow the on-line 
instructions for submitting comments.
     Email: OW-Docket@epa.gov, Attention Docket ID No. EPA-HQ-
OW-2008-0667.
     Mail: Water Docket, U.S. Environmental Protection Agency, 
Mail Code: 4203M, 1200 Pennsylvania Ave. NW., Washington, DC 20460. 
Attention Docket ID No. EPA-HQ-OW-2008-0667. Please include a total of 
3 copies. In addition, please mail a copy of your comments on 
information collection provisions to the Office of Information and 
Regulatory Affairs, Office of Management and Budget (OMB), Attn: Desk 
Officer for EPA, 725 17th St. NW., Washington, DC 20503.
     Hand Delivery: Water Docket, EPA Docket Center, EPA West 
Building Room 3334, 1301 Constitution Ave. NW., Washington, DC, 
Attention Docket ID No. EPA-HQ-OW-2008-0667. Such deliveries are only 
accepted during the

[[Page 34928]]

Docket's normal hours of operation, and special arrangements should be 
made for deliveries of boxed information by calling 202-566-2426.
    Instructions: Direct your comments to Docket No. EPA-HQ-OW-2008-
0667. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Information that you consider to 
be CBI or otherwise protected should not be submitted through 
www.regulations.gov or email. The www.regulations.gov web site is an 
``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an email comment directly to EPA without 
going through http://www.regulations.gov your email address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Water Docket in 
the EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301 Constitution 
Ave. 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 technical information, 
contact Paul Shriner at 202-566-1076; email: shriner.paul@epa.gov. For 
additional economic information, contact Erik Helm at 202-566-1049; 
email: helm.erik@epa.gov or Wendy Hoffman at 202-564-8794; email: 
hoffman.wendy@epa.gov. For additional biological information, contact 
Tom Born at 202-566-1001; email: born.tom@epa.gov.

SUPPLEMENTARY INFORMATION: 

Supporting Documentation

A. Docket

    EPA has established an official public docket for this action under 
Docket ID No. 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 for which the disclosure is restricted by statute. 
For information on how to access materials in the docket, refer to the 
preceding ADDRESSES section. To view docket materials, please call 
ahead to schedule an appointment. Every user is entitled to copy 266 
pages per day before incurring a charge. The Docket may charge 15 cents 
for each page over the 266-page limit plus an administrative fee of 
$25.00.

B. Electronic Access

    You may access this Federal Register document and the docket 
electronically, as well as submit public comments, through the Web site 
http://www.regulations.gov by searching for Docket ID No. EPA-HQ-OW-
2008-0667. For additional information about the public docket, visit 
the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

Table of Contents

I. Purpose of This Notice
II. Willingness To Pay Survey
III. General Solicitation of Comment

I. Purpose of This Notice

    On April 20, 2011, EPA published proposed standards for cooling 
water intake structures at all existing power generating facilities and 
existing manufacturing and industrial facilities as part of EPA's 
implementation of its responsibilities under section 316(b) of the 
Clean Water Act (CWA), at 76 FR 22174. EPA received voluminous comments 
and data submissions during the 90-day public comment period. After 
many commenters requested additional time to review the proposal, on 
July 20, 2011, EPA extended the comment period by an additional 30 days 
(76 FR 43230).
    In today's NODA, EPA is providing additional preliminary data that 
may be relevant to the benefits of the rule, based on the results of a 
stated preference survey. Stated preference surveys are an attempt to 
determine the economic value of goods or services outside of the 
context of the marketplace. Simply described, a stated preference 
survey attempts to gauge the value of an item through questions 
designed to mimic consumer decision-making in actual markets. A stated 
preference survey, in this case, was used to measure values associated 
with ecosystem improvements. Such values were only partially monetized 
at proposal. The stated preference survey estimates the value held by 
the public for ecosystem improvements based on the choices the surveyed 
members of the public make between hypothetical policy options and 
current conditions. EPA solicits public comment on all aspects of the 
study, including the methodology used, the strengths and weaknesses of 
stated preferences methods generally, and the appropriate role, if any, 
the study should play in the analysis of the final rule.
    EPA notes that the preliminary results presented in this NODA are 
dependent on the background information that was presented to 
respondents to the stated preference survey, including information 
about regional and national impacts on aquatic resources both in the 
baseline and under various policy scenarios. Thus, these preliminary 
national and regional results are not directly transferable to site 
specific assessments.
    Section II provides a brief description of the stated preference 
survey to date, and refers to technical support documents available on 
EPA's Web site and in the docket for the proposal, which includes the 
data and a set of preliminary statistical results in which each 
respondent's answers are given similar weight, even as some groups may 
be over- or underrepresented. Such unweighted results are presented for 
the Northeast, Southeast, Inland, Pacific regions, and a national 
survey. EPA is making the preliminary results of this study available 
for public comment and peer review in order to inform its determination 
of whether to include these results in the benefits analysis for the 
final rule.
    This information is presented in more detail in a document referred 
to

[[Page 34929]]

hereinafter as the Survey Support Document (SSD) (DCN 11-4524). In 
addition to the unweighted models presented, EPA is also presenting 
preliminary weighted model results for the Northeast region. At the 
time this NODA was prepared, EPA had only developed weights for the 
Northeast region as it is the only region whose non-response study has 
been completed. The weights control for statistical differences between 
individuals who responded to the main survey and those individuals who 
did not respond. Weighted models for the remaining regions and the 
national surveys are not presented in the technical support documents, 
but will be made available to the public on EPA's Web site at a later 
date.
    EPA invites comment on the study's preliminary results, including 
the extent to which those results are consistent with previous studies 
of stated or revealed public preferences; ways of assessing the 
external validity of the underlying per household estimates and implied 
aggregate WTP, for example by comparison with estimates in the 
published literature of WTP for increased species abundance or other 
ecosystem attributes; and whether further analyses are needed, and if 
so what analyses might be most useful. EPA also invites comment on how 
the certainty associated with the environmental attributes in this 
survey accord with certainty levels in other stated preference surveys, 
and whether that could affect responses.
    EPA's rationale for the preferred regulatory option is detailed in 
the BTA Consideration section of EPA's proposal (76 FR 22174, Section 
VI). This notice is intended only to offer additional information 
collected as a result of conducting a stated preference survey. Several 
key elements of that proposal are worth restating. ``EPA concluded that 
closed cycle cooling is not the best technology available for 
minimizing adverse environmental impact on a national basis'' (76 FR 
22174, Section VI.E). ``Four factors, in particular, led EPA, for this 
proposal, to reject a uniform standard based on closed cycle cooling'' 
(76 FR 22174, Section VI.E). The four factors have not changed on the 
basis of data collected through the stated preference survey, nor does 
EPA anticipate that these factors would be changed by any revisions to 
the national or regional benefits analysis based on these data, if such 
revisions are made in the final rule. The four factors are energy 
reliability, air emissions, land availability, and remaining useful 
plant life, each of which should be evaluated on a localized basis.
    EPA's estimated benefits for this regulation in the original 
proposal were partial estimates only--EPA was not able to monetize all 
benefits, especially non-use benefits. As part of the proposal, EPA 
indicated it was in the process of developing a stated preference 
survey to estimate total willingness to pay (WTP) for improvements to 
fishery resources affected by impingement and entrainment (I&E) 
mortality from in-scope 316(b) facilities (75 FR 42438, July 21, 2010). 
EPA acknowledged it did not have sufficient time to fully develop and 
implement this survey for the proposed regulation (76 FR 22174). EPA 
indicated its intent to issue a Notice of Data Availability (NODA) 
pending survey implementation and data analysis. Section II provides an 
overview of this new data and preliminary analysis for the Northeast, 
Southeast, Inland, and Pacific regions as well as the national survey, 
and refers to the technical support documents on EPA's Web site. EPA 
presents a set of unweighted models that do not account for possible 
systematic variations between the populations of individuals that 
responded and did not respond to the surveys. The survey non-response 
assessment work has been completed for the Northeast region; therefore 
EPA presents a weighted model which statistically adjusts for the 
differences among those populations for that region. EPA has not yet 
completed the non-response assessments for the Pacific, Southeast, and 
Inland regions and the national survey. EPA does not plan to publish 
another NODA presenting the full set of adjusted results. Instead, EPA 
will post these results on its Web site at http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/. EPA encourages the interested public 
to monitor this web site periodically for additional information about 
the survey. EPA will also add the technical support documents to the 
docket for this rule, and interested parties may wish to sign up for 
the notification feature for this docket at regulations.gov, to be 
notified automatically via email when these results are posted.
    This notice is intended to apprise the public of the preliminary 
results of the stated preference survey, make this information 
available for public review, and provide an opportunity for the public 
to comment on this new information. EPA has not decided whether to use 
the results of the stated preference survey in the benefits analysis 
for the final rule. After completing the non-response studies, 
conducting scope and validity testing, and reviewing and responding to 
public comment, EPA will revise its results (including a summary of the 
public comments) and present these materials for external peer review. 
After making any additional revisions based on the peer review, EPA 
will determine whether the monetized benefits based on the stated 
preference survey should be included in the benefits analysis for the 
final rule, and if so, what role they should play. However, EPA notes 
that the Agency is not reopening the proposed rule for comment through 
this notice.

II. Willingness To Pay Survey

    In today's NODA, EPA is documenting the availability of data 
collected from a stated preference survey designed to facilitate the 
estimation of households' willingness to pay to reduce the number of 
fish impinged or entrained in cooling water intake structures. Stated 
preference methods provide a non-market approach to quantifying values 
associated with ecosystem improvements, such as increased protection of 
aquatic species or the restoration of habitats with specific 
attributes. These methods rely on an analysis of responses to survey 
questions through which individuals state information about their 
values.
    Estimation of monetized non-use benefits is challenging, since 
market proxies are generally not available, and in the absence of such 
proxies, they can only be estimated by using either stated preference 
methods or benefits transfer based on prior stated preference results. 
For this reason, non-use benefits are often discussed qualitatively 
instead of attaching monetized values to them. Today's notice presents 
data collected from a stated preference study (EPA ICR  
2402.01) that EPA conducted regarding total (use plus non-use) benefits 
from reductions in fish mortality at cooling water intake structures. 
EPA's peer-reviewed guidelines for benefits analysis (U.S. EPA 2010, 
pp. 7-41, DCN 11-4712) recognize ``advantages of [stated preference] 
methods includ[ing] their ability to estimate non-use values and to 
incorporate hypothetical scenarios that closely correspond to a policy 
case.''
    The data described in this NODA were collected using a stated 
preference survey based on a ``choice experiment'' design. Choice 
experiments involve asking survey respondents to indicate their most 
preferred option from a set of two or more hypothetical options and a 
``status quo'' or ``no policy'' option. The options differ in the 
levels of environmental improvements and

[[Page 34930]]

impose different costs on the respondent's household.
    Stated preference methods have ``* * * been tested and validated 
through years of research and are widely accepted by * * * government 
agencies and the U.S. courts as reliable techniques for estimating non-
market values'' (Bergstrom and Ready 2009, p. 26, DCN 11-4762). EPA's 
own peer reviewed Guidelines for Preparing Economic Analysis (US EPA 
2010, DCN 11-4712) indicates that the use of stated preference study 
data, when the study is conducted properly in accord with best current 
practices, is the only potential method for monetizing non-use values. 
Nonetheless, EPA recognizes that several issues have been raised 
regarding the estimation of welfare values from stated preference 
surveys. For example, the stated preference study discussed in this 
NODA creates a hypothetical market where respondents are asked to state 
their values for increases in ``fish saved'' in conjunction with 
increases in fish populations (total and commercial) and aquatic 
conditions by voting for or against alternative hypothetical policies 
that would regulate cooling water intake structures and that would 
impose increases in annual household cost of living. The issue of 
whether respondents are capable of respecting hypothetical budget 
constraints, knowing that their responses to the survey would not 
compel them to incur any costs, is a concern that has been cited as a 
reason to question the results of stated preference studies. The 
hypothetical nature of the market has raised questions as to whether 
this type of elicitation accurately reveals and elicits WTP associated 
with the good being considered.
    Substantial research has been conducted over the past two decades 
on hypothetical bias in stated preference surveys. While many studies 
have found evidence of hypothetical bias (List and Gallet 2001, DCN 11-
4763), a recent meta-analysis indicates that ``hypothetical bias in SP 
studies may not be as important'' as some have argued previously 
(Murphy et al. 2005, DCN 11-4764). This mirrors similar findings in 
prior studies that compare hypothetical and actual referenda (see 
discussion in Johnston 2006, DCN 11-4765). EPA solicits comment on the 
degree to which the potential for hypothetical bias may still be 
present in the 316(b) survey, and whether EPA has taken appropriate 
steps to ameliorate issues of bias and to what degree potential biases 
may have been reduced.
    Stated preference surveys also require the provision of information 
to enable respondents to comprehend the potential implications of their 
hypothetical choices. For example, in this case, respondents may not be 
aware that the ``fish saved'' by actions addressing cooling water 
intake structures include large numbers of eggs and larvae as well as 
fish, or that the vast majority of those organisms are species that 
provide no consumptive use (e.g., commercial or recreational fishing) 
to humans. Even if they are aware of this issue in a general way, it is 
unlikely that most respondents will have previously considered what 
preserving those species is worth to them. In order to elicit informed 
responses, it is necessary to provide information to respondents about 
the general context and scope of the issue. Following standard 
practice, EPA pretested the information provided to respondents in 
focus groups and cognitive interviews to determine what quantity and 
types of information were required by respondents in order to feel 
confident and well-informed in their responses (DCN 11-4710). For 
example, in the introductory materials accompanying the four regional 
and national stated preference surveys, EPA presents the number of 
``young adult fish'' (also called ``age-one-equivalents'') that are 
``lost'' in coastal and fresh waters due to cooling water use and notes 
that these losses include eggs and larvae. That educational material 
was designed to inform survey respondents that reported effects on 
``fish saved per year'' in the valuation questions partially result 
from reduced mortality of eggs and larvae. The presentation of this 
type of background information, if not properly vetted in the survey 
instrument development process, can result in focusing respondent 
attention on particular environmental amenities to the exclusion of 
other market and non-market goods that may also be important to some 
respondents' decision making with regard to the choice questions.
    Consistent with established best practices for stated preference 
surveys, EPA has sought to minimize possible biases by careful and 
thorough construction and testing of the survey instrument. The Agency 
recognizes that potential biases may still remain and may influence the 
results of the study. While in EPA's view, the study incorporates 
current best professional practice in the conduct of stated preference 
studies, EPA acknowledges that the results of any empirical study 
depend on the methodology applied. EPA has not yet completed its 
statistical analyses of these survey data and therefore has not 
determined whether the results of the stated preference survey will 
play a role in the benefits analysis for the final rule, and if so what 
role they will play. EPA requests comment on these issues.
    At the time this NODA was prepared, EPA had finished fielding all 
five versions of the main mail survey (four regional and one national). 
EPA undertook the Northeast version in advance of the other versions as 
a pilot study to inform potential changes to other survey versions, as 
described in the ICR for the 316(b) stated preference survey (EPA ICR 
2402.01) and as recommended in published guidance for stated 
preference survey design (Arrow et al. 1993, DCN 11-4701; Bateman et 
al. 2002, DCN 11-4702). As noted above, the preliminary results of the 
survey are available in the docket and at http://water.epa.gov/lawsregs/lawsguidance/cwa/316b/.
    EPA notes that the stated preference survey regions differ from the 
benefits regions used in the Environmental and Economic Benefits 
Assessment (EEBA) document for the proposed rule.\1\ The Agency will 
perform additional analysis comparing the results of the regional 
survey versions to the results of the national survey version. This 
additional analysis will allow EPA to look at the impacts of program 
size (regional vs. national) on willingness to pay and consider the 
implications of any differences for the validity of results. Before 
considering any application of this information in the final rule, EPA 
will also provide the full results and public comments to the planned 
peer-review panel. EPA does not regard these data as ready for 
consideration for use in any benefit cost analysis at this time until 
the results of additional EPA internal review, public comment and 
independent peer review have been completed. For the final benefits 
analysis, EPA may present a range for the total national benefit 
estimates produced by the stated preference research. Alternatively, 
EPA may decide not to use the results from this study, and instead to 
consider non-use benefits qualitatively and/or by using benefits 
transfer, as was done for the proposed rule.
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    \1\ See Exhibit II-3 of the Survey Support Document for a list 
of the states included in each region.
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    At the time this NODA was prepared, EPA had produced preliminary 
estimates of average willingness-to-pay per household per percentage 
point improvement in each of the attributes, based on unweighted models 
(see Section II.E of the Survey Support

[[Page 34931]]

Document for more details). For example, the average dollar value per 
household per percentage point of reduced fish mortality at cooling 
water intake structures ranges from $0.75 and $0.78 in the Southeast 
and Inland regions, respectively, to $1.12 and $1.13 in the Northeast 
and national versions, respectively, to $2.52 in the Pacific region.
    EPA is also conducting a non-response study for each version of the 
survey, to account for the possibility that respondents are 
fundamentally different from non-respondents. EPA would use the non-
response study results to develop weights that correct for any 
differences, reducing the weight placed on overrepresented respondent 
groups, while increasing the weight placed on any underrepresented 
respondent groups. See Section II.G of the Survey Support Document for 
details on the non-response study for the Northeast region of the 
survey (the only region for which the non-response study has been 
completed to date). EPA emphasizes that the relationship between 
unweighted and weighted models for the Northeast may not be the same 
for the other regional and national versions. EPA currently is still 
fielding the non-response studies for the other three regional and 
national versions of the survey. EPA intends to complete weighted 
models for the remaining regions and the national surveys. After 
completing the non-response studies for all regions, reviewing public 
comment, and conducting additional scope and validity testing, EPA will 
present a more complete set of stated preference survey materials for 
an external peer review.
    EPA invites comment on the study's preliminary results, including 
the extent to which those results are consistent with previous studies 
of stated or revealed public preferences; ways of assessing the 
external validity of the underlying per household estimates and implied 
aggregate WTP, for example by comparison with estimates in the 
published literature of WTP for increased species abundance or other 
ecosystem attributes; whether further analyses are needed, and if so 
what analyses might be most useful; and the certainty levels of 
attributes in this survey. After reviewing and responding to public 
comment, the results from the planned external peer review, and 
additional validity testing informed by public comment, EPA will 
determine whether the results of the stated preference survey should be 
included in the benefits analysis for the final rule, and if so, what 
role they should play.
    This notice is intended to apprise the public of the new 
information, make this information available for public review and 
provide an opportunity to comment on the new information that the 
Agency has collected. However, EPA notes that the Agency is not 
reopening the proposed rule for comment through this notice.

III. General Solicitation of Comment

    EPA encourages public participation and requests comments on all 
aspects of the data and analyses presented in this notice of data 
availability and in the SSD that EPA is making available on its Web 
site.
    EPA invites all parties to coordinate their data collection 
activities with the Agency to facilitate mutually beneficial and cost-
effective data submissions. Please refer to the FOR FURTHER INFORMATION 
CONTACT section at the beginning of this preamble for technical 
contacts at EPA.
    To ensure that EPA can properly respond to comments, the Agency 
prefers that commenters cite, where possible, the paragraph(s) or 
sections in the document or supporting documents to which each comment 
refers. Please submit copies of your comments and enclosures (including 
references) as specified in the ADDRESSES section at the beginning of 
this notice.

    Dated: June 1, 2012.
Nancy K. Stoner,
Acting Assistant Administrator, Office of Water.
[FR Doc. 2012-14104 Filed 6-8-12; 8:45 am]
BILLING CODE P