1
Formal
Notification
for
Proposed
Regulations
to
Establish
Requirements
for
Cooling
Water
Intake
Structures
at
Section
316(
b)
Phase
III
Facilities
NPRM
Projected
Date:
June
15,
2003
Background
Clean
Water
Act
Requirements
Section
316(
b)
of
the
CWA
provides
that
any
standard
established
pursuant
to
section
301
or
306
of
the
CWA
and
applicable
to
a
point
source
must
require
that
the
location,
design,
construction,
and
capacity
of
cooling
water
intake
structures
reflect
the
best
technology
available
(
BTA)
for
minimizing
adverse
environmental
impact.

Section
316(
b)
addresses
the
adverse
environmental
impact
caused
by
the
intake
of
cooling
water,
not
discharges
into
water.
Despite
this
special
focus,
the
requirements
of
section
316(
b)
are
closely
linked
to
several
of
the
core
elements
of
the
NPDES
permit
program
established
under
section
402
of
the
CWA
to
control
discharges
of
pollutants
into
navigable
waters.
For
example,
section
316(
b)
applies
to
facilities
that
withdraw
water
from
the
waters
of
the
United
States
for
cooling
through
a
cooling
water
intake
structure
and
are
point
sources
subject
to
an
NPDES
permit.
Conditions
implementing
section
316(
b)
are
included
in
NPDES
permits
and
would
continue
to
be
included
in
such
permits
under
this
proposed
rule.
NPDES
permits
also
routinely
include
monitoring
and
reporting
requirements,
standard
conditions,
and
special
conditions.

The
proposed
rule
will
be
issued
under
the
authority
of
sections
101,
301,
304,
306,
308,
316,
401,
402,
501,
and
510
of
the
Clean
Water
Act
(
CWA),
33
U.
S.
C.
1251,
1311,
1314,
1316,
1318,
1326,
1341,
1342,
1361,
and
1370.

Brief
History
of
316(
b)
Rulemaking
In
April
1976,
EPA
published
a
rule
under
section
316(
b)
that
addressed
cooling
water
intake
structures.
[
41
FR
17387
(
April
26,
1976),
proposed
at
38
FR
34410
(
December
13,
1973)].
In
1977,
fifty­
eight
electric
utility
companies
challenged
these
regulations,
arguing
that
EPA
had
failed
to
comply
with
the
requirements
of
the
Administrative
Procedure
Act
(
APA)
in
promulgating
the
rule.
The
United
States
Court
of
Appeals
for
the
Fourth
Circuit
agreed
and,
without
reaching
the
merits
of
the
regulations
themselves,
remanded
the
rule.
[
Appalachian
Power
Co.
v.
Train,
566
F.
2d
451
(
4th
Cir.
1977)].

Since
the
Fourth
Circuit
remanded
EPA's
section
316(
b)
regulations
in
1977,
NPDES
2
permit
authorities
have
made
decisions
implementing
section
316(
b)
on
a
case­
by­
case,
sitespecific
basis.
EPA
published
draft
guidance
addressing
section
316(
b)
implementation
in
1977.

Consent
Decree
and
Current
316(
b)
Rulemaking
The
Phase
III
rulemaking
will
partially
fulfill
EPA's
obligation
to
comply
with
an
Amended
Consent
Decree.
The
Amended
Consent
Decree
was
filed
on
November
22,
2000,
in
the
United
States
District
Court,
Southern
District
of
New
York,
in
Riverkeeper
Inc.,
et
al.
v.
Whitman,
No.
93
Civ
0314
(
AGS),
a
case
brought
against
EPA
by
a
coalition
of
individuals
and
environmental
groups.
The
original
Consent
Decree,
filed
on
October
10,
1995,
provided
that
EPA
was
to
propose
regulations
implementing
section
316(
b)
by
July
2,
1999,
and
take
final
action
with
respect
to
those
regulations
by
August
13,
2001.
Under
subsequent
interim
orders
and
the
Amended
Consent
Decree,
EPA
has
divided
the
rulemaking
into
three
phases
and
is
working
under
new
deadlines.
As
required
by
the
Amended
Consent
Decree,
on
November
9,
2001,
EPA
took
final
action
on
a
rule
governing
cooling
water
intake
structures
used
by
new
facilities
(
Phase
I)
[
66
FR
65255
(
December
18,
2001)].
As
required
by
the
Amended
Consent
Decree,
EPA
also
issued
a
proposal
for
Phase
II
facilities
on
February
28,
2002
[
67
FR
17122
(
April
9,
2002)];
EPA
is
required
to
take
final
action
on
the
Phase
II
rule
by
August
28,
2003.
As
proposed,
Phase
II
facilities
consist
of
existing
utility
and
non­
utility
electric
power
producers
having
a
cooling
water
intake
structure(
s)
with
a
design
intake
flow
of50
million
gallons
per
day
or
mroe,
at
least
25%
of
which
is
used
for
cooling
purposes.
The
decree
requires
further
that,
in
Phase
III,
EPA
propose
regulations
governing
cooling
water
intake
structures
used,
at
a
minimum,
by
existing
power
plants
not
covered
in
Phase
II,
and
by
existing
facilities
in
four
industrial
sectors
(
pulp,
paper
and
paperboard;
petroleum
and
coal
products;
chemical
and
allied
products;
and
primary
metals).
EPA
must
propose
Phase
III
regulations
by
June
15,
2003,
and
take
final
action
on
these
regulations
by
December
15,
2004.
Because
EPA
did
not
have
sufficient
information
to
address
new
offshore
and
coastal
oil
and
gas
drilling
facilities
in
the
Phase
I
regulations,
EPA
will
address
these
facilities
in
Phase
III.

Environmental
Objectives
The
proposed
national
requirements,
which
would
be
implemented
through
National
Pollutant
Discharge
Elimination
System
(
NPDES)
permits.
They
would
establish
location,
design,
construction,
and
capacity
requirements
that
reflect
the
best
technology
available
for
minimizing
adverse
environmental
impact
from
the
cooling
water
intake
structure
based
on
water
body
type,
and
the
amount
of
water
withdrawn
by
a
facility.

EPA
expects
that
the
proposed
regulation
would
minimize
adverse
environmental
impacts
by
substantially
reducing
the
harmful
effects
of
impingement
and
entrainment
on
fish
and
shellfish.
As
a
result,
the
Agency
anticipates
that
the
proposed
rule
would
help
protect
ecosystems
in
proximity
to
cooling
water
intake
structures.
The
proposed
rule
would
help
preserve
aquatic
3
organisms,
including
threatened
and
endangered
species,
and
the
ecosystems
they
inhabit
in
waters
used
by
cooling
water
intake
structures.

Regulatory
Alternatives
under
Consideration
EPA
staff
are
now
developing
regulatory
alternatives.
At
this
writing
(
September,
2002),
formal
consideration
and
selection
of
regulatory
options
by
EPA
management
has
not
yet
begun.
As
a
starting
point
for
developing
alternative
requirements,
EPA
staff
have
selected
the
preferred
alternative
in
the
Phase
II
proposed
rule,
also
known
as
"
option
three"
[
67
FR
17122
(
April
9,
2002)]
­
see
also
the
Economic
and
Benefits
Analysis
for
the
Proposed
316(
b)
Phase
II
Existing
Facilities
Rule
(
available
from
EPA's
web
site,
http://
www.
epa.
gov/
ost/
316b).

The
approach
to
regulatory
alternatives
described
here
is
based
on
the
requirements
found
in
the
Phase
II
proposed
rule
and
the
regulatory
threshold
in
the
Phase
I
final
rule.
The
scheme
described
here
is
a
starting
point
­­
other
options
will
be
considered,
and
the
approach
could
be
modified
substantially
or
rejected
in
favor
of
another
approach.
Also,
the
nature
of
the
requirements
for
the
permit
application,
demonstration
studies,
and
subsequent
monitoring
have
not
been
considered
thoroughly
at
this
point
in
time
(
September
2002),
although
the
Phase
II
proposal
can
be
considered
as
a
starting
point
for
developing
such
requirements.

Facilities
having
design
intake
flows
(
DIF)
no
more
than
2
MGD,
and
those
using
less
than
25%
of
their
design
intake
flow
for
cooling
purposes
(
regardless
of
DIF),
would
not
be
subject
to
the
specific
Phase
III
requirements.
Instead,
requirements
for
such
facilities
would
continue
to
be
developed
by
permitting
authorities
on
case­
by­
case
basis
using
best
professional
judgment.

The
flow
threshold
of
2
MGD
is
a
starting
point;
other
MGD
threshold
values
will
be
considered.
Other
thresholds
will
also
be
considered
for
the
percentage
of
intake
water
used
for
cooling
purposes
and
for
capacity
utilization
at
electric
generators
(
see
below).
EPA
is
also
seeking
information
about
intermittent
or
seasonal
withdrawal
of
water
by
manufacturing
facilities
(
analogous
to
capacity
utilization
at
electric
generating
plants).
EPA
will
also
consider
ways
to
reduce
the
burden
of
permit
application
requirements
for
facilities
with
DIF
less
than
50
MGD.

These
are
the
performance
standards
assumed
as
a
starting
point
for
discussion,
and
assumed
for
purposes
of
estimating
costs
in
the
next
section.

°
DIF
less
than
50
MGD:


Water
source
an
estuary,
tidal
river,
ocean,
or
one
of
the
Great
Lakes:
reduce
impingement
(
80%
to
95%)
and
entrainment
(
60%
to
90%)


Other
water
sources:
reduce
impingement
(
80%
to
95%)
4
°
DIF
50
MGD
or
more,
electric
generators
with
capacity
utilization
<
15%


All
water
sources:
reduce
impingement
(
80%
to
95%)

°
DIF
50
MGD
or
more:
electric
generators
with
capacity
utilization
at
least
15%
and
all
other
facilities.


Water
source
an
estuary,
tidal
river,
ocean,
or
one
of
the
Great
Lakes:
reduce
impingement
(
80%
to
95%)
and
entrainment
(
60%
to
90%)


Water
source
a
freshwater
lake
or
reservoir:
reduce
impingement
(
80%
to
95%),
and
if
increasing
DIF
must
not
disrupt
natural
thermal
stratification
or
turnover
pattern

Water
source
a
freshwater
stream
or
river
and
DIF
is
not
more
than
5%
of
mean
annual
stream
or
river
flow:
reduce
impingement
(
80%
to
95%)


Water
source
a
freshwater
stream
or
river
and
DIF
is
more
than
5%
of
mean
annual
stream
or
river
flow:
reduce
impingement
(
80%
to
95%)
and
entrainment
(
60%
to
90%)

A
facility
that
already
meets
the
performance
standards,
or
one
that
has
reduced
its
intake
capacity
commensurate
with
the
use
of
a
closed­
cycle,
recirculating
system
would
have
already
applied
best
technology
available
for
minimizing
adverse
environmental
impact.

A
facility
would,
with
the
permitting
authority's
approval,
be
able
to
employ
restoration
measures
in
lieu
of
or
in
combination
with
intake
structure
technologies
or
operational
measures,
if
it
demonstrated
to
the
permitting
authority
that
it
is
maintaining
the
fish
and
shellfish
within
the
waterbody,
including
community
structure
and
function,
to
a
level
comparable
to
those
which
would
result
from
employing
design
and
construction
technologies
or
operational
measures
to
meet
the
performance
standards
for
reducing
impingement
mortality
and
entrainment.

In
addition,
if
the
costs
for
meeting
these
performance
standards
at
a
facility
are
significantly
greater
than
the
costs
EPA
considered
in
establishing
them
or
the
site­
specific
benefits
of
compliance,
a
facility
may
request
and
obtain
alternative,
site­
specific
standards
that
are
no
less
stringent
than
justified
by
the
significantly
greater
cost.

We
are
considering
two
modifications(
sub­
options)
to
the
scheme
described
above.

Regulatory
Suboption
1:
The
threshold
(
2
MGD
design
intake
flow)
for
applicability
of
specific
performance
standards,
may
be
set
higher
based
on
economic
tests
or
small
5
business
impacts,
provided
this
does
not
produce
financial
inequity
between
Phase
II
and
Phase
III
facilities.

Regulatory
Suboption
2:
Facilities
with
DIF
<
50
MGD
and
located
on
sensitive
waterbodies
would
have
the
same
requirements
as
other
small
facilities
to
reduce
impingement
mortality
only.

The
majority
of
facilities
that
would
be
subject
to
Phase
III
performance
standards
are
located
on
freshwater
rivers
and
streams.
Thus
most
would
be
required,
under
the
preliminary
draft
performance
standards
described
here,
to
meet
the
performance
standard
to
reduce
impingement
mortality
(
but
not
the
standard
for
entrainment).
Many
of
these
facilities
would
be
found
to
satisfy
the
performance
standard
because
they
already
have
in
place
appropriate
cooling
water
intake
technologies.
The
typical
Phase
III
facility
with
cooling
water
intake
structures
at
the
shoreline
would
either
need
to
install
only
a
fish
handling
and/
or
return
system
if
they
already
have
traveling
screens.
If
they
have
fixed
screens
or
no
screens,
they
would
need
to
install
both
traveling
screens
and
a
fish
handling
and/
or
return
system.
The
facilities
that
are
located
on
freshwater
rivers
and
streams
that
currently
have
offshore
or
submerged
intake
structures
would
most
likely
choose
to
install
velocity
caps
if
they
selected
a
technology
approach.

Using
the
initial
proposed
regulatory
approach
described
above,
we
estimated
the
percentage
of
the
national
population
of
facilities
subject
to
Section
316(
b)
that
would
require
no
further
modifications
to
meet
the
performance
standard
(
69
%).
This
69
%
is
divided
into
18
%
that
would
fall
under
the
2
MGD
threshold,
about
11
%
that
withdraw
more
than
2
MGD
but
use
less
than
25
%
for
cooling
purposes,
and
about
40%
that
meet
the
performance
standard
because
of
their
existing
technologies.
Of
the
remaining
31
%,
we
estimated
that
about
18
%
would
install
impingement
controls,
4
%
would
install
entrainment
controls,
and
9%
would
install
controls
for
both
impingement
and
entrainment.
These
percentages
apply
to
the
entire
population
of
facilities,
but
differ
little
between
the
manufacturer
and
electricity
producer
populations.
(*
NOTE:
as
discussed
above,
there
are
alternative
compliance
options
but
for
purposes
of
costing
we
assumed
that
cooling
water
intake
technologies
would
be
installed.)
6
Types
of
Small
Entities
Likely
to
Be
Affected
The
exact
scope
of
a
proposed
Phase
III
rule
has
not
yet
been
determined
(
as
of
September,
2002),
because
the
rulemaking
is
now
underway.
It
potentially
may
apply
to
all
facilities
not
regulated
under
Phases
I
&
II
and
to
which
Section
316(
b)
applies.
This
includes
a
wide
range
of
existing
facilities.
Phase
III
will
cover
existing
facilities,
for
the
most
part.

EPA
anticipates
that
a
majority
of
these
facilities
will
fall
into
the
following
major
categories
of
economic
activity:
electricity
producers
with
design
intake
flows
less
than
50
million
gallons
per
day;
industrial
chemicals;
pulp
&
paper;
primary
metals
(
iron
and
steel,
aluminum);
petroleum
refining.

EPA
conducted
a
questionnaire
survey
of
these
major
industrial
sectors.
Of
the
survey
respondents
(
facilities)
that
might
be
affected
by
the
Phase
III
requirements,
there
were
140
electricity
producers
(
94
utilities
and
46
non­
utilities)
and
288
in
other
economic
sectors.

Of
the
288
responding
facilities
in
manufacturing
sectors,
33
are
owned
by
small
entities.
Of
the
94
utility
plants,
12
are
owned
by
small
entities
and
for
one
the
ownership
has
yet
to
be
determined.
Of
the
46
utility
plants,
1
is
owned
by
a
small
entity
and
for
10
the
ownership
has
yet
to
be
determined.
EPA
is
now
working
diligently
to
determine
the
SBA
size
status
for
all
facilities.

Using
standard
methods
of
survey
estimation,
EPA
is
able
to
estimate
the
national
population
of
facilities
in
these
industrial
sectors
that
may
potentially
be
affected
by
a
phase
III
rule.
The
estimated
national
population
of
facilities
(
restricted
to
those
having
design
intake
flows
over
2
MGD)
is153
electric
generating
facilities
(
95
utility
and
58
non­
utility)
and
780
manufacturing
facilities.
These
estimates
are
subject
to
minor
revision
as
research
continues
on
facility
status
and
as
missing
survey
information
is
obtained
from
facilities.

The
Oil
&
Gas
Extraction
category
was
not
represented
in
the
316(
b)
survey.
Information
provided
in
comments
on
the
Phase
I
regulatory
proposal
prompted
EPA
to
consider
this
category
in
its
analyses
for
existing
facilities
(
as
well
as
new
facilities,
see
above).
The
category
contains
a
large
number
of
facilities
and
it
presents
unique
engineering,
cost,
and
economic
issues
associated
with
drilling
rigs,
ships,
and
platforms.
EPA
is
acquiring
current
industry
surveys
and
commercial
databases
that
will
identify
offshore
and
coastal
oil
&
gas
extraction
facilities
in
the
Gulf
of
Alaska,
California,
and
the
Gulf
of
Mexico.
EPA
also
has
experience
with
and
data
for
this
category
obtained
during
the
rulemaking
for
Synthetic
Based
Drilling
Fluids
(
Final
Rule
published
in
January
2001;
see
http://
www.
epa.
gov/
ost/
guide/
sbf/).
At
the
present
time,
based
on
that
experience,
EPA
believes
that
a
great
majority
of
the
owner­
entities
are
large
businesses.
7
Potential
impacts
of
the
rule
on
small
entities
For
details
of
how
"
small
entities"
were
identified,
the
sources
of
information
for
their
revenues,
and
the
preliminary
estimates
of
cost:
revenue
ratios
for
these
small
entities,
please
refer
to
the
Background
Paper
(
sent
to
potential
SERs)
which
accompanies
this
Notification.
More
detail
is
provided
with
this
Notification
in
an
appendix,
"
Preliminary
Small­
Entity
Impact
Analysis."

The
conclusion
that
may
be
drawn
from
the
preliminary
analysis
described
in
the
Appendix
is
that,
in
the
major
industries
surveyed,
including
the
preliminary
information
on
the
oil
&
gas
extraction
industry,
(
a)
the
number
of
small
entities
subject
to
a
Phase
3
rule
is
likely
to
be
near100
if
a
DIF
flow
threshold
of
2
MGD
is
used,
and
(
b)
the
number
of
firms
having
costs
more
than
1%
and
3%
of
revenues
is
likely
to
be
very
small.

Bear
in
mind
that
these
results
are
preliminary
and
will
be
revised.
The
costing
methods
are
also
being
revised.
At
this
writing
(
September
2002),
EPA
lacks
information
about
the
SBAsize
status
and
revenue
for
some
facilities
responding
to
the
EPA
survey,
because
some
facilities
did
not
provide
complete
responses
and
have
not
responded
to
further
inquiries
(
these
consist
of
34
out
of
428
facilities
having
DIF
above
2
MGD).
EPA
is
working
diligently
to
resolve
these
questions
and
obtain
the
missing
data.

This
preliminary
analysis
is
a
screening
analysis
of
the
sort
usually
conducted
by
EPA
to
make
an
initial
evaluation
of
small­
entity
impacts.
A
full­
scale
economic
impact
analysis
will
be
conducted
during
the
course
of
the
rulemaking
process.
The
methods
that
EPA
will
use
are
described
in
the
Economic
Analysis
of
the
Final
Regulations
Addressing
Cooling
Water
Intake
Structures
for
New
Facilities
(
EPA
­
821­
R­
01­
035,
November
2001),
and
in
the
Economic
and
Benefits
Analysis
for
the
Proposed
Section
316(
b)
Phase
II
Existing
Facilities
Rule
(
April
2002).
These
documents
are
available
from
EPA's
316(
b)
web
site
(
http://
www.
epa.
gov/
ost/
316b).
8
EPA
staff
recommendations
for
small
entity
representatives
for
the
316(
b)
Phase
III
rulemaking
as
of
September
14,
2002.

Note:
Not
all
of
the
persons
listed
below
have
committed
definitely
to
serve
as
SERs.
EPA
is
waiting
for
replies
from
two
more
municipal
electric
generators
and
two
more
manufacturing
plants.
9
EPA
staff
recommendations
for
small
entity
representatives
for
the
316(
b)
Phase
III
rulemaking,
as
of
September
14,
2002.

Small
Electric
Generators
Industry
Business,
Municipality,
or
Organization
Contact
Person
Small
Electric
Generators
Cooperative
Wolverine
Power
Suppy
Cooperative,
Inc.

3150
143rd
Ave.

Dorr,
MI
49323
Brian
L.
Warner
231­
775­
5700
bwarner@
wpsci.
com
Municipal
Henderson
Municipal
Power
&
Light
419
N.
Water
St.

Henderson,
KY
42419
Wayne
Thompson
270­
826­
2726
WThompson@
hmpl.
net
Municipal
Iola
Electric
Department
1220
West
54
Hwy.

Iola,
KS
66749
Steven
D.
Robb
316­
365­
4950
powerplt@
iolaks.
com
Municipal
Village
Of
Winnetka
510
Green
Bay
Road
Winnetka,
IL
60093
Jeffrey
M.
Pietka
847­
716­
3601
jpietka@
winnetka.
org
Cooperative
Great
River
Energy
*

4001
Hwy
200A
Stanton,
ND
58571­
9402
Steve
Smokey
701­
745­
3387
ssmokey@
GREnergy.
com
*
Note:
Great
River
Energy
is
a
large
entity.
This
plant
and
the
Elk
River,
MN
plant
belonged
to
United
Power
Association
until
a
January
1999
merger
with
Cooperative
Power.
EPA
was
told
that
although
the
merged
cooperatives
are
operating
as
one
at
the
board
level,
UPA
(
a
small
entity)
is
still
the
owner
of
the
Elk
River
MN
and
Stanton
ND
plants.
EPA
is
researching
this
matter
to
resolve
the
question
of
SBA
status.
10
(
continued
on
next
page)
11
EPA
staff
recommendations
for
small
entity
representatives
for
the
316(
b)
Phase
III
rulemaking,
as
of
September
14,
2002.

Small
Manufacturers
Industry
Business,
Municipality,
or
Organization
Contact
Person
Small
Manufacturers
Paper
and
Allied
Products
Oconto
Falls
Tissue,
Inc.

2079­
A
Lawrence
Drive
De
Pere,
WI
54115
Jim
Kellam
920­
983­
8379
JimK@
GBonline.
com
Steel
Bayou
Steel
Corporation
P.
O.
Box
5000
La
Place,
LA
70069­
5000
Wendy
Stehling
985­
652­
0322
WendyS@
bayousteel.
com
Cogeneration
/
Lumber
&
Wood
Products
Snider
Industries,
Incorporated
P.
O.
BOX
668
Marshall,
TX
75671­
0668
Craig
Parr
903­
938­
3282
cparr@
shreve.
net
Paper
and
Allied
Products
Mohawk
Paper
Mills,
Inc.

PO
Box
497
Cohoes,
NY
12047
George
Milner
518­
233­
6205
MilnerG@
mohawkpaper.
com
Petroleum
and
Coal
Products
Countrymark
Cooperative,
Inc.

225
S
East
St
Indianapolis,
IN
Donald
Horning
812­
838­
8133
Horning@
countrymark.
com
Petroleum
and
Coal
Products
Murphy
Oil
Corporation
PO
Box
7000
El
Dorado,
AR
71731­
7000
Jim
Britt
870­
864­
6520
jim_
britt@
murphyoilcorp.
com
(
continued
on
next
page)
12
EPA
staff
recommendations
for
small
entity
representatives
for
the
316(
b)
Phase
III
rulemaking,
as
of
September
14,
2002.

Associations
Industry
Business,
Municipality,
or
Organization
Contact
Person
Associations
Rural
Electric
Cooperatives
National
Rural
Electric
Cooperative
Association
4301
Wilson
Boulevard
Arlington,
VA
22203­
1860
James
Stine
703­
907­
5739
james.
stine@
nreca.
org
Municipal
­
MMUA
represents
small
municipal
utilities
in
Moorhead
and
Virginia
MN
Minnesota
Municipal
Utilities
Association
12805
Highway
55,
Suite
212
Plymouth,
MN
55441­
3859
Steve
Downer
800­
422­
0119
sdowner@
mmua.
org
Municipal
­
AMP
Ohio
represents
small
municipal
utilities
in
Dover
and
St.

Marys
OH
American
Municipal
Power
­
Ohio
2600
Airport
Drive
Columbus,
OH
43219
Randy
Meyer
800­
875­
2676
rmeyer@
amp­
ohio.
org
13
Material
previously
shared
with
potential
SERS:

Potential
SERs
were
provided
the
accompanying
2­
page
summary
"
EPA­
CWI.
pdf"
and
two
documents
describing
the
SBREFA
and
SBAR
process
("
Facts­
SBREFA01.
pdf"
and
"
Facts­
SERs01.
PDF").

Attachments:

EPA­
CWI.
pdf
Facts­
SBREFA01.
pdf"
Facts­
SERs01.
PDF
Potential
SERs
were
provided
the
accompanying
outreach
materials
between
September
16
and
18,
2002
as
preparation
for
an
outreach
meeting
and
telephone
conference:

Attachments:

Cover
Letter.
pdf
Background
Paper.
pdf
Ph2_
Ch3_
Technologies.
pdf
Ph2_
Ch2_
CostMethods.
pdf
Ph2_
Ch3_
Attach3.
pdf
Ph2_
Ch4_
Conversion.
pdf
Ph2_
AppxA_
ComplianceCosts.
pdf
Ph2_
Ch2_
charts210218.
pdf
Ph2_
Ch2_
charts219230.
pdf
Ph1_
Ch5_
Technologies.
pdf
14
Appendix
Preliminary
Small­
Entity
Impact
Analysis
for
316(
b)
Phase
III
EPA's
methods
of
determining
whether
an
entity
meets
the
SBA
size
standard
for
"
small"
have
been
described
in
EPA
documents
available
on
the
316(
b)
web
site.
They
are
also
described
in
the
Background
Paper
(
sent
to
potential
SERs)
which
accompanies
this
Notification.
EPA
has
conducted
an
initial
small­
entity
impact
analysis.
Results
of
this
preliminary
analysis
are
shown
in
two
sets
of
tables.
The
first
set
(
Tables
H­
1,
H­
2,
H­
3
and
H­
4
summarizes
the
number
of
small
entities
in
the
US
and
the
number
of
these
that
are
potentially
subject
to
a
316(
b)
Phase
III
rule.
The
second
set
(
Table
H­
5,
divided
into
three
parts)
summarizes
costs,
revenues,
and
the
ratio
of
annualized
cost
to
revenues
for
small
businesses
potentially
subject
to
a
316(
b)
Phase
III
rule.

The
analysis
was
based
on
all
surveyed
facilities
that
are
"
in
scope."
The
definition
of
"
in
scope"
is
that
each
facility
meets
each
of
the
following
criteria:
(
1)
they
use
a
CWIS
to
withdraw
water
of
the
U.
S.;
(
2)
they
have
or
require
a
National
Pollutant
Discharge
Elimination
System
(
NPDES)
permit;
and
(
3)
they
use
at
least
25
percent
of
the
water
withdrawn
for
cooling
purposes.
It
was
assumed
that
all
steam
electric
generators
would
satisfy
the
third
criterion.

The
analysis
assumed
a
threshold
of
2
mgd
design
intake
flow
(
DIF)
before
a
facility
would
be
subject
to
a
Phase
III
rule.
Such
a
threshold
was
applied
in
the
Phase
I
rule
(
new
facilities).
If
a
similar
threshold
is
eventually
applied
in
a
Phase
III
proposed
rule,
this
analysis
will
have
more
accurately
estimated
the
numbers
of
potentially­
affected
facilities
and
firms.

This
preliminary
analysis
was
conducted
at
the
facility­
level
(
but
using
firm­
level
revenues).
However,
conducting
this
analysis
at
the
firm­
level
would
not
change
the
results.
None
of
the
manufacturing
entities
or
electric
generators
determined
to
be
small
own
more
than
one
facility
subject
to
the
proposed
rule.
Therefore,
costs
aggregated
to
the
firm­
level
would
be
identical
to
facility­
level
costs.
The
number
of
firms
with
cost­
to­
revenue
values
of
greater
than
1%
or
3%
would
also
be
the
same
as
the
number
of
facilities
with
those
ratios.
15
Table
H­
1.
Electric
Generating
Universe:
This
table
provides
the
denominators
for
the
percentages
in
Table
H­
5.
The
second
to
last
column
presents
the
adjusted
number
of
all
small
entities
by
parent
firm
type.
The
last
column
presents
the
number
of
small
in
scope
facilities
(
at
a
zero
MGD
flow
threshold)
by
parent
firm
type.
[
The
number
of
all
small
nonutilities
(
irrespective
of
in
scope
status)
could
not
be
determined.
To
make
the
"
All
Small­
Adjusted"
number
in
Table
H­
1
comparable
to
the
"
Small
In
Scope
Facilities"
(
the
numerator),
two
adjustments
were
made:
(
a)
for
privately­
owned
utilities,
the
number
of
all
small
entities
was
reduced
by
50%
to
reflect
small
utilities
owned
by
large
holding
companies
(
50%
of
in
scope
privately­
owned
utilities
for
which
additional
parent
firm
research
was
conducted
were
small
at
the
utility
level
but
large
at
the
holding
company
level);
(
b)
for
municipalities
and
municipal
markets,
the
number
of
all
small
entities
was
reduced
by
20%
to
reflect
public
entities
that
are
small
based
on
electricity
sales
but
are
large
based
on
their
population
size
(
20%
of
in
scope
utilities
owned
by
municipalities
or
municipal
markets
were
small
based
on
electricity
sales
but
large
based
on
population).]

Electric
Generating
Universe
Firm
Type
All­
2000
Form
EIA­
861
All
Small­
861
All
Small­
Adjusted
Estimated
Small
­
Inscope
(>
0MGD)
Cooperative
894
868
868
2
Federal
9
5
5
Municipal
1,850
1,836
1,469
13
Municipal
Market
25
18
14
Power
Marketer
134
87
87
Private
240
107
54
14
State
25
17
17
Subdivision
113
103
103
Total
3,290
3,041
2,617
29
16
Table
H­
2.
Manufacturing
Facilities
Universe:
This
table
provides
the
denominators
for
the
percentages
discussed
in
table
H­
5
for
manufacturers.
The
last
column
presents
the
weighted
number
of
manufacturing
facilities
owned
by
a
small
entity,
with
a
design
intake
flow
(
DIF)
exceeding
0
MGD
and
at
least
25%
of
the
DIF
used
for
cooling
water
by
facility
industry
type.

Table
H­
2.
Manufacturing
Facilities
Universe
Firm
Type
Total
Mfg
Establishments
Total
Establishments
Owned
by
Small
Mfg
Firms
Estimated
Small
Inscope
(
all
DIFs)

Chemicals
7,046
4,640
30
Paper
1,338
777
21
Petroleum
315
134
3
Steel/
Aluminum
1,881
1,141
13
Other
40,591
32,831
9
Total
51,171
39,523
76
17
Table
H­
3.
Estimated
Number
of
In­
Scope
Electric
Generating
Facilities
by
SBREFA
Size
Determination:
This
table
presents
the
estimated
number
of
electric
generating
facilities,
by
ownership
type
and
parent­
level
SBREFA
size
determination.
This
table
includes
all
in­
scope
facilities,
regardless
of
design
intake
flows.

Table
H­
3.
Estimated
Number
of
Inscope
Electric
Generating
Facilities
by
Firm
Type
and
SBREFA
Size
Determination
Firm
Type
Large
Small
Total
Cooperative
5
2
7
Municipal
6
13
19
Private
105
14
119
State
3
3
Subdivision
1
1
Total
120
29
149
Table
H­
4.
Estimated
Number
of
In­
Scope
Manufacturing
Facilities
by
SBREFA
Size
Determination:
This
table
presents
the
estimated
number
of
manufacturing
facilities,
by
their
facility
industry
type
and
firm­
level
SBREFA
size
determination.
This
table
includes
all
in­
scope
facilities,
regardless
of
design
intake
flows.

Table
H­
4.
Estimated
Number
of
Inscope
Manufacturing
Facilities
by
Faciliity
Industry
Type
and
SBREFA
Size
Determination
Facility
Type
Large
Small
Total
Chemicals
175
30
206
Paper
141
21
161
Petroleum
30
3
33
Steel/
Aluminum
86
13
99
Other
50
9
59
Total
483
76
558
18
The
following
bullets
explain
the
columns
in
Table
H­
5

Small
In
Scope
Facilities:
This
is
the
number
of
facilities
owned
by
a
small
entity
(
all
DIFs)
that
potentially
would
be
subject
to
the
regulation
with
no
DIF
threshold..


Small
In
Scope
Facilities
with
DIF
>
2
MGD:
This
is
the
number
of
facilities
owned
by
a
small
entity
(
all
DIFs)
that
potentially
would
be
subject
to
the
regulation
under
a
2
mgd
DIF
threshold.


Facilities
as
%
of
All
Small:
The
percentage
of
the
universe
of
small
facilities
that
are
in
scope
at
the
2
MGD
DIF
threshold.
This
is
the
number
of
facilities
owned
by
a
small
entity
that
are
in
scope
under
the
DIF
threshold
(
column
titles
"
Small
In
Scope
Facilities")
divided
by
the
estimated
number
(
see
Table
H­
1,
H­
2,
the
next
to
last
column)
of
all
facilities
owned
by
a
small
entity
(
irrespective
of
in
scope
status
­
the
vast
majority
of
these
small
firms
do
not
have
a
CWIS
and
CWA
§
316(
b)
does
not
apply
to
them).
This
number
shows
the
percentage
of
all
small
businesses
in
the
US
that
would
be
subject
to
the
proposed
§
316(
b)
Phase
III
proposed
rule
under
the
DIF
threshold.


Facilities
with
Flow
&
Revenue
Data:
This
is
the
number
of
facilities
for
which
both
flow
and
revenue
data
are
available.
The
next
series
of
variables
in
Table
H­
5,
Part
1
(
average
design
intake
flow,
average
firm
revenues,
and
the
average
annualized
cost
numbers)
are
based
on
these
facilities.


Average
Design
Intake
Flow,
Average
Firm
Revenues,
Average
Annualized
Costs:
These
average
values
are
calculated
using
data
for
those
facilities
that
exceed
the
specified
DIF
threshold.


Number
of
Facilities
with
Total
Annual
Cost/
Revenue
1%
­
3%,
>
3%:
The
next
six
columns
present
the
number
of
facilities
whose
estimated
annual
costs
are
between
1%
and
3%,
and
greater
than
3%
of
revenues
under
three
scenarios:
(
1)
using
total
annualized
technology
costs
only;
(
2)
using
total
annualized
technology
costs
plus
the
low
average
permitting
and
monitoring
cost
estimate;
and
(
3)
using
total
annualized
technology
costs
plus
the
high
permitting
and
monitoring
cost
estimate.
19
Table
H­
5,
part
1.
Preliminary
small­
entity
impact
analysis,
part
A:
surveyed
facilities
Firm
/
Facility
Type
Small
In­
Scope
Facilities
(
all
DIFs)
Small
In­
Scope
Facilities
(
DIF
>
2
mgd)
Facilities
as
%
of
All
Small
(
Universe)
Facilities
with
Flow
&
Revenue
Data
Electric
Generators
by
Firm
Type
Cooperative
2
2
0.2%
2
Municipal
13
12
0.8%
12
Municipal
Mrkt
0
0
0
Private
14
11
20.5%
11
Sub­
Division
0
0
0
All
Electric
Gen.
Facilities
29
25
1.0%
25
Manufacturers
by
Facility
Type
Chemicals
30
9
0.2%
9
Paper
21
15
2.0%
13
Petroleum
3
2
1.6%
2
Steel/
Aluminum
13
13
1.1%
13
Other
9
6
0.0%
4
All
Mfr
Facilities
76
44
0.1%
40
20
Table
H­
5,
part
2.
Preliminary
small­
entity
impact
analysis,
part
B:
costs
and
revenues
Firm/
Facility
Type
Average
Design
Intake
Flow
(
MGD)
Average
Firm
Revenues
($
2002)
Average
Annualized
Capital
Cost
Average
Annual
O&
M
Cost
Average
Total
Annualized
Technology
Cost
(
Capital
+
O&
M)
Average
Total
Annualized
Technology
+
Low
P&
M
Cost
Average
Total
Annualized
Technology
+
High
P&
M
Cost
Electric
Generators
by
Firm
Type
Cooperative
16.5
121,433,699
7,166
2,098
9,264
117,083
127,412
Municipal
23.5
19,878,307
9,748
2,983
12,730
139,407
150,096
Municipal
Mrkt
0.0
0
0
0
0
0
0
Private
2.6
23,713,816
4,130
1,617
5,748
176,526
192,888
Sub­
Division
0.0
0
0
0
0
0
0
All
Firm
Types
13.8
29,738,924
7,077
2,313
9,391
153,879
167,025
Manufacturers
by
Facility
Type
Chemicals
15.5
46,300,000
4,783
1,391
6,174
113,331
117,858
Paper
15
128,819,713
5,558
1,629
7,187
87,146
95,119
Petroleum
211
2,427,092,058
0
0
0
0
0
Steel/
Aluminum
20
242,791,988
3,672
1,264
4,935
58,494
63,626
Other
14
16,150,736
0
0
0
0
0
All
Facility
Types
27
254,723,884
3,900
1,199
5,099
69,604
74,659
21
Table
H­
5,
part
3.
Preliminary
small­
entity
impact
analysis,
part
C:
number
of
facilities
with
costs
exceeding
1%
and
3%
of
revenues
Firm/
Facility
Type
No.
Facilities
with
Ann.
Tech
Cost/
Rev.
1­
3%
No.
Facilities
with
Ann.
Tech
Cost/
Rev.
>
3%
No.
Facilities
with
Ann.
Tech
+
Low
P&
M
Cost/
Rev.
1­
3%
No.
Facilities
with
Ann.
Tech
+
Low
P&
M
Cost/
Rev.
>
3%
No.
Facilities
with
Ann.
Tech
+
High
P&
M
Cost/
Rev.
1­
3%
No.
Facilities
with
Ann.
Tech
+
High
P&
M
Cost/
Rev.
>
3%

Electric
Generators
by
Firm
Type
Cooperative
0
0
0
0
0
0
Municipal
0
0
5
1
5
1
Municipal
Mrkt
0
0
0
0
0
0
Private
0
0
0
0
0
0
Sub­
Division
0
0
0
0
0
0
All
Firm
Types
0
0
5
1
5
1
Manufacturers
by
Facility
Type
Chemicals
0
0
0
0
0
0
Paper
0
0
0
0
0
0
Petroleum
0
0
0
0
0
0
Steel/
Aluminum
0
0
0
0
0
0
Other
0
0
0
0
0
0
All
Mfr
Types
0
0
0
0
0
0
22
Oil
and
Gas
Extraction
Industry
As
described
above
in
Section
B,
the
oil
and
gas
extraction
industry
was
not
represented
in
the
316(
b)
survey.
Information
provided
in
comments
on
the
Phase
I
regulatory
proposal
prompted
EPA
to
consider
this
category
in
its
analyses
for
Phase
III
existing
facilities
(
as
well
as
new
facilities).

EPA
has
a
preliminary
basis
for
an
initial
economic
and
financial
analysis
of
the
coastal
and
offshore
oil
and
gas
extraction
industry.
The
technical
development
document
for
the
316(
b)
Phase
I
rulemaking
(
Publication
No.
EPA­
821­
R­
01­
036,
November
2001)
contains
a
12­
page
chapter
profiling
the
oil
&
gas
extraction
industry.
The
economic
analysis
document
for
the
final
rule
on
synthetic
based
drilling
fluids
(
Publication
No.
EPA­
821­
B­
00­
012,
December
2000)
profiles
US
oil
and
gas
extraction
operations
in
the
Gulf
of
Mexico
through
1999.

The
synthetic
based
drilling
fluids
economic
analysis
identified
100
firms
operating
in
the
Gulf
of
Mexico,
of
which
40%
either
met
the
SBA
definition
of
a
small
entity
or
for
which
the
revenues
or
employment
figures
were
unknown.
A
summary
appears
in
the
following
table,
extracted
from
that
document.

Based
on
this
table,
annual
revenues
for
small
firms
ranged
from
$
7
M
to
$
1000
M,
with
a
median
at
$
72
M.
Therefore,
a
cost:
revenue
ratio
of
0.01
would
occur
with
annualized
compliance
costs
of
$
70,000
to
$
10,000,000
($
720,000
using
the
median
revenue).
Similarly,
a
cost:
revenue
ratio
of
0.03
would
occur
with
annualized
compliance
costs
of
$
210,000
to
$
30,000,000
($
2,160,000
using
the
median
revenue).
In
the
spreadsheet
accompanying
this
memo,
annualized
compliance
costs
for
manufacturing
facilities
are
on
average
about
$
75,000,
with
a
cautious
high
estimate
of
$
118,000.
Those
costs
were
not
specifically
developed
for
coastal
and
offshore
oil
&
gas
extraction
facilities,
which
may
present
different
engineering
and
cost
issues.
EPA
is
working
with
industry
to
develop
technology
options
and
costs
for
such
facilities.
23
(
Table
3­
4
from
section
3
of
economic
analysis
for
final
rule,
synthetic
based
drilling
fluids)

Minimum,
Median,
and
Maximum
Financial
Data
for
Large
and
Small
Firms
($
1,000s)

Number
of
Employees
Assets
Equity
Revenues
Net
Income
Return
on
Assets
Return
on
Equity
Profit
Margin
Small
firms
Minimum
23
8,986
(
71,313)
7,053
(
35,027)
­
32%
­
15%
­
94%
Median
89
268,798
140,011
71,630
(
310)
­
1%
0%
­
4%
Maximum
272
949,401
375,018
1,004,781
109,852
17%
46%
43%
Large
firms
Minimum
47
69,276
(
3,815)
9,509
(
255,000)
­
18%
­
30%
­
108%
Median
*
1584.5
4,360,762
1,167,006
1,091,137
99,047
2%
9%
4%
Maximum
99000
144,521,000
63,466,000
185,527,00
0
7,910,000
270%
50%
71%

All
firms
Minimum
23
8,986
(
71,313)
7,053
(
255,000)
­
32%
­
30%
­
108%
Median
*
501
800,052
375,018
387,452
18,228
2%
6%
3%
Maximum
99,000
144,521,000
63,466,000
185,527,00
0
7,910,000
270%
50%
71%

Source:
Oil
&
Gas
Journal.
OGJ
2000;
Pennwell
Petroleum
Directory,
1998;
SEC's
Edgar
Database
at
http://
www.
sec.
gov;
Hoovers
Online
at
http://
www.
hoovers.
com;
and
Lycos
Companies
Online
at
http://
www.
companiesonline.
com
*
Used
hypothetical
number
(
501)
for
employees
for
larger
firms
when
number
of
employees
was
not
available.
