SC10079
Memorandum
To:
Lynne
Tudor,
Debbi
Hart,
Deborah
Nagle,
and
Tom
Wall,
U.
S.
EPA
From:
Bob
Raucher
and
Tom
Ottem,
Stratus
Consulting
Inc.

Date:
July
9,
2002
Subject:
Responses
to
Riverkeeper
Follow­
Up
Questions
on
§
316(
b)
Phase
II
Case
Study
Benefits
Analyses
TUFTS
Follow­
up
Questions
in
document
"
followup
Question
to
TUFTS
#
1(
6­
27­
02).
doc",
dated
June
27,
2002
Q1.
As
you
can
see,
none
of
the
costs
or
benefits
(
in
the
table
below)
match
up,
even
when
the
options
are
properly
ordered.
Please
explain.

Table
from
question
Option
Benefits
Costs
FR
EBA
FR
EBA
FR
EBA
Proposed
3
$
703
$
735
$
178
$
283
1
4
$
1,164
$
1,223
$
2,260
$
3,507
2
6
$
1,328
$
1,159
Not
costed
Not
costed
3
1
and
2
$
849
$
1,034/
$
890
$
585
$
969/
$
610
4
3a
$
65
$
749
$
191
$
300
Answer:
The
benefits
differ
between
the
Preamble
and
the
Economic
and
Benefits
Analysis
(
EBA)
because
the
benefits
in
the
Preamble
were
not
sample­
weighted
in
the
same
manner
as
the
costs
were.
The
benefits
in
the
Preamble
are
for
539
in­
scope
facilities,
while
the
corrected
benefits
in
the
EBA
are
for
550
in­
scope
facilities.

The
costs
of
the
policy
options
presented
in
the
Preamble
are
total
private
(
post­
tax)
costs.
They
correspond
to
the
costs
presented
in
Part
B
of
the
EBA.
The
costs
presented
on
page
D1­
4
of
the
EBA
are
total
social
(
pre­
tax)
costs.
Table
D1­
2
on
page
D1­
3
presents
a
comparison
between
the
total
private
(
post­
tax)
costs
and
the
total
social
(
pre­
tax)
costs
of
the
different
policy
options
analyzed.
Stratus
Consulting
Memorandum
(
7/
9/
2002)

Page
2
SC10079
Q2.
In
addition,
since
Option
3
in
the
EBA
was
calculated
for
"
all
plants
follow
Track
I"
and
"
Some
Q3.
Finally,
since
the
Federal
Register
contains
the
proposed
regulation
and
alternative
approaches
to
be
commented
on,

Answer
3:

to:
°
the
EBA,
Chapter
C3
(
docket
#
DCN
4­
0002)
°
Federal
Register
Vol.
67,
No.
68,
Section
IX,
pages
17189­
17208,
°
docket
documents
DCN
4­
2070,
DCN
4­
2212,
and
DCN
4­
2213,
and
°
the
appendix
to
this
memorandum.

For
details
on
costs
please
refer
to:
°
the
EBA,
Chapters
B1
and
B2
(
docket
#
DCN
4­
0002),
°
Federal
Register
Vol.
67,
No.
68,
Section
VIII,
pages
17181­
17189,
and
°
Stratus
Consulting
Memorandum
(
7/
9/
2002)

Page
3
SC10079
Responses
to
questions
in
document
titled
"
Three
follow
up
questions.
wpd"

Q1.
National
benefits
appear
to
be
a
linear
function
of
case
study
benefits,
with
some
facilities
representing
only
themselves
and
some
used
as
the
basis
for
estimating
benefits
at
other
plants.
Thus
it
appears
that
EPA's
estimate
could
be
expressed
as
National
impingement
losses
=
A
*
Salem
+
B
*
Tampa
+
C
*
Ohio­
29
+
D
*
Whiting
+
E
*
Pilgrim
+
F
*
Brayton
Point
+
G
*
Contra
Costa
+
H
*
Pittsburg
+
I
*
Monroe
+
J
*
Seabrook
A
similar
equation
applies
to
entrainment
losses,
perhaps
with
different
coefficients.

Please
supply
the
values
of
coefficients
A
through
J,
suitable
for
reproducing
the
EBA
estimates
of
impingement
and
entrainment
losses
a)
at
the
539
facilities
that
answered
the
survey,
and
b)
at
all
550
in­
scope
facilities.

Answer:
As
suggested
in
the
question,
national
benefits
are
calculated
as
a
linear
function
of
the
case
study
benefits.
However,
the
coefficients
A
through
J,
as
defined
above,
are
not
explicitly
calculated.
Please
refer
to
the
detailed
explanation
in
the
appendix
to
this
memo
for
further
detail.

Q2.
Do
impingement
figures
include
estimates
of
impingement
survival?
If
so,
what
survival
rate
does
EPA
assume?
What
is
the
justification
for
this
assumption?

Q3.
What
is
the
source
of
the
estimated
costs
of
cooling
towers
used
in
the
EBA?
Were
alternative
cost
estimates
examined?
Please
supply
any
cost
estimates
used
or
considered
in
this
analysis.

Answer:
Stratus
Consulting
Memorandum
(
7/
9/
2002)

1.
Note
that
this
uses
Salem
results
based
on
an
extrapolation­
relevant
baseline
(
without
screens)
and,
therefore,
differs
from
Salem
results
in
the
case
study
(
with
screens).
Page
4
SC10079
APPENDIX:
ADDITIONAL
DETAIL
ON
EXTRAPOLATION
The
sections
below
present
a
detailed
explanation
of
how
the
case
study
results
are
extrapolated
to
national
benefits
estimates.
To
keep
this
brief,
we
show
the
step­
by­
step
calculations
for
estimating
benefits
from
reducing
impingement
at
in­
scope
facilities
located
on
non­
Gulf
estuaries.

All
monetary
values
in
the
memo
are
reported
in
thousands
of
2001
dollars.

Per
the
request
of
Jim
Laity
of
OMB,
this
memorandum
presents
a
detailed
explanation
of
how
the
case
study
results
are
extrapolated
to
national
benefits
estimates.
To
keep
this
brief,
we
show
the
step­
by­
step
calculations
for
estimating
benefits
from
reducing
impingement
at
in­
scope
facilities
located
on
non­
Gulf
estuaries.

All
monetary
values
in
the
memo
are
reported
in
thousands
of
2001
dollars.

1.
Extrapolation
Based
on
Flow
The
first
step
in
the
flow
(
or
MGD)
extrapolation
is
to
estimate
the
national
baseline
loss
for
all
in­
scope
Estuary­
NonGulf
facilities
based
on
the
Salem
case
study
results
and
average
daily
flows
at
all
in­
scope
facilities.
This
flow
extrapolation
relies
on
two
key
pieces
of
data
that
are
reported
in
Tables
C3­
1
and
C3­
2
in
the
Economics
and
Benefits
Analysis,
and
is
calculated
as
follows:

Salem
baseline
loss
estimate
middle
case
reported
in
Table
C3­
2;
this
is
the
average
(
midpoint)
of
the
benefits
transfer/
RUM
estimate1
$
703.80
Salem
normalized
flow
(
MGD)
%
of
all
in­
scope
Estuary­
NonGulf
flows;
calculated
from
CBI;
reported
in
Table
C3­
1
4.39480%
National
flow­
based
estimate
of
baseline
loss
from
impingement
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
=
Salem
loss/
Salem
normalized
flow
$
16,014.38
The
next
step
is
to
estimate
the
values
for
Table
C3­
3.
In
this
case,
all
the
case
study
values
are
simply
reported
in
the
table.
The
values
for
"
All
Other
In­
Scope"
facilities
are
calculated
using
the
percentage
of
national
flow
(
by
waterbody
type)
at
these
facilities.
These
are
the
values
reported
in
Table
C3­
3
of
the
Economic
and
Benefits
Analysis.
Stratus
Consulting
Memorandum
(
7/
9/
2002)

2.
Salem,
Brayton
Point,
Contra
Costa,
and
Pittsburg
account
for
7.1%
of
flows
at
non­
Gulf
estuary
in­
scope
facilities.
Page
5
SC10079
Facility
Baseline
impingement
loss
estimate
Salem
case
study
result
from
Table
C3­
2
$
704
Brayton
Point
case
study
result
from
Table
C3­
2
$
450
Contra
Costa
case
study
result
from
Table
C3­
2
$
5,726
Pittsburg
case
study
result
from
Table
C3­
2
$
22,268
All
other
in­
scope
=
national
extrapolation
estimate
*
%
of
flow
in
all
other
in­
scope
facilities2
=
$
16,014.38
*
0.92885
$
14,875
Total
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
$
44,022
2.
Extrapolation
Based
on
Angling
Days
The
first
step
in
the
extrapolation
is
to
estimate
the
national
baseline
loss
for
all
in­
scope
Estuary­
NonGulf
facilities
based
on
the
Salem
case
study
results
and
estimated
angling
activity
within
a
120­
mile
radius
of
the
facility.
This
angling
extrapolation
relies
on
two
key
pieces
of
data
that
are
reported
in
Tables
C3­
1
and
C3­
2,
and
is
calculated
as
follows:

Salem
baseline
loss
estimate
middle
case
reported
in
Table
C3­
2;
this
is
the
average
(
midpoint)
of
the
benefits
transfer/
RUM
estimate
$
703.80
Salem
percentage
of
in­
scope
angling
base
%
of
all
in­
scope
estuary­
NonGulf
angling
days;
calculated
from
1999
National
Survey
of
Hunting,
Fishing,
and
Wildlife­
Based
Recreation;
reported
in
Table
C3­
1
2.10301%
National
angling­
based
estimate
of
baseline
loss
from
impingement
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
=
Salem
loss/
Salem
normalized
flow
$
33,466.32
The
next
step
is
to
estimate
the
values
for
Table
C3­
3.
In
this
case,
all
the
case
study
values
are
simply
reported
in
the
table.
The
values
for
"
All
Other
In­
Scope"
facilities
are
calculated
using
the
percentage
of
national
angling
days
(
by
waterbody
type)
at
these
facilities.
These
are
the
values
reported
in
Table
C3­
4
of
the
Economic
and
Benefits
Analysis.
Stratus
Consulting
Memorandum
(
7/
9/
2002)

3.
Salem,
Brayton
Point,
Contra
Costa,
and
Pittsburg
account
for
5.1%
of
the
"
angling
days"
associated
with
inscope
facilities
in
non­
Gulf
estuaries.
All
other
facilities
therefore
account
for
94.9%.
Page
6
SC10079
Facility
Baseline
impingement
loss
estimate
Salem
case
study
result
from
Table
C3­
2
$
704
Brayton
Point
case
study
result
from
Table
C3­
2
$
450
Contra
Costa
case
study
result
from
Table
C3­
2
$
5,726
Pittsburg
case
study
result
from
Table
C3­
2
$
22,268
All
other
in­
scope
=
national
extrapolation
estimate
*
%
of
angling
days
at
all
other
in­
scope
facilities3
=
$
33,466.32*
0.94888
$
31,755
Total
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
$
60,903
3.
Best
Estimate
Baseline
Loss
The
calculation
of
the
best
estimates
varies
by
water
body
type.
For
the
Estuary­
NonGulf,
Estuary­
Gulf,
and
Freshwater
categories,
the
average
of
the
flow­
based
and
angling­
based
extrapolations
was
used.
For
the
Great
Lakes
and
Ocean
categories,
the
flow­
based
extrapolation
was
used
exclusively.
Stratus
Consulting
Memorandum
(
7/
9/
2002)

Page
7
SC10079
Facility
Baseline
impingement
loss
estimate
Salem
case
study
result
from
Table
C3­
2
$
704
Brayton
Point
case
study
result
from
Table
C3­
2
$
450
Contra
Costa
case
study
result
from
Table
C3­
2
$
5,726
Pittsburg
case
study
result
from
Table
C3­
2
$
22,268
All
other
in­
scope
average
of
middle
case
values
from
Tables
C3­
3
and
C3­
4
$
24,835
Total
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
$
57,802
4.
Benefits
There
are
two
steps
to
calculating
benefits
from
the
baseline
loss
estimates
developed
in
steps
1­
3.
First,
the
loss
estimates
are
weighted
using
sample
weights
developed
by
Abt
Associates
for
use
in
the
cost
analysis.
Second,
estimated
percent
reductions
in
I&
E
are
applied
to
the
estimated
baseline
loss
(
i.
e.,
benefits
equal
reductions
in
loss
that
are
assumed
to
be
directly
proportional
to
the
reduction
in
I&
E
estimated
for
each
regulatory
option).

4.1
Sample­
Weighted
Benefits
There
are
550
in­
scope
facilities
for
this
rule­
making.
Of
the
550,
a
total
of
539
completed
EPA's
facility
survey.
To
estimate
the
costs
at
all
550
facilities,
EPA
developed
sample
weights.
To
develop
benefits
estimates
that
are
consistent
with
the
cost
estimates,
we
applied
the
same
weights
to
our
benefits
estimates.
The
weights
for
all
facilities
are
reported
below.
Stratus
Consulting
Memorandum
(
7/
9/
2002)

Page
8
SC10079
Facility
Waterbody
type
Weight
Salem
Estuary
­
NonGulf
1
Brayton
Point
Estuary
­
NonGulf
1.111184516
Contra
Costa
Estuary
­
NonGulf
1.225968333
Pittsburg
Estuary
­
NonGulf
1.111184516
All
other
in­
scope
Estuary
­
NonGulf
1.065172214
4
Tampa
facilities
Estuary
­
Gulf
1
All
other
in­
scope
Estuary
­
Gulf
1.000506073
29
Ohio
facilities
Freshwater
1.008699453
Monroe
Freshwater
1.013157895
All
other
in­
scope
Freshwater
1.009608142
JR
Whiting
Great
Lake
1
All
other
in­
scope
Great
Lake
1
Pilgrim
Nuclear
Ocean
1.225968333
Seabrook
Nuclear
Ocean
1
All
other
in­
scope
Ocean
1.062051309
Applying
these
weights
to
the
best
estimate
baseline
loss
estimates
from
step
3
yields
sampleweighted
baseline
loss
estimates.
These
are
the
baseline
losses
used
in
calculating
benefits
from
the
proposed
rule.

Facility
Sample­
weighted
impingement
baseline
loss
estimate
Salem
=
$
704
*
1
$
704
Brayton
Point
=
$
450
*
1.111184516
$
500
Contra
Costa
=
$
5,726
*
1.225968333
$
7,020
Pittsburg
=
$
22,268
*
1.111184516
$
24,744
All
other
in­
scope
=
$
24,835
*
1.065172214
$
24,835
Total
(
for
78
in­
scope
Estuary­
NonGulf
facilities)
$
57,802
Stratus
Consulting
Memorandum
(
7/
9/
2002)

Page
9
SC10079
4.2
Estimated
Percent
Reductions
in
I&
E
To
determine
the
benefits
of
the
rulemaking,
EPA
estimated
the
percent
reductions
in
I&
E
at
each
facility
under
the
various
policy
options.
In
a
separate
assessment,
EPA
estimated
the
percent
reduction
in
impingement
and
entrainment
for
each
in­
scope
facility,
for
each
regulatory
option.
Using
these
estimates,
we
calculated
a
weighted
average
percent
reduction
for
each
waterbody
type
using
average
daily
flow
as
the
weight.
These
weighted
average
reductions
are
presented
in
Tables
C4­
1
and
C4­
3.
The
estimated
reductions
for
the
Estuary­
NonGulf
category
are
reported
below.

To
estimate
benefits
attributable
to
the
rule,
we
multiplied
the
estimated
percent
reduction
and
the
sample­
weighted
baseline
loss
for
each
waterbody
category.
For
example,
the
benefits
calculations
for
impingement
reductions
in
non­
Gulf
estuaries
are
as
follows:

Option
Estimated
%
impingement
reduction
Estimated
benefits
(=$
57,802
*
%
impingement
reduction)
Option
1
64.415%
$
37,233
Option
2
47.493%
$
27,452
Option
3
33.204%
$
19,193
Option
3a
25.526%
$
14,754
Option
4
41.390%
$
23,924
Option
5
97.468%
$
56,338
Option
6
84.386%
$
48,777
