From:		"Higgins, Cortney" <  HYPERLINK
"mailto:Cortney_Higgins@omb.eop.gov"  Cortney_Higgins@omb.eop.gov >

To:		Bill Schrock/RTP/USEPA/US@EPA

Cc:	Robin Dunkins/RTP/USEPA/US@EPA, "Frey, Nathan J." <  HYPERLINK
"mailto:Nathan_J._Frey@omb.eop.gov"  Nathan_J._Frey@omb.eop.gov > 

Date:		07/17/2012 05:23 PM

Subject:	Interagency Comments on Pulp and Paper RTR 

Hi Bill,

Attached is a redline document with comments on the pulp and paper RTR
preamble submitted for review.  Additionally, we received the following
comment on the cost estimates – can you explain the discrepancy?

I’ll be out of the office starting this Friday (7/19) and will return
on Monday, 7/23.  If you have any questions or want to send back
responses to the redline document during that time period, please send
to Nathan (copied on this email) and copy me.

Regards,

Cortney

Question about the Repeat Testing Cost estimate:

Using the RTI cost impact memo, p.14, Table 9 as the basis for the
estimating testing costs, it was not possible to replicate the costs
estimates from the memo (on p.16 of the RTI cost impact memo as $5.4M
capital costs, $1.3M/yr annualized costs).

That table didn’t include the number of mills in each of the 4
categories listed, so I counted the number of mills in each category
using Appendix C, p.48-56, of that same memo:

106 kraft, soda, and semichemical mills (including
semichemical+secondary fiber mills) or 103 kraft, soda, and semichemical
mills (NOT including semichemical+secondary fiber mills)

44 kraft mills using biotreatment (including those using
stripping+biotreatment) or              40 kraft mills using
biotreatment (NOT including those using stripping+biotreatment)

5 sulfite mills

73 mills bleaching with chlorinated compounds (e.g., ClO2)

I then multiplied the number of mills in each category by the testing
cost per mill to get a maximum and minimum estimate for repeat testing
costs:

Maximum case 	 	 	 	 

Number of mills in category 	  	Capital cost per mill every 5 years
Subtotal of mill category capital costs every 5 years	Annualized capital
cost per mill, $/yr	Subtotal of mill category annualized capital costs,
$/yr

106	Kraft, soda, and semichemical mills (including
semichemical+secondary fiber mills) 	$ 42,000 	$4,452,000 	$ 10,243 
$1,085,758 

44	Kraft mills using biotreatment (including stripping+biotreatment) 
$28,000 	$1,232,000 	$6,829 	$300,476 

5	Sulfite mills 	$14,000 	$70,000 	$3,414 	$17,070 

73	Mills bleaching with chlorinated compounds (e.g., ClO2) 	$20,000 
$1,460,000 	$4,878 	$356,094 

  	  	Total 	 $7,214,000 	  	$1,759,398 

Minimum case 	 	 	 	 

Number of mills in category 	  	Capital cost per mill every 5 years
Subtotal of mill category capital costs every 5 years	Annualized capital
cost per mill, $/yr	Subtotal of mill category annualized capital costs,
$/yr

103	Kraft, soda, and semichemical mills 	$42,000 	$4,326,000 	$10,243 
$1,055,029 

40	Kraft mills using biotreatment 	$28,000 	$1,120,000 	$6,829 	$273,160


5	Sulfite mills 	$14,000 	$70,000 	$3,414 	$17,070 

73	Mills bleaching with chlorinated compounds (e.g., ClO2) 	$20,000 
$1,460,000 	$ 4,878 	$ 356,094 

  	  	Total 	$6,976,000 	  	$1,701,353 

This estimated range of $7.0-7.2M in total capital costs of retesting is
higher than the $5.4M stated in the memo.  This range is also higher
than the $5.9M in total capital costs for the entire rule (including
reporting and recordkeeping costs of $0.5M) that is stated in the final
rule p.26.

________________________________________________

Cortney Higgins

Policy Analyst

OMB/OIRA/NRE

202.395.7856

  HYPERLINK "mailto:chiggins@omb.eop.gov"  chiggins@omb.eop.gov 

